Loyalty Lab Blog

By Jason Hornik | Senior Director, Product Marketing

In his updated bestseller, CRM at the Speed of Light, Paul Greenberg digs into Social CRM with nearly 700 pages of lively guidance and practical examples of how brands can innovate to better engage their consumers. This book provides a comprehensive view of the Social CRM landscape and is bound to trigger ideas for your strategies, tools, and techniques as the title so claims. A recommended cover-to-cover read:
http://www.ebooks.com/ebooks/book_display.asp?IID=471477

by Mickey Neuberger | VP Loyalty Strategy

CMO Council published latest report http://cms.sys-con.com/node/1258487

Study establishes that consumers see value in programs and marketers are achieving high ROIs. I thought the following excerpt on consumer complaints was particularly interesting:

“Too much spam and junk email topped the list of negatives associated with loyalty and rewards program membership (44 percent), followed by too many conditions and restrictions (38 percent), and rewards that lacked real value (37 percent). Other prevalent beefs included members having a hard time redeeming points or rewards, program membership lacking value, as well as communications and service not being personalized or targeted specifically for members.”

By Michael Greenberg | COO

Its been interesting to see the shift in tactics at Borders over the past month or two. They seem to have taken a page out of the Bed, Bath & Beyond playbook, and send out a single item coupon once or twice a week, consistently.

I’m guessing that, like BBB, Borders generates an average check that includes more than a single item, so the actual markdown on the transaction is not obscene. Its one way to generate traffic, but they are quickly training customers to look for and use a coupon whenever they buy from Borders.

Given the stream of not-so-good news from them over the past few months, I shouldn’t be surprised. They need to try something, anything, to keep revenue up. And now that the CEO/President has resigned to go run A&P, I doubt it will get better soon.

An old colleague of mine, Bill Dandy, was brought in recently to run marketing there, and I’ll give him the benefit of the doubt. I’ve been a fan of Borders for a long time and hope they pull through.

By Michael Greenberg | COO

We all know what’s coming. A blizzard of emails. Tweets of new specials every day, if not multiple times a day. A sale every weekend. Web only specials. Private savings events. Early access. The noise will be absolutely deafening.

Cutting through this will take some old-fashioned sales and marketing. I’m still convinced that sales today are won during the 10 minute search and research phase, whether the purchase happens instore or online.

Here’s a few ideas for winning that 10 minute battle with your best customers. These don’t make sense for all customers, but make great sense for proven high-value customers.

1. Individually connect with your best 10,000 customers. How much revenue do they generate? Doesn’t it make sense to assign someone to build a bridge with them? Get two or three of your better salespeople, put them in a room, and have them spend the next month emailing, tweeting, and connecting with your elite customers. You know what they buy, their preferences, where they live, and with a little research, who they know. Use that to suggest specific items and services that will be relevant and follow up. Give your company a voice and really connect.

2. “No questions” guarantee with your best 10,000 customers. There are generally three ways that people buy – impulse, researched, and prompted. Researched purchases have swamped the other two methods, primarily because even impulse and prompted purchases go through a quick research cycle nowadays. For customers that you know will not take advantage of you, consider a “no risk to them” approach. That is, worry-free returns, price match and best price guarantees, improved warranty or service levels, that is, anything that will remove the element of risk in their mind. That way if a competitor prompts or impulses a sale, you stand a good chance of these customers taking the sale to you instead. And reduce the risk of the customer taking a sale you generate (through marketing or merchandising) elsewhere. Its a great way to reward customer loyalty.

3. Orient yourself around gift recipient personas. If someone walks into a store you owned and says they need a gift, what’s the first question you’d ask? “What are they like”, most likely. And then progress through a couple of questions to pin down what kind of person they are before making recommendations. So take that same approach in your preparation for the holidays, and arm your associates, your marketers, your call center, and anyone else touching the customer with a highly targeted guide to gift giving. Think of it as transferring the brain of your best salesperson to as many people as possible.

These are just a couple of ideas to improve customer retention this holiday, but the underlying assumption should be clear. Your top 1% customers account for (probably) 10-15% of sales. So use some of your budget to cater to their needs and ensure you keep them throughout the holiday.

[Editor's note: This post by Phil Rubin originally appeared on the Relevant Dialogue blog on October 12, 2009. We wanted to share it with our readers.]

The world we live and work in is all abuzz about social media and the increased prominence of brand initiatives. Even this morning, none other than The Wall Street Journal pronounced “The End of the Email Era“.

While we’ll save commentary for WSJ’s opinion that email is over (we don’t think it is, at least for many customers), the underlying issue is that marketing is much more complex than simply email, just as it is also about much more than social media. Whichever of these media channels or strategies is more or less important is a function of a customer, a context, a time, a place and a brand relationship. As was said long ago: not all customers are the same. Some may want brand friendships on Facebook some (many) don’t or won’t. Ditto for ads. (That’s why mullets were invented: business in front, party in back. Kind of like brands in email, real friends on Facebook? Hmmm…)

Two other pieces today caught our eye and they both underscore the complexity and associated challenges facing marketers today. One is fairly obvious though detailed in depth by none other than Peter Francese, founder of American Demographics and now head of demographic trends at Ogilvy. The conclusion in the promotorial piece in AdAge is that there is no average customer anymore. Perhaps this story will be on the network television news tonight.

The second and much more interesting story, also by coincidence in AdAge, is about a new report from our favorite Forrester analyst, Lisa Bradner. In this report, coming out next week, one of the things Lisa addresses is the important reality that companies and brand managers aren’t organized to effectively handle new media nor moving rapidly to adapt to, much less embrace, other new digital opportunities. Like technology and social media and customers that don’t fit neatly into demographic “target” audiences with labels like “A25-54″. Further, marketers need to be more able to do math and be able to develop and presumably use customer intelligence so as to be more accountable for results and be able to adapt and change course based on actual performance.

Now this is relevant and something we support.

From our perspective, there is too much discussion about what is and what isn’t dead or alive, and not enough discussion about customers. For marketers, customers are the essence of social media’s value. Perhaps it should be called Customer Media – because that’s who controls it, at least as far as brands go.

By Michael Greenberg | COO

Ever since the WSJ article on the end of email, its been a cage match between email service providers and social media/emerging technology. Hyperbole aside, this is just part of the natural evolution of technology. Ideas that were cutting edge become mainstream and eventually become background noise.

What makes this time so different from years past is the sheer number of channels for interaction. Its tempting to try and take on all of them, but unless you have a large team or superhuman skills, you won’t be able to put enough time and energy into each channel to get a good return.

So the key here is to pick your battles, find the channels that make sense, and put in the resources to make them work. We love what Express is doing on Twitter – focus, cadence, good content, personality, and fits naturally with the rest of their marketing and brand voice. We also love what Pink does on Facebook – it also has focus, cadence, good content, personality, relevance, and stays exactly on brand.

Brands can learn a lot from these examples. Success in the new (mostly) social channels comes from resourcing and focus more than anything else. Just check out Chris Brogan, who has become the foremost social marketing guru through sheer force of will…51,000+ tweets, over 100K followers. And he seems to have conversations with every single one.

by Michael Greenberg | COO

Many companies equate customer loyalty with customer value. It isn’t difficult to see why, since value is easy to measure and loyalty is much more difficult. But often we see companies take this concept too far and focus all of their retention efforts on pure frequency or retention increases. A longer term approach is to balance investment in value creation and loyalty development.

Some people say loyalty can’t be bought. This isn’t quite true – its just an incomplete picture. Some portion of your customers allow their loyalty to be driven by financial considerations. Others respond to your brand promise and attributes with a more emotional attachment. Others are loyal since they don’t have alternatives. And others are loyal because they haven’t looked for alternatives.

While the objectives of customer loyalty development are the same as value creation (retention, frequency, and advocacy), the strategies and tactics are often different. Customer experience takes a larger role, frontline staff training becomes very important, social technologies become far more useful, and message tone has an impact. Consistency of message compounds as customers become more familiar with the brand promise and see it in action with every interaction.

We’ll be looking at all of these elements over the coming months and how developing customer loyalty impacts customer value.

by Mickey Neuberger | VP Loyalty Strategy

I just booked a free night via the Hotels.com Welcome Rewards Program. There were no restrictions, hidden fees, blackout dates etc.  I booked what I wanted because I earned it. Such a welcome relief from the airline rewards that you can never use and the retail $10-off on a $100+ purchase that are worse offers than what is readily available by browsing the internet. Hotels.com has earned my loyalty.

by Joshua Tretakoff | EVP, Services

Retailers are often loathe to make significant changes to their loyalty programs for fear of customer backlash. However, with recessionary times and the tough retail climate, more and more retailers are taking advantage of the opportunity to introduce changes. The Wall Street Journal’s SmartMoney has a good breakdown of some, and what the changes will mean. Worth a read.

by Michael Greenberg | COO

A recent article in The New York Times discussed the big dropoff in the restaurant business in Las Vegas. Vegas restaurants are almost entirely acquisition driven – that is, they compete to grab attention and bring a customer in the door without worrying too much about bringing them back in the future. When the pie shrank there was little repeat business to fall back on.

Their plight illustrates why investing in customer relationships over the long term is so important. When customers flat out reduce spending, revenue goes down without any change in market share. If you don’t change how you operate, your best case is to maintain market share, which means your revenue is guaranteed to decline. To maintain revenue, you must take it from someone else.

Ratcheting up acquisition spending is easy, but its likely all of your competitors are doing the same. With a retention marketing program in place, you have many more options that are difficult for your competitors to match.
Because you’ll know a) who your customers are and b) what they buy, you have an unfair advantage over your competitors, and can use many tactics to take market share from them.

Use that advantage as much as possible, and you’ll be able to defend your position and hopefully take share from competitors with less developed programs.