Tag Archives: crm

Time to Earn a Return On Relationship™

June 17, 2013

by Jeanne Roué-Taylor

These days, customer loyalty is far more than points and rewards. In fact, true loyalty is about earning trust in a way that allows that customer relationship to be managed toward greater value like any other business asset. Author and Forbes Top Social Media Influencer Ted Rubin champions this idea in his book Return on Relationship:

“Return on Relationship™ (ROR), simply put, is the value that is accrued by a person or brand due to nurturing a relationship, whereas ROI is simple dollars and cents. ROR is the value (both perceived and real) that will accrue over time through loyalty, recommendations and sharing, and is used to define and educate companies, brands, and people about the importance of creating authentic connection, interaction, and engagement.”

We take Ted’s expertise in customer relationship management and the return on relationship very seriously. Loyalty programs need to have tangible business outcomes that require a deep understanding of the customer. Those outcomes include:

•    Efficiency – Loyal customers cost far less to recapture and form a conduit to access the loyalty of their network through brand advocacy. The value of a loyal customer is not just in higher sales but also in the ripple effect they have on others.

•    Forgiveness – No one is perfect 100% of the time, and a loyal customer is far more likely to forgive minor missteps and support a brand through thick and thin.

•    Greater Lifetime Value – Customers loyal to a brand are worth 10 times the value of a customer who shops for convenience or price.

•    Social Insurance – In Ted’s words, this is “a band of ‘dynamic advocates’, always ready, willing and able to come to your defense in time of crisis or simply when you’re in need of support.” He is always quick to point out that this outcome has incredible ROI.

•    Energized Workforce – Stirring your customers to brand loyalty has a powerful effect on your own people, as that loyalty becomes powerful positive feedback that energizes your staff and makes their jobs more meaningful.

Gaining that deep understanding means having a 360-degree view of the customer’s history with the brand, their personal preferences for how and when to engage, and the contextual circumstances of when they interact with the brand. As consumers become more mobile and social, and demand control of the moments of their engagement, the challenge is synthesizing widening event-streams in real-time (learn more in this whitepaper on event-driven marketing). Is your brand up to the test?

Along with Loyalty Lab’s Matt Elders, Ted is presenting on Tuesday, June 18th at the CRMC Conference in Chicago, where they will discuss customer loyalty management. Learn more in this webinar and whitepaper.

Learn more about Ted Rubin’s book, Return on Relationship, and more about him on his blog and at CollectiveBias.com. You can follow him on Twitter @tedrubin and @R_onR.

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Are Your Customers Trapped in Your Loyalty Program?

May 30, 2013

by Jeanne Roué-Taylor

Loyalty is a red-hot topic for many industries, but unlike cloud, social, or mobile, loyalty programs have been around for decades. Still, many are simply not delivering what they should. If not dynamic and individualized, they are very likely suffering from diminishing returns and getting lost in the noise of ubiquitous loyalty programs.

While ubiquity is an issue, there’s something worse than being lost in the shuffle. There are programs, typically in the industries that have been in the loyalty game the longest, that incent behavior without creating a positive experience for the customer. Think of airlines and hotels and you have great examples of plenty of repeat business from customers who aren’t truly fans of a brand.

The Walker Loyalty Matrix

Walker loyalty matrix

Walker is a well-known customer intelligence consulting firm that put together a Loyalty Matrix, which is comprised of four quadrants of loyalty. Walker’s matrix lays out the argument that poorly designed or deployed loyalty programs trap customers and may only seem to be working.

In reality, only the truly loyal customer who has a great attitude, combined with favorable behaviors (e.g. repeat business, advocacy), has high value and low risk for the brand.

Creating the truly loyal

The customers who bring the most value for a brand are in the upper right of the Loyalty Matrix. The truly loyal are already in the ideal category, but need to be continually surprised and delighted if they’re to stay in that place. The accessible customer just needs to be encouraged to think of a brand first and to develop habits that make them truly loyal. The trapped can be moved to truly loyal by finding ways to surprise and delight based on their individual tastes and preferences (this whitepaper on customer loyalty management explains how).

What about the high risk? Before deciding to invest in high risk customers—those who have the combination of a poor attitude toward the brand and are unlikely customers—a brand should focus on the other three quadrants and get the program working first before reaching out to the hardest ones to reach.

The Walker Matrix with this added insight looks like this:

Walker loyalty matrix + added insight

Your organization has the opportunity to capitalize on this plan, but it may involve starting over or building on to your existing loyalty program. The value, though, outweighs the cost of becoming less and less relevant as your competitors move forward.

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Delete…The Easy Solution For Lousy Loyalty Programs

May 16, 2013

by Jeanne Roué-Taylor

There are two things we can expect every morning when we wake up. The first is that the sun has returned from the other side of the world and the second is a queue of loyalty program emails waiting in our inboxes, screaming of discounts and one-day sales.

According to The Colloquy 2011 Loyalty Census, the average family belongs to 18 rewards programs, but is active in just 8.4. Loyalty is alive and well, but is it really doing its job well?

Impersonal

Considering the impersonal email queue that greets us every day, membership in a program isn’t necessarily the symbiotic relationship that merchants might expect. Customers have rising expectations (as described in this webinar), and the old practices of loyalty marketing are looking more and more like spam in today’s marketplace.

According to Aberdeen’s report, The 2012 Omni-Channel Retail Experience, 42% of respondents expect a similar experience regardless of channel.

We live in a world that’s using diverse platforms, is increasingly mobile and expects loyalty marketers to personalize their offers in an ongoing pattern of communication. Do most programs meet those expectations? Judging by the morning email queue, no.

Delete

The numbers also suggest that customers won’t spend much thought before deleting or otherwise ignoring communication that isn’t personalized, relevant, and comes through just one channel (and not the ones preferred). Considering how much copy, coding and graphic work goes into the average advertisement, not taking the steps to make the message “sticky” is expensive and ineffective.

Like so many things, you get out what you put in and loyalty needs to be as strategic and personal as any part of selling. The Loyalty Lab Reward platform is an investment that will keep your best efforts out of the wastebasket.

 

 

 

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Real-Time Marketing or Right-Time Marketing?

May 3, 2013

by Ted Rubin

Real-time marketing is all the rage, though as TIBCO Loyalty Lab’s David Rosen is quick to point out, brands really need to be focused on right time marketing. “The speed and reaction of marketing needs to be relevant when the consumer is discovering, shopping or sharing,” he said.

Brands need to act with relevance and timeliness without crossing over into creepiness, Rosen warned. “You need to have customers’ permission to collect data and contact them in the time of decision-making. When that relationship is within a loyalty program, it’s far less creepy,” he explained. I agree because when the relationship exists, and it is documented via membership, the consumer feels a connection that otherwise may not exist.

Loyalty and rewards may be the first thing to get right first, he suggests, noting that “…it creates the permission-based relationship between a brand and its consumers.” There’s a value exchange there, he explained; customers have consented and contributed to the brand-consumer relationship. This is a great point because in many ways it makes it easier for the marketer than initially spending time on relationship building without a guarantee the C-suite often requires to fund relationship building.

The collection and analysis of the data available in a loyalty relationship allows marketers an edge in real-time marketing, with greater insight into which messages or offers are most likely to influence a customer in that critical moment. But keep in mind… data and analytics can’t replace judgment. Along with data, be sure to let judgement, learning, inspiration be your guides, not simply numbers.

Simple, Compelling Offers for the Win

The future of offers and real-time marketing is simplicity, according to Rosen. “The best rewards program is simple enough that any employee can describe it. It’s compelling enough that people will naturally want to sign up,” he said, noting that Sports Authority is a perfect example. They offer 5% back on all purchases, an offer everyone can comprehend and appreciate. It’s simple to use and doesn’t require that the customer understand a complex spend and earn program. I find this so incredibly important… ease of use and participation is key!

“If you can achieve high rates for enrollment and out of the gate, you’ll get immediate attention from senior management. If management doesn’t care, you don’t get buy-in and won’t have their support and budget to effectively run your program,” Rosen warned. Simple, compelling offers appeal to customers and can win the support of internal decision-makers.

Marketers are realizing the potential of next generation marketing tactics and tools, such as game mechanics, to essentially stimulate activity, add an element of fun, and change people’s behaviors in different ways. Game elements also help to cement the relationship by keep people involved and engaged.

“In this realm, you’ll see offers like group rewards, where consumers enter as a group to win prizes,” Rosen explained. “Retailers can link a number of behaviors and get consumers to accomplish certain tasks, ie: wearing a certain product and having a picture taken and posted to Instagram.”

Communication = Relationship Management

Better communication with loyalty program members means much more than simply delivering the content they want in a format they prefer. Brands needs to use the information gleaned from the program and other data available to them—through the website, email marketing, social channels and in-store—in order to effectively manage their customer relationships. When your customers are engaging via loyalty initiatives you have the opportunity to interact and engage them on a more personal level.

Are your customers shopping online, making returns, opening or responding to emails, or taking other actions from which you can draw insight?

Customers have come to expect that brands will deliver messages and offers relevant to their needs. This is the power of real-time marketing—the ability to act almost instantly on customer insights. Easing communication means understanding the needs of each customer and communicating the right message to them, at the right time.

It’s so important to keep in mind that right-time marketing means making a connection that goes beyond simply time and place, but takes it a step further and builds the connection… and therefore the relationship. Consumers desperately want to feel heard, connected, and valued, so remember to take it beyond the simple offer to engage and build Return on Relationship.

Analytics

Information has exploded, between the type of information we keep stored in databases —such as past purchasing behavior or past flight behavior—and the types of insights gleaned from activities happening in real time. “Customer loyalty marketing is not really marketing to people in real time, but using events, happenings, behaviors that are happening in real-time in order to very quickly make decisions about what to do next,” Rosen explained.

Analytics are critical for taking these masses of real-time and stored (historical) data and identifying patterns, in order to determine what to do next.

“The other piece of analytics that is incredibly compelling is that it gives the creative marketer the ability to be more creative,” Rosen explained. “You don’t have to get it right. You just need to have a great idea that it testable. If you have a great idea, you can make a moderate investment and put it in front of a limited amount of consumers and test that; you can measure the impact it had on people.” Great analytics takes away the risk of failure, he noted. Again I will add that analytics can only get you so far, it is easy to interpret data to mean what you are looking to hear, so be sure to let judgement reign.

Powerful reporting helps communicate the value of the program across the organization, not just to senior management, but across other teams, logistics partners, creative partners, etc. Dashboards, reporting and success metrics have become incredibly powerful and are critical for customer loyalty management.

Rosen’s recommendations are designed to help marketers move beyond the traditional loyalty program/offers model, to a relationship-based, mutually rewarding customer loyalty marketing solution. So use the all-important data, but remember the value in the data is in deepening the relationship connection.

“The whole idea is, don’t overcomplicate things,” Rosen advised. “Create a simple program with a compelling hook—this will become your canvas for testing and refining these other amazing things. That doesn’t mean it’s so vanilla people won’t sign up. But once you have that permission-based relationship with your customers, you can really do anything if you’re a good marketer.”

How effective is your brand at real-time marketing, using current and historical insights to influence purchasing behavior at the right time, in the proper channel, and building true relationships at the same time? Feel free to share your thoughts in the comments.

Hear more from David on right-time marketing and reimagining loyalty in the webinar, Customer Loyalty Management: Marrying the Art & Science of Loyalty.

Read more by Ted on his blog, and follow him @tedrubin and @R_onR.

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Finding the Holy Grail of Marketing

April 29, 2013

by Jeanne Roué-Taylor

The remarkable amount of change in the consumer world is ushering in a new definition of loyalty. What have long been static programs of points and plastic cards are becoming dynamic, individualized and much, much more engaging.

The old way of simple ledgers and confusing redemption schemes was a fundamentally flawed proposition. Customers were able to accumulate points but struggled to keep track of and gain real value in return. Something had to change.

Enter Customer Loyalty Management

Customer Loyalty Management is the new, holistic approach to driving higher levels of loyalty to brands. It puts a focus on what have emerged as the four ‘pillars’ of loyalty:

  • Loyalty programs
  • Wider event streams
  • Marketer-driven relationship marketing
  • Test & learn

Each of these four is key to finding the ‘Holy Grail’ of marketing: creating ‘fans’—people who think of a brand first and represent a much higher lifetime value. But today’s technology combines social, mobile and analytics to create new ways to drive another layer atop the four pillars, including higher trust, greater insight and relevance, and recognition leading to virtuous cycles of increasing value.

These are lofty goals that would be impossible without the new approach in technology and strategy offered by Customer Loyalty Management.

Aligning the Tools and Techniques

As consumers’ buying patterns change, the tools and techniques of loyalty need to change alongside them. There are four specific areas where the tools and techniques align with the four pillars and matter the most for the new Customer Loyalty Management:

  • Social
  • Mobile
  • In-store
  • On-line

Each of these areas is impacted by those changing buying patterns, and there’s an opportunity for brands to avoid disruption and benefit from the shift. These points of personal and digital engagement are the new realities of letting consumers engage in ways that increase their experience and create true fans.

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The Widening Gap of Loyalty Programs

April 24, 2013

by Jeanne Roué-Taylor

Travel and other loyalty programs are going through challenging times. Programs that floated along for decades, blissfully counting up points based on spend, transactions, nights or miles are suddenly finding themselves in an increasingly mobile, connected world that allows for something more.

The problem isn’t that traditional loyalty programs haven’t answered the call. The real challenge arrives unexpectedly when smarter companies come up to speed quickly with modern platforms and programs that are more engaging and effective.

The North Face

Look no further than The North Face, where the VIPeak program rewrites the way customers are engaged around their passions and not just their purchases. The North Face knew that staying competitive in the changing landscape of business required taking a new look at the customer and what creates for them a more enjoyable and meaningful experience. This is ultimately the only way to create a greater lifetime customer value for the brand.

Who’s next?

Companies that understand this will change course, but it won’t be an easy thing to recognize. Existing loyalty programs are self-reinforcing and continue to deliver value to brands even as customers shift to more engaging experiences elsewhere. The temptation is to double down on existing programs with the theory that more effort will deliver more value—but it won’t.

As consumers experience programs like that of The North Face, the luster of simply earning points based on purchases goes away. New and innovative programs are opening the customers’ eyes and setting new expectations. Loyalty is the new field of competition and no longer a place where each brand matches the next step for step.

This means loyalty has become something much more dynamic than in the past. It has to evolve with the consumer and the competition. It stops being a hard-coded application, implemented and changed with teams of technology people, and becomes a platform that faces the business—flexible, nimble and cloud-based. It looks a lot like Loyalty Lab Reward.

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Personal Connection is Coming Full Circle

March 26, 2013

By Ted Rubin

Personalization is the new black. The marketing and selling story of today involves knowing and seeing your customer the moment they arrive on your physical or virtual doorstep, and being able to provide differentiated service based on their preferences, history and loyalty. Knowing who they are, listening to what they have to say, and speaking to them via those they trust, not a brand mouthpiece.

The burbs

This isn’t a new idea. Looking back before World War II, most business was done in a personalized way. Stores were small and knew their customers on sight. They knew customers’ preferences and in many cases, could predict exactly what offers and information would entice their customers to buy.  Their business grew via customer satisfaction and word of mouth—relationships.

This pattern changed with the arrival of the mass-market suburb after the war. Communities were no longer necessarily based around a Main Street shopping district and instead, we built shopping centers connected by carefully planned avenues and freeways. Home was no longer known as a particular town or village. Driving further was a way to find discounts and choice, and loyalty to a local retailer or brand was broken. Broken not just because of the availability of discounts, but because smaller local merchants could no longer afford to build relationships and compete with the discounted race to the bottom.

Media

The same pattern led to the rise of Madison Avenue, featured as the backdrop for the Mad Men television show with its clever tag line, the focus group, and the advertising buy on newsprint, radio and television. The entire industries built around these patterns are today crumbling in the face of changing technology and a changing consumer… and the democratization of content where the Age of Influence had empowered anyone to build an audience and affect change, advocate brands, build relationships and make a difference. If you believe the past repeats itself, you’re right, as we’re coming full circle in how we personalize engagement with consumers.

Retailers have stark choices to make and those leading the pack are already putting their focus on the technology to follow the new, personalized way of engaging and enlisting the content creation skills of influencers and users to share their stories with those who value what they have to say.

Rediscovering the customer

The new pattern of engagement bears striking resemblance to the grocery of 1900, but in some ways, it is better. The reach of a retailer is global, 24×7, and has a perfect memory for preferences and past transactions, and the ability to create relevant emotionally connected content at scale. The new retailer can manage a virtually unlimited number of conversations in exactly the same moment and offer something completely customized, individualized and relevant, in a voice appreciated and valued by their consumers.

This is the corner grocer’s personal touch with far greater differentiation, choice, flexibility, channels, convenience, content, and ultimately, value. We’ve come full circle, but to an even better place.

For more from Ted Rubin, visit his blog and follow him on Twitter @tedrubin and @R_onR.

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Loyalty Beyond the Punch Card

February 26, 2013

By David Rosen

This is the beginning of our blog series on loyalty for SMBs. We spend a tremendous amount of time with owners of small to medium sized businesses – restaurants, pharmacies, retailers – discussing how to build loyalty. One of their most basic challenges, hard as it may be to believe, is still just moving beyond the punch card.

Think about the number of businesses that keep track of customer relationships on a piece paper. If you’re like me, you have 2-4 punch cards in your wallet, but what was their original purpose?  Are SMBs just giving away that 8th cup of coffee, that 12th free frozen yogurt, that discount their 10th purchased beauty product, or are they actually changing behavior, driving another purchase, and shifting share away from the competition?

Sure, the punch card system provides a marginal reminder in your customers’ pocket, is a nice thing to do for them, might even get the loyal ones to return, and is certainly easy to understand.  But now that SMBs are finally moving beyond these frayed relics, it’s important for us to recognize what they failed to deliver in order to avoid the same mistakes.

Punch cards offer no level of CRM. There is zero ability to dynamically change people’s behavior because they are so static. Further, their whole medium is incredibly stale, and they get lost in the purse or wallet.  And let’s not forget the big customer care issues of combining punches, or heaven forbid, lost cards.

We admit it – we like the ease of punch cards, but these days it’s also easy to go electronic, and vital to move in to the 21st century. SMBs need to shift the identifier to the card swipe of a registered card, or minimum a phone number or email address look up.

Also what’s invaluable are the baseline capabilities of CRM – to identify people who have lapsed, promote products or offers, and target individuals.  SMBs need to ability to accelerate the rewards and use them to change behaviors, e.g. for a mid-week pizza or afternoon coffee purchase.

We are not talking about full CRM of purchase analysis at the product of category level.  SMBs can maintain simplicity in their loyalty programs, eliminate the customer services issues and add basic CRM capabilities through a burgeoning number of coalition, location based and mobile marketing solutions.

For many businesses, moving beyond punch cards represents the gateway to a more sophisticated customer loyalty management (CLM) program. The options are affordable, easy to implement, and with trusted players in the space, don’t have to be daunting.

Stay tuned for:

  • Do coalitions make sense for SMBs?
  • Mobile loyalty’s leap forward and the opportunity for SMBs
  • What role do game mechanics have in SMB loyalty?

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Blurring of the Marketing/CRM Line

February 20, 2013

by Jeanne Roué-Taylor

There is a significant blurring of the line between marketing and customer relationship management.  This blurring has enormous impact on the way we operate our businesses and engage with our customers.

We need to stop thinking about functions and start thinking about fans.

Traditional silos

Traditionally, marketing has been about defining market segments and delivering offers while CRM was about knowing the fine-grained details of your accounts.

Even though we call it CRM, it has been, for most companies, about the sales funnel more than customer relationships; leads go in, revenue comes out.  Marketing sat above that funnel.

Expanding roles

Marketing is expanding and is less about segmenting the potential customers you don’t know and much more about finding prospects to know and interact with as marketers, before they enter “the funnel”. CRM, meanwhile, is being used to continually interact with customers in new ways of cross selling and upselling that used to look like marketing.  Where does marketing end and CRM begin? It’s very blurry.

Technology/strategy breakthroughs in recent years and changing consumer patterns allow each end of the marketing-to-CRM spectrum to continue to widen even as the difference between them blurs. This, in a nutshell, creates friction between applications, databases, departments, business owners, platforms, and ultimately prevents cohesive management of the spectrum.

Conflict

It manifests as battles over budget, politics over positioning, and conflict over control. It doesn’t have to be that way, and it isn’t for companies that recognize the benefit of seeing this spectrum as turning customers into fans.

Turning customers into fans must be the over-arching goal of any 21st century company that wants to stay relevant, build trust, open lines of communication and find success despite turbulence and a constantly evolving customer. Are you ready?

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Return on Relationship™: The New Measure of Success

February 15, 2013

By Ted Rubin 

Social media is quickly becoming a way of life… and a way of business as more and more companies are realizing they need to integrate social media into their marketing strategies. We can’t, however, expect to do “business as usual” and succeed in building an eager audience around our brands.

If you want to continue to reach your market in this social media age, the marketing focus needs to be on building relationships, and metrics need to expand beyond ROI (Return on Investment) to include ROR: Return on Relationship™.

–Return on Relationship™…simply put the value that is accrued by a person or brand due to nurturing a relationship. ROI is simple $s and cents. ROR is the value (both perceived and real) that will accrue over time through loyalty, recommendations and sharing.–

Most measurements and empowerment stats that are used with regard to relationships (i.e. number of Facebook fans, Twitter followers, retweets, site visits, video views, positive ratings and vibrant communities) are not financial assets, but that doesn’t mean they are worthless. Instead, these are leading indicators that a brand is doing something that is creating value that will be with you for the long term and will drive ROI if developed and used effectively.

So how do you build and strengthen relationships with your audience (as a whole, and as individuals) to increase your ROR?

1. Listen

If you want to be heard above the growing social media “noise,” you need to first listen to your consumers so when you do speak, you get it right. What are they saying, what are they feeling, what are their pain points, what solutions do they need?

2. Make it be about THEM

First think about and first address what matters most to your audience. Give them a platform to show you what they need, want, are interested in, and expect. Whatever matters most to them should become what matters most to you! We marketers like to think that social media is primarily a set of tools for our marketing purposes, but in reality, social media is also a strong set of tools our consumers use to share and influence opinion about our brand. Our consumers now have “the channel of me.” Consumers’ opinions now create the “reality” of the brand — if enough consumers say negative things about your brand, your brand loses its credibility, and (thankfully) vice versa.

3. Ask “How can I serve you?”

Taking the “ME” mentality one step further, when we are advertising instead of building relationships, we are focused on what our consumers can give us instead of how we can best serve them.

Your consumers will recognize in a heartbeat if you are simply trying to get something from them – and they will not stick around. It’s not that you aren’t allowed to want anything from your consumers, it’s that there must be a give to go along with every take. If you truly want to make an impact, aim to always put more energy and attention in your “give” column than in your “take” column. It will pay off.

4. Aim for Ongoing Engagement

Building relationships is about starting meaningful dialogue and taking the time to thoughtfully and genuinely engage in ongoing conversation. Relationships focus on getting to know your consumer and giving them reasons to stay engaged — not just getting them to react. This needs to be all the time… not simply campaign or initiative based. That is the biggest mistake being made today by marketers and brands… with consumers, and especially with influencers.

5. Know the People in Your Audience

Short and simple: if you are only focused on the money, you risk completely overlooking the people. Don’t make that mistake! If you don’t know who your people are, you might as well toss your marketing money down the drain.

Relationships ARE the new currency – honor them, invest in them, and start measuring your ROR!

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