Customer Loyalty = Relevancy, Consistency and Control

By Jeanne Roué Taylor

Learn more in our upcoming webinar, Real-Time Marketing vs Right-Time Marketing, on 7/18.

It’s clear that in the past few years we’ve “discovered” loyalty programs all over again. Once the stuff of hotels, airlines, and some retailers, customer loyalty programs seem to have no boundaries today as everyone gets into the game.  But like many things that become ubiquitous, the original meaning and value of customer loyalty gets lost in the rush to look like everyone else.

Customer loyalty on scrabble board

To meet the real goals of customer loyalty, brands need a few things that are a bit more nuanced than punch cards and points. Customer loyalty programs are about delivering more contextual and relevant engagement to customers, more consistent messaging across multiple channels, and providing greater control or convenience to the customer.

Relevancy

Few things catch the customer’s attention more than relevance.

I take that back … nothing catches the customer’s attention more than relevance. There are two halves to being relevant: cutting through the noise in the marketplace to deliver what matters in a clear voice, and helping your customer discover information and choices they weren’t aware they wanted.

If your efforts are lost in the background noise, the relevance of your message doesn’t matter. Likewise, if your only goal is to ask the customer what they want, you’ve brought nothing but subservience. Successful relevance comes from helping the customer discover their own preferences and anticipating what they’ll need.

Consistency

A well-designed customer loyalty program has consistency and a good measure of predictability. That doesn’t mean that an occasional surprise and delight isn’t a great idea, but the day-to-day experience of the customer should create a trust in the brand’s ability to deliver and a sense that the brand has a well-thought-out strategy.

Web apps that constantly shift, choices that appear and then are gone, and other quick changes convey a lack of respect for the customer’s expectations. Dependable, well-crafted interfaces to your brand, whether Web, mobile or your people, are the delivery tools for consistency.

Customer Control

Customer loyalty happens when customers have great experiences with a brand that bonds with them on an emotional level. A big part of that positive experience comes from the feeling that the brand understands their needs, and respects their right to choose things like the type, channel, and timing of communication, and even the reward they receive.

Allowing customers to express preferences and participate in the structure of the customer loyalty program is the easiest way to offer meaningful control; while 99% may choose a discount or a freebie as their reward, the simple fact of offering choices is as important as the choices themselves.

These three concepts — relevancy, consistency, and customer control — form the basis for great customer loyalty programs because together they create the twin bonds of trust and emotional attachment.

Are Your Customers Trapped in Your Loyalty Programs?

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 loyalty programs 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 other ubiquitous loyalty programs.

While ubiquity is an issue, there’s something worse than being lost in the shuffle. There are loyalty 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

Loyalty program matrix for customer categories

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 loyalty 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.

Delete…The Easy Solution For Lousy Loyalty Programs

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.

 

 

 

I Know What You Did in Aisle 5

by Jeanne Roué-Taylor

Indoor mapping of consumer location is the latest arrow in the quiver of the retail marketer. When marketers know where things are happening, they can develop interesting patterns for where to put resources like people, signage and information technology. Geolocation also provides the remarkable ability to spot the patterns that predict what to expect from consumers, and can be tested and continuously refined based on effectiveness and cost.

Marketers can also send messages directly to the consumer based on where they are in that very moment. They can say, “Hey, you were in Aisle 5 and showed interest in that new phone—here’s an offer for 10% off.”

Service versus stalking

But where does it start to look like stalking and less like helpful service? The difference between creepy and convenience is found in whether consumers are knowingly and willingly sharing details about their path through the store, mall or city, and how long they spend in any one spot. When they’re not agreeing to this level of data collection and use, the outcome looks much more like Big Brother.

Pretty soon, they’re not agreeing to share their location and turning off that app that tracks their location. Who wants that?

Loyalty to the rescue

There is a simple way to make the same information useful both for prediction and messaging. Loyalty programs are the permission that consumers give because they see the benefit of having a closer, more open relationship with the seller. Anyone considering geolocation software as a way to get closer to the shopping cart has to first take into consideration the permission required to stay above the creepy line.

It is that easy. Loyalty programs are the de-creeping of big data and the answer not just to today’s monitoring and analytics tools, like geolocation technology, but also to what’s certainly coming in the not-so-distant future.

Learn more about the tools and technologies that are helping to reimagine loyalty marketing in this webinar.

 

Real-Time Marketing or Right-Time Marketing?

by Ted Rubin

Webinar 7/18 – sign up now! Right-Time Marketing vs Real-Time Marketing

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.

Finding the Holy Grail of Marketing

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

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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Better to Ask Permission Than to Beg Forgiveness

by Jeanne Roué-Taylor

We’ve all heard the phrase, “Better to beg forgiveness than ask permission” used as an excuse to move forward without the official nod from the higher ups. While there are situations where that works well, marketing is increasingly not one of those scenarios.

As the Internet matures and its users become more sophisticated, asking permission becomes the way to open lines of communication to consumers. Skipping the permission step is an easy way to be ignored or even blocked by the intended audience.

There are those who would argue this point and say that unsolicited offers are still working well, but if you peel back the onion, you’ll see two clear facts: 1) the more often email marketers use their tools, the less effective those tools become, and, 2) email is in decline as an effective marketing tool. Email marketing simply doesn’t scale.

Asking permission

Fortunately, there is a way to ask permission that scales remarkably well: Loyalty programs. A well-executed loyalty program creates a relationship between the seller and buyer that allows for implicit mutual benefit: I will reward you for engaging more closely with you and in return, I will offer you a higher level of service, exclusivity and, in some cases, better pricing on the things you buy.

I say ‘some cases’ because it doesn’t have to be about better prices. We engage with a brand because we feel a level of affinity that doesn’t necessarily come from economic benefits. Each consumer is different and while some are motivated by discounts, others are drawn in by increased sense of worth, common goals, and even game mechanics, where achieving levels or benefits is the outcome of a competitive framework.

Measure and modify your program

What truly makes loyalty work is the ability to create, test and modify loyalty programs. Loyalty programs that improve constantly will increase consumer commitment, increase spend, and create a loyal fan that stays around and has a much higher lifetime value to the brand.

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An Excellent View of the Peak of Loyalty

by Jeanne Roué-Taylor

What if the biggest fans of your brand are able to step outside the shopping experience simply because they follow their passions?

That’s exactly what The North Face offers to its customers when they give PeakPoints for every dollar spent—and for sharing via social media like Facebook and participating in local sporting events like the San Francisco Endurance Challenge. They call it VIPeak Rewards and it is brilliant.

The members of the program get VIP access to experiential rewards like exclusive events, free trips, and updates from athletes, as well as the more traditional cash-back credit. Members get to choose the reward that they value the most.

This is out-of-the-box thinking by a retailer that knows its fans are passionate about the outdoors and involved in outdoor communities. There’s a synergy between brand and behavior that draws the fan closer and rewards the same things that advance The North Face’s corporate image and goals. VIPeak Rewards is a two-way street that gives The North Face a 360-degree view of their best customers. The view can’t get better than that.

Platform approach

Driving this program is the Loyalty Lab Reward SaaS platform. Loyalty Lab Reward is designed to improve the customer experience, retention, and fan advocacy. It solves the technology challenge of coordinating loyalty efforts across digital, retail, mobile, and social channels. Today’s best loyalty programs have all of these dimensions, and trying to organize and execute across multiple platforms and channels is frustrating and costly. Smart retailers are zeroing in on the unified platform as the best solution.

We should expect to see more approaches like VIPeak as retailers recognize the need to break out of traditional, one-dimensional or fragmented loyalty programs that clutter things with points and offers, yet don’t build a symbiotic relationship. Customer Loyalty Marketing (CLM) solves this—it is synonymous with unified platform, omni-channel, and an excellent, 360-degree view of the customer.

TIBCO Loyalty Lab VP Matt Elders said:

We pride ourselves in delivering programs that are convenient, valuable and can provide exclusive offers to our clients and their customers. We worked closely with The North Face to ensure VIPeak is not only a program that drives sales but also a program designed to encourage engagement with the brand outside of the shopping experience. Now North Face customers can be rewarded for getting the gear they need and getting outdoors to use it!”

For retailers passionate about their customers, and for customers passionate about their brands, The North Face VIPeak program provides an excellent example of what smart technology can enable.

Read Loyalty Lab’s North Face VIPeak press release here.

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Sense and Respond: Event-Driven Marketing

By Jeanne Roué-Taylor

The concept of “sense and respond” has been around for years, but it’s a relatively new concept for marketers. Times are changing very rapidly, and the rise of mobile, social and far faster cache memory applications gives the field a whole new way to interact with customers. It is an ability to sense the environment and respond immediately.

This isn’t the kind of interaction that a call center handles, or the idea of ‘touch point management’. From a process perspective, sense & respond gets much closer to the customer than ever before.

From a technology perspective, it means being able to move the marketing function out of a database-centric world and into a real-time, location-aware, flow-based marketing opportunity.

This new world is both context aware and cross channel at the same time. It differs from traditional marketing, even its most recent developments, by focusing on interaction optimization more than just the nuts and bolts of interaction.

Operational real-time

Most companies, including startups, lack the ability to assemble and respond to context fast enough to change customer behavior.  Unfortunately, real-time too often means gaining important information in the moment but doesn’t go the extra distance to meeting the customer in the moment.

What’s more, many of the systems implemented in the last three to four years are already outdated in their approach. They are not operationally real-time.

Truly operational, real-time sense and respond takes interaction to in-location, in-store or even in-basket levels of timing. It means having innovative analysis of what to expect and sensing a combination of factors in the moments they occur.

More of the same

If we stop for a minute to consider how much has changed in the recent past, we can easily assume that the change will continue and the opportunity for greater context and interaction in real-time is only going to grow. Likewise, customer expectations will shift to a demand for rewards in real-time – wherever they are and for whatever they’re doing.

Anyone who isn’t taking advantage of sense and respond will see their competition pulling away in the very near future.  Time to get started.

Want to learn more? Sign up for our webinar on 2/12, Event-Driven Marketing: Success with Real-Time Omni-Channel Engagement.

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