Loyalty Management 1st Quarter 2013

l o ya lt y e x p o 2 0 1 3
plan your journey
Also in this Issue:

SYLVAN LEARNING: LOYALTY & REFERRAL PROGAM Strategy for Success CARD-BASED LOYALTY: EMBRACING the Best of the Old & ThE BENEFITS OF ThE NEw
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Loyalty Loyalty
Not all loyalty programs are created equal. In fact, some programs arent equipped to motivate loyalty at all. Traditional loyalty programs are focussed on points collection, whereas true loyalty programs come from deepening employees and customers connections to a company or brand through a meaningful exchange of value at every interaction online, offline, everywhere! Effective Loyalty Marketing solutions include strategic consulting, program strategy and design, analytics, business intelligence and research, loyalty platform and operations, and a focus on member engagement and communications strategies, always and all ways. Thats the difference. Learn more by requesting a copy of our upcoming white paper, What every business leader needs to know about true loyalty at www.maritzloyaltymarketing.com
Spot the difference?
Maritz Loyalty Marketing is a consumer loyalty marketing agency specializing in delivering next-generation loyalty solutions for its clients across North America. Leveraging over 115 years of history, experience and expertise from the Maritz family of companies, Maritz Loyalty Marketing provides its clients with consumer loyalty solutions that consider the holistic consumer experience at every brand touch point and through all stages of their lifecycle with a brand. For more information, visit www.maritzloyaltymarketing.com or contact Rob Daniel, VP Research & Loyalty, robdaniel@maritz.com or (905) 696-5326.
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In this Issue...
FIRST QUARTER 2013 VOLUME 5 NUMBER 1 WWW.LOYALTY360.ORG
FEATURES
26
CARD-BASED LOYALTY: Embracing the Best of the Old & the Benefits of the New
Vanessa Horwel lThinkInk
LOYALTY FORUM: IN EVERY ISSUE

6 9 10 12
Letter from the Editor Loyalty 360 on the Web Your Voice Behind the Brand Yanni Kotziagkiaouridis, Merkle 360 Insights: The Importance of Short-Term Engagements for Long Term Loyalty Mark Johnson, Loyalty 360 By the Numbers: Mobile
30
Loyalty Referral Program Strategy for Success,
Interview with Sylvan Learning
22
B2B Voice of the Customer: Commitment, Interview
with Siemens Building Technologies
16
19
20 Q & A: Ask the Experts
34
Smarter Video
Kelly Ford SundaySky
24 Trending Now 36 Loyalty Innovation 48 By the Numbers: Experience 62 Loyalty Reads 64 Behind the Brand
Gregory Brown, Choice Hotels
Loyalty Management FIRST QUARTER 2013
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Consumer loyalty is a companys best friend.
At FIS, our Loyalty Services products make the competition want to roll over and play dead.
Rewards
Credit, Debit & Prepaid Merchant Funded Relationship Retail International Education
Enhancements
Aquisition Activation Usage Retention
Visit our Web site to request more information and enter to win an iMac
fisglobal.com/loyalty
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In this Issue...
FIRST QUARTER 2013 VOLUME 5 NUMBER 1 WWW.LOYALTY360.ORG
TEChNOLOGY, TRENDS & REwARDS

38 Challenges or Opportunities? Technology & Data Questions Answered Loyalty 360 Interview with Cindy Faust, Aimia
BEST BUSINESS PRACTICES

50 Financial Management of Loyalty Programs Martin Mnard & John Kryczka, PricewaterhouseCoopers 54 Capturing the Value of a Like Neil Everett, LoyaltyOne 58 Leveling Up Loyalty: Gamification Engages Consumers Rajat Paharia, Bunchball
40 Revolutionizing the Restaurant Experience with Mobile Doug Dwyre, Mocapay & Geoff Alexander, Lettuce Entertain You Enterprises, Wow Bao Division 42 Modernizing for Digital Integration: New Tools Jeff Simpson, Harte-Hanks
44 Loyalty Programs Must go Mobile is it That Easy? 46 The Mobile Loyalty User: Behaviors Paint a Portrait Mike McDonnell, Affinion Loyalty Group
Loyalty Management Editorial & Production Team Erin Raese - Editor in Chief Mark Johnson - Contributing Editor Caitlin Schar - Editorial Director Elizabeth Schulenberg - Design Director Liz Johnson - Graphic Designer Crescent Printing Company - Print Production Loyalty 360 Team Mark Johnson - President & CEO Erin Raese - COO Caitlin Schar - VP Marketing Jillian Hensley - Manager, Marketing & Web Development Elizabeth Schulenberg - Design Director Contacts Article Submissions & Advertising: Erin Raese erinraese@loyalty360.org or 513.800.0360, ext. 210 To subscribe to Loyalty Management, visit loyaltymanagement.com.
2013 Loyalty 360, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Loyalty 360 disclaims all warranties as to the accuracy, completeness or adequacy of such information. The opinions shared are those of the contributing authors and not necessarily reflective of Loyalty 360 and/ or its affiliates. Loyalty 360 shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.
2013
FIrst look at thIs years speakers & sessIons!
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FROM THE EDITOR
Reflect Before Leaping Forward

Welcome to 2013! Our 6th Annual Loyalty Expo is just around the corner March 20 22 at the Renaissance at Sea World in Orlando, Florida. If you havent already registered, you will after reading this issue; we invite you to get to know our speakers and sponsors. Positive, engaging customer experiences are the secret sauce to building long loyal customer relationships. In this issue and at the Loyalty Expo, well be exploring ways to enhance customer experiences. From knowledgeable, dedicated employees, to communicating the right messages to the right people at the right time well provide you insights and tips you can implement right away. Starting with Ask the Experts, our experts share ideas for building loyalty through surprise and delight experiences. Then, learn from Siemens Building Technologies; hear how they changed their company culture to focus on customer excellence and the success theyve seen from this move. On pg 30, Sylvan Learning shares how positive experiences resulted in a strong referral network. Noticing, this the team at Sylvan created a structured program to further reward and enhance their customers experiences. Todays technology enables us to enhance consumer experience on more levels through more channels. Well talk about the importance of an omni-channel approach and dive deeper into specific technologies. In this issue We debate taking loyalty programs mobile (pg 44), share ideas from Lettuce Entertain You restaurants (pg 40) and explore how to capture the value of a like(pg 54). We hope you enjoy this issue. See you in Orlando!
Erin Raese
Editor-in-Chief Loyalty Management erinraese@loyalty360.org
Pointize Siemens Building Welcome NeW Technologies LoyaltyOne loyalty 360 SundaySky members! Partner Advisors
6
Loyalty Management LOYALTY360.ORG
SparkBase dunnhumby Plink Paytronix

1/25/13 9:46 AM
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LOYALTY 360 ON THE WEB
Whats on
LoyaLty360.org
Visit now for exclusive content & interactive member features
CheCk out reCently publIshed researCh InCludIng whIte papers and exeCutIve brIeFIngs From loyalty 360 and our partners on loyalty360.org. Heres an overview of wHats new! Understanding Customer Engagement: The Opportunities & Challenges Marketers Face Today
Executive Briefing from Loyalty 360
Customer Engagement. Its a phrase echoed by brands in their quest to attract and retain customers. Yet, in talking with marketers across myriad industries, we realized that its a concept that is often very misunderstood. However, it is the key to building and maintaining strong, sustainable, and profitable customer relationships. While there is no single, concise definition, we do know that engagement gets to the heart of the relationship between consumers and brandsa relationship that has been forever changed by the explosion of new media and technologies.
Data Management: The DNA to Loyalty Program Success

Research from Altair Customer Intelligence & Loyalty 360
To better understand the impact of data management on loyalty program performance, Altair Customer Intelligence and Loyalty 360 conducted research into companies with and without loyalty programs and focused on the aspects of data management and key performance indicators. Additional information was gathered on prospecting, channel preference and predictive modeling. Through in-depth surveys with over 100 marketers in North America, Altair found that as companies evolved their data management process to include analytics, reporting and predictive modeling, the more aware they became of short-comings in each area.
Minimizing Effort to Maximize Loyalty

Research from KANA Software & Loyalty 360
Companies cannot rely on anecdotal evidence or what company executives think should be adequate customer self-service capabilities. Enterprises need to collect, measure and analyze structured and unstructured data from a wide variety of sources in order to provide world-class customer self-service that sets them apart from their competitors and contributes significantly to sales, revenue and profitability. This paper examines those elements critical to measuring customer effort, the potential use of this information, examples of some enterprises successfully deploying customer self-service and the brand impact of customer self- service.
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LOYALTY FORUM: YOUR VOICE
Overstuffed
how many loyalty cards do you carry? Consumers share their sentiments about all those loyalty cards.
Store CardS you uSe them, right? Im talking about the cards that save you money or earn you rewards drugstore cards, grocery store cards, etc. Ive got so many of them. In fact, Ive got a little secret. I cant find my grocery store card from Kroger. I KNOW!!!! Isnt that horrible? I mean, you cant take advantage of the great deals or earn the gasoline discount (HUGE) without it. Thankfully, my husband has one on his key-chain. But me, I need to get it replaced ASAP. Debra i have been wiShing for a Single loyalty Card for a very long time! My key chain is far too swamped with these little things and my purse just cant hold any more! I want ONE card. Definitely make it all more simple. Amber E. ive got CardS i Carry two walletS, one with to dillonS, my main cards, just to hyvee, hanCoCk fabriCk, Panera make it easier! bread, beSt buy, Danielle B. lego, toyS r uS, hallmark and would abSolutely love CvS. Those are the ones I found. the option of having only one reward card Im pretty sure Ive got more one to keep up with. :0) to Chicos and White Wendy P. House/Black Market but I cant find them.
Customer insights featured are from the LOC Enterprises, Show Us Your Cards Facebook contest. Find LOC Enterprises in the Exhibit Hall during the 6th Annual Loyalty Expo!
you know what im tired of? A loyalty card for every store I shop at, thats what. Some are on my key chain, some are in my wallet, some are codes stored on my phone. Its gotten so bad that I just say I dont have the loyalty card when I go to the store. Im missing out on savings because its become too big of a hassle. Jacqueline W.
10
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i think thiS iS a good idea. I know I dont like getting loyalty cards and I have 3! Many people have even more, so to get them all on 1 card would be so nice. Rebecca K.
i have all my loyalty CardS on a niCe little keyChain. Its a great organizational tool. Except I cant find the keychain with them on it. I have a feeling my 3 year old is responsible. Brett i love the reward ProgramS but have So many CardS; tried the app for the smart phone and it helps a little when you can get it to launch but the kiosks do not recognize it and it does not always scan right. Jennifer W.
Images courtesy of reward card carrying customers!
I want card. Definitely make it all more simple.
i have So many loyalty CardS in my wallet that I can never find the ones I need. I would love to only have to carry one card! Jeannette
i have a tendenCy to either PaSS on or leave home loyalty cards because I dont want to carry so many. Robin
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LOYALTY FORUM: BEHIND THE BRAND
Yanni
KotziagKiaouridis
viCe PreSident, analytiCS Strategy, merkle
Yanni leads the analytics strategy team for Merkles insurance, wealth management, nonprofit and global analytics practices. Over the past 15 years, Yanni has had the good fortune of working with clients like, AIG, GEICO, Nationwide, 21st Century, AARP, Citizens, PNC, and others. Yanni brings 15 years in CRM analytics strategy, with a focus on customer lifetime value and customer centricity. He leads a dedicated team of highly specialized analytics professionals in creating, articulating and integrating digital and offline marketing strategies that rely on harvesting the power of big data, analytics and technology. In the Q&A that follows we invite you to get to know the thought leadership Behind the Brand at Merkle:
My goal has always been to not only win the game, but to try and change the game itself.
s A recognized leAder with extensive experience in crM AnAlytics And An iMpressive list of high profile clients, whAt Are you Most proud of in your cAreer? Working with some of the biggest brands in the insurance and wealth management space is a great experience because you constantly get challenged to innovate. My goal has always been to not only win the game, but to try and change the game itself. But what really makes me proud is the team that I am surrounded by at Merkle. We have one of the most diverse, innovative, and forward-thinking leadership teams out there, combining deep CRM domain expertise and industry vertical knowledge, while also being extremely collaborative and partnership oriented.
whAt Are the inherent chAllenges in building A truly engAged And loyAl Audience for the insurAnce & weAlth MAnAgeMent industry? The biggest challenge for our industry is that, competitively speaking, there is limited distinction at the product level, which elevates price as the primary differentiator. Price sensitivity, combined with very little switch cost and a lack of emotional connection with the product, spark consumers to constantly be in shopping mode. As a result, we are faced with very few options in creating sustainable competitive differentiation. Loyalty programs and customer experiences unique to the brand can play a critical role in creating perceived value and product separation, helping to counter the race to the bottom pricing strategy.
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it is important to be able to create loyalty programs to reward behaviors that drive profitability beyond the initial product purchase.
whAt do you AppreciAte Most About dAtA & AnAlytics? whAt drAws you to this? What is really fascinating to me is the tremendous amount of creativity involved in creating value from data and analytics. To paraphrase Pablo Picasso, Computers are useless. They can only give you answers. The same is true for big data. The key in creating value is asking the right questions and constructing the right hypothesis to test. That aspect of the data and analytics business is what excites me. Data is like a rough diamond, analytics is the art and science of diamond cutting that creates the polished product but at the end of the day what really determines value is the ability of the craftsman to envision the final product from the original rough stone. whAt unique considerAtions Must A MArketer explore when developing A loyAlty strAtegy for the insurAnce & weAlth MAnAgeMent sector? There is definitely a flight to customer centricity in commoditized markets, and loyalty strategies can play a big part in the effort to create differentiation and a unique value proposition. There are three areas in my opinion that demand special consideration in designing loyalty strategies in the insurance and wealth management sector: Defining value Creating actionable segmentation schemas Measuring the incremental impact of loyalty Defining value:: Value is one of the most talked about subjects in the context of CRM but many times marketers have a hard time assessing value and using it to differentiate customer experience. In the insurance space, for example, loyalty and value are not always correlated because of the implications of risk and claims. For that reason, it is important to be able to create loyalty programs to reward behaviors that drive profitability beyond the initial product purchase. As an example, a loyalty program that rewards a customer for every additional accident-free yearly renewal and participation in a defensive driving course vs. simply rewarding customers that renew every year. Create actionable forward-looking segmentation schemas:: Loyalty should play a role in segmentation but should not be the sole driver. While a properly constructed loyalty program keeps an eye on rewarding behaviors that drive bottom-line profitability, too often loyalty means a focus on the past rather than the future. Actionable segments need to have a forwardlooking view of the customer relationship as well, and thus looking at lifetime value (past and future) should be another segmentation dimension to help provide a more holistic view of the customer relationship. Measure the incremental impact of loyalty:: Most insurance companies have a variety of products in their portfolios but relatively few design needs-based customer experiences, due to complex internal business relationships, lack of alignment on who owns the customer and the dominant product strategy. As a result, it is hard to get a complete picture of loyalty or even design marketing programs that holistically address insurance needs from a consumer point of view. This is where measurement comes in, to play a role in proving the impact of loyalty and engagement across products and channels. This hopefully reinforces the idea that more integrated, needs-based customer engagement strategies can drive profitability across the business vs. at a product level.
continued on next page continued on next page Loyalty Management FIRST QUARTER 2013
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Behind the BrandY a n n i K o t z i a g K i a o u r i d i
(continued)
QuicK fire Questions*

What is Your favorite Word? What is Your least favorite Word? What turns You on creativelY, spirituallY, or emotionallY? What turns You off? What is Your favorite (pg-13) curse Word? What sound or noise do You love? What sound or noise do You hate? What profession other than Your oWn Would You liKe to attempt? What profession Would You not liKe to do? if heaven exists, What Would You liKe to hear When You arrive? Kong (mY cocKer spaniels name), he is nuttY so i tend to use it a lot. no, because there is alWaYs a WaY. traveling ignorance and intolerance disaster! laughter anYthing that comes from a source Without an on/off sWitch hoW does senator KotziagKiaouridis sound? a comedian, because i have too high of expectations for mY joKes. to What loYaltY program Would You liKe me to deposit the miles from earth to heaven? - further confirmation that mY WorK on earth is done.
i believe there is still a great opportunity to innovate; we have not reached a plateau on new ideas.
*inspired by James lipton on inside the actors Studio we asked yanni to share his quick fire response to the questions originating from the french series, bouillon de Culture hosted by bernard Pivot.
throughout your cAreer you Must hAve been exposed to An interesting vAriety of consuMer insights. whAt hAve you uncovered thAt hAs surprised you Most? I think that most surprising is not uncovering new insights, but rather how people and organizations react to even the most basic insights that challenge conventional institutional knowledge. For that reason, I believe that organizations today not only face the hurdle of reacting to the explosion of data and finding a way to organize and make a sense out of them, but also the challenge of changing how decisions are made across the organization. The democratization of decision making because of the availability of data and analytics would be the next biggest organizational problem that we will need to solve. whAt would you like to see chAnge in the MArkets ApproAch to the custoMer experience, engAgeMent And loyAlty? One of the areas where I believe the industry continues to be challenged is the ability to correctly and fully measure customer value and design customer experiences and loyalty programs that are focused on value vs. some other more simplistic measure like retention or product ownership. Moreover, we still tend to operate at a segment level, even though we are capable of understanding value at the individual customer level. We should be able to create personalized loyalty schemas to incentivize those specific behaviors that maximize customer value at the individual level, especially as technology and data availability enable this today. whAt greAt MArketing ideA do you wish you hAd coMe up with first? I tend not to dwell about what I would have, should have or could have done. I believe there is still a great opportunity to innovate; we have not reached a plateau on new ideas. I am lucky enough to be part of an organization that continues to encourage forward-thinking ideas, constantly challenging team members to come up with new ways for our clients to create value.
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whAt is your personAl Motto? The only constant is change by Heraclitus, which proves that the Greeks were right all along. I really believe that making change part of your plan is the only way to move forward. who would plAy you in the filM of your life? I see myself more as a character in a comic book; if I have some type of superpower it will all be okay. whAt book(s) Are you currently recoMMending? I just finished Blindness by Jose Saramago. Saramago does an incredible job of capturing not only the cruelty of human beings but also our will to survive and persevere. Are you A rule breAker or A rule follower? why? The way I see it, my job is to question everything, including the rules. Ultimately we need a framework of guidelines that we can all agree upon, but part of innovating and coming
up with creative ideas is temporarily forgetting the fact that a framework exists to begin with. I believe that transparency and honesty are more important than simply following the rules. who (or whAt) inspires you? Traveling inspires me to keep an open mind; it is a source for having a fresh perspective and realizing that there is not one way of seeing things or solving problems. I am very keen on traveling in order to experience new cultures and meet new people in particular. For me, travel becomes less about the places you visit and more about the people you meet, the food you taste, and the wine you drink; I cant imagine anything more inspiring that that. defining life MoMent? Coming to the US 15 years ago to complete my graduate studies was definitely a defining moment in my life and one that allowed me to pursue my aspirations. Becoming a US citizen a few years ago is one of the most proud moments on that journey.
in your work with non-profits, hAs this inspired you to (or wAnt to) volunteer? whAt orgAnizAtions or cAuses Are you Most pAssionAte About? I am passionate about volunteering with organizations that have a community focus and operate at a local level; MANNA is one of my favorite organizations. Located in Philadelphia, MANNA is a vibrant nonprofit, nonsectarian, volunteer-intensive organization that serves men and women who are at acute nutritional risk and battling any life-threatening illness. words of Advice for the novice MArketer? Dont just answer the questions; question the questions first and foremost. L
For me, travel becomes less about the places you visit and more about the people you meet, the food you taste, and the wine you drink; i cant imagine anything more inspiring that that.
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LOYALTY FORUM: 360 INSIGHTS
the importance of
short-term engagments for
long term loYaltY

MarK Johnson
Loyalty 360
loyalty is a the prized possession for all brands. aware of the financial benefits and incremental ancillary attributes of having truly loyal customers, many organizations still fail to truly pursue a process to deliver the short-term experiences and engagement opportunities. these short-term experiences have a moment of truth valuation to them for each individual consumer and in total can lead to true brand loyalty and advocacy.
Loyalty is a journey with a brands current and potential customers. Its inception with the customer is based on an interest, a willingness to engage with a brand and try a product, service or offering. This initial engagement can be influenced by numerous factors whether it is a referral from a friend, a new store opening, reading about a product
online, a Groupon deal or the old Free Standing Insert (FSI). The shortterm experiences and engagements that follow are the value that leads to long-term customer centricity and loyalty. During this trial period, brands should work to engender trust and create a reciprocal dialogue that grows in credence with time.
Consumers quickly assign value to these short-term and first time experiences with a brand, and if brands are not tuned in they may permanently lose out.
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The first interaction comes with unique expectations and is assigned a value based on the consumers willingness to try a brands product or service paired with an openness to engage with the brand. These initial customer experiences are going to be vastly different amongst each individual. The utility that is attained has to be substantial enough, when measured against the expectation and the utility of partaking in a similar situation with another brand, to make the person want to re-engage time and again.
Further, brands should not assume that each interaction adds the same value to the long-term loyalty journey. Brands should examine the holistic experience and try to understand the expectations fully. The key is asking and listening. The simplicity of asking imbues more than a modicum of respect from the consumer. The restaurants I attend and stores I frequent have great utility to me, but I am not sure how many of them truly understand. They can look at all the data
brands should examine the holistic experience and try to understand the expectations fully. the key is asking and listening.
Lets look at a restaurant dining experience as an example. The situational (good lighting) and temporal (I have 8 kids with me) experiences are going to be huge considerations for valuing the overall experience and the brand. For a dining party with 8 kids the expectations of the experience and the utility received will be impacted by the timeliness of the meal and the prompt engagement with the kids. If the same parents should partake in the initial experience sans kids, the expectations are going to be dichotomously different. The idea of expectation matching is very important to building true long-term brand advocacy. Disparate customers have unique and very dynamic requirements and expectations of the brand and this can be challenging. CMOs and marketing executives traditionally have felt they understood their customers better than customers understood themselves. That has proven not to be the case. Often, what an individual may tell you they want will not correlate to their actual behavior. they have in their CRM systems and get a good picture of who I am. However, they may be better prepared to address my
As argued by Malcolm Gladwell in Blink, humans evaluate situations and assign value in a very rapid process, and although it may seem that we are totally rational in our manner of assigning value to a short-term situation it may not always be the case. The short-term nature of the decision can seem irrational and still prove to be quite influential in the ability to impact the pleasure centers of the brain. Consumers quickly assign value to these short-term and first time experiences with a brand, and if brands are not tuned in they may permanently lose out. If a person eats at the new local bistro and does not find enough value in that initial experience based on his or her expectation to warrant a second visit it is going to be hard to influence that customer going forward.
expectations if they asked about the unique requirements of my situation. Asking me what I value, what my needs are now and why I am loyal would be of great insight. It is a simple play on Fred Reichelds, The Ultimate Question. Loyalty is and should be thought of always as an ongoing process, a journey, and should never be considered a destination. The disparate needs of the customer base are going to be challenging at best. Understand that loyalty is a culmination of individual experiences and the value assigned to each will help brand build a piggy bank filled with truly loyal customers. L
Mark is the President & CEO of Loyalty 360. He has significant experience in selling, designing and administering prepaid, loyalty/CRM programs, as well as data-driven marketing communication programs.
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ANALYTICS
Uncover the pro t potential in every customer.
SAS Customer Intelligence solutions help you nd the most pro table growth opportunities and drive the best marketing actions to achieve optimal cross-business impact. Decide with con dence.
Scan the QR code* with your mobile device to see a video or visit sas.com/potential to learn more.
*Requires reader app to be installed on your mobile device
SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. indicates USA registration. Other brand and product names are trademarks of their respective companies. 2011 SAS Institute Inc. All rights reserved. S83316US.1111
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BY THE NUMBERS
MOBILE STATS
MOBILE BROWSING
TOTAL SHARE OF WEB TRAFFIC VIA MOBILE GLOBALLY
MOBILE SEARCH
61% Of
VISIT A MOBILE
CUSTOMERS WHO
INTERNET USAGE
MOBILE
OVERTAkE
IS PROjECTEd TO
EuROpE
5.13%
7.96%
u.S.
TO GO TO A
SITE ARE LIkELY
UNfRIENdLY
COMPETITORS
fOR 62% Of COMPANIES THAT dESIGNEd fOR MOBILE

dESIGNEd A SITE fOR
A WEBSITE SPECIfICALLY
INCREASE SALES RESULTEd
QUERIES HAVE
SITE
14.85%
AFRICA
INTERNET USAGE
dESkTOP
ANd 64% THAT
17.84%
ASIA
BY 2014
TABLETS
IN THE PAST TWO telecom searches YEARS. 20% of all

30% of all restaurant searches 25% of all movie searches
...are now done on a mobile device
GROWN 5X
29% Of MOBILE USERS ARE OPEN TO SCANNING A MOBILE TAG TO GET COUPONS
31% HAVE A LOYALTY MOBILE BUdGET over $10k;
32% communicate via mobile;
35% WILL OffER A MOBILE

57% OFFER REWARd CATALOG ANd REdEMpTION VIA mobile
LOYALTY CARd BY YE13;
1 in 3 SMARTpHONE uSERS shares their location uS CONSuMERS SpENd ALMOST 1 in every 10 ecommerce dollars using a mobile device
MENTIONING A LOCATION OR CITY NAME IN MOBILE AdS ANd SEARCH RESULTS CAN INCREASE CLICkTHROUGH RATES
UP TO 200%
reSourCeS: 2012 Mobile Future in Focus (comScore) http://www.comscore.com/Insights/Presentations_and_Whitepapers/2012/2012_Mobile_Future_in_Focus Mobile share of web traffic in Asia has tripled since 2010 (Pingdom) http://royal.pingdom.com/2012/05/08/mobile-web-traffic-asia-tripled/ More Companies Are Designing Their Site For Mobile http://econsultancy.com/us/blog/11044-more-companies-are-designing-their-sites-for-tablet-and-mobile-stats The Growth of Mobile Marketing and Tagging (Microsoft Tag) http://tag.microsoft.com/community/blog/t/the_growth_of_mobile_marketing_and_tagging.aspx
Mobile Marketing Statistics 2012 (SnapHop) https://snaphop.com/2012-mobile-marketing-statistics/ http://blog.hubspot.com/blog/tabid/6307/bid/33524/Smartphone-Traffic-to-Ecommerce-Sites-Up-103-Since-2011-INFOGRAPHIC.aspx#ixzz2Eyod44T6 Localized Creative Improves Click-Through Rates, Engagement (ThinkNear) http://www.mediapost.com/publications/article/171106/localized-creative-improves-click-through-rates-e.html#axzz2EylvRKGY (The Mobile Playbook (Google) http://www.themobileplaybook.com/en-us/#/cover)
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LOYALTY FORUM: Q&A
Q&A
Surprise & Delight Campaigns
Q:
A:
Ask the Experts:

Wed like to build on surprise & delight offerings to improve the customer experience and engender loyalty, without the commitment and liability of a points (or miles) based program. How do I best approach this type of program structure?
Our culture is so accustomed to points-driven loyalty programs, we may bypass other types of rewards and recognition. It is important to consider that customer loyalty can be developed and enhanced by other activities. Providing other types of rewards can actually differentiate a program and make it more memorable.
program had kicked off one month prior, and the certificate was mailed just before Thanksgiving. Years later, several of these customers were included in a customer satisfaction survey. When asked whether they had any particular instance in which they could recall being recognized for their loyalty, many of them cited the free candy. It was clear this small unexpected gift had significantly affected them. It was memorable. In addition to surprise and delight elements, your loyalty program can include other important elements that further distinguish your program. These have no monetary value to your customer, but can be successfully tied to your brand or product: Access: Provide program participants with special toll-free phone number or URL for customer service or ordering. Preference: Give your customers early access to sales. Provide special reports or updates. Social Events: Showcase special speakers, celebrities, resources. Recognition: Include your most profitable customers in feedback panels, or develop special clubs. Point-based customer loyalty programs are a part of our culture, and provide us with significant rewards. Surprise and delight offerings can add a special element of recognition and appreciationthey can be a memorable component of your customer loyalty program.
What makes non-point-driven programs stand out is that they can be more effective in reaching your customers on an emotional level. This is an important consideration. People relate personally to your brand, and an emotional connection nurtures continued loyalty. Including surprise and delight elements in your customer loyalty program does not require your customers to opt-in, to carry a special membership card or to consider point values as they finalize their purchase decision. It is simple to implement and can have significant long-term value.
What makes non-point-driven programs stand out is that they can be more effective in reaching your customers on an emotional level.
Even a small surprise and delight gift can be memorable. A component of one of our customer loyalty programs included a certificate for a one-pound box of Sees Candies, a very popular candy store in the western United States. The certificate had no expiration, and could be used at any Sees Candies location. The customer loyalty
B E t s Y V a V r i n Founder
& President, SMC Marketing
20 Loyalty Management LOYALTY360.ORG 20 Loyalty Management LOYALTY360.ORG

5796_Loyalty.indd 20 1/24/13 11:34 AM
A:
Make sure your team can execute at 100%, and that its very easy for the customer to realize the benefit.
I think youre on the right track by doing the simple things first, and avoiding the complexity and long term commitment of points programs. Regarding your campaign, here are some recommendations:
Does the offer match customer needs? Perhaps this would be a place to use your database to determine merchandise that is frequently sold together to better match the gift with the purchase item. Does the offer reinforce desired behavior? A gift unrelated to buying future merchandise is a nice feel good gesture, but a gift that actually facilitates future purchases is much better. Execution/Fulfillment. Make sure your team can execute at 100%, and that its very easy for the customer to realize the benefit. Economics. Design program investment based on positive ROI, and validate with [my next point]. Measure. Where possible measure the impact of the offer on subsequent sales and satisfaction/plans for future purchase. Did the program have the desired effect? I hope this helps. Best of luck with your campaign.
d a V E u r Y Principle, Customer
Insight & Lifecycle Marketing
A:
When designing tests, consider the degree to which you explicitly communicate with customers the reason why they are receivThe customer perspective will reveal ing the surprise benefits, along where the opportunities are to either with the timing and the delivery drive incremental revenues or retain channel(s). Dont simply focus on existing customer value. For exambest customers, as they are not ple, what are the key behaviors exalways the best source for increhibited by more valuable customers mental revenues (though someand how can you use surprise and times they are!). Last, in addidelights to reinforce those behaviors tion to careful measurement (i.e., when they are first revealed by less ROI), make sure you consider the valuable customers? Or, how can you treat customers who have lagged other customers with a sur- impact of extending these tactics to more customers so that the customer experience isnt improved at an excessive operational prise to see which ones respond favorably? The company perspective allows you to apply these surprise and de- cost to your own team. light treatments to specific parts of the business that similarly present the most opportunity.
Youre smart to focus on adding program features via unpublished elements like surprise and delights. Using unpublished program elements is something weve advocated for a long time and our clients have seen a great deal of success. Given todays climate, we further believe the future of loyalty will see more unpublished versus more published programs. In developing new program features, the approach is similar whether they are published or unpublished. It starts with setting specific objectives and looking at your loyalty opportunity from two perspectives: the customers and the business.
Another way to think about surprise and delights is as a platform for testing. The value of doing things unpublished is more than just the immediate business impact. It extends to the learning of what treatments trigger the right responses in the form of valuable customer behaviors. Testing new and different customer treatments without publishing them provides optimal flexibility, whether they remain unpublished or eventually become added published program features.
Testing new and different customer treatments without publishing them provides optimal flexibility.
For example, where are there soft spots or, alternatively, where are there high margin opportunities to drive immediate sales? The answer(s) should tie back to the objectives you set up front.
p h i l r u B i n CEO,
rDialogue
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FEATURES
Voice of the customer:
Commitment
Loyalty 360 Interview with Siemens Building Technologies Customer Excellence Team
Jennifer Schmitt, linette myland & Glenda cardenas
from siemens Building technologies Green cities index
Voice of the Customer (VOC) strategies are increasingly important for both B2C and B2B organizations as the market demands greater attention to customer experience, engagement and retention efforts. At Siemens Building Technologies, they have invested in making their customer relationships a top priority. Since 2007 the Customer Excellence department has been developing and implementing new programs within their Voice of the Customer initiative. The primary focus consists of continuous improvement that will then translate to high positive impact to the customer experience and ultimately increase the customers loyalty.
Q. How do you define Customer Excellence?

Jennifer: It is a fundamental driver to the success
of any Organization! At Siemens, Customer Excellence is a seamless, measurable practice, embedded across all levels of our organization and throughout our culture; where we gain insights directly from the customer and quickly act upon them to appropriately provide the right solutions and services in an efficient, timely manner. Customer Excellence also serves us as a guide to continuously build and strengthen our relationships with our customers and fuel the success of Building Technologies growth.
Q. What is the top industry challenge in managing customer feedback today?

Jennifer:
Understanding the true voice of the customer is an art. Managing the customers feedback and sifting through the noise to get to the root of what drives their loyalty. Specifically understanding the why behind what our customers say versus the what. Also, communicating what was done from a long term aspect and or strategy based on their feedback. It is easy to address customer issues but it is complicated to incorporate their voice into the companys long term strategy and vision as there are a lot of competing forces at work (Shareholders expectations, return on sales, competitiveness, technology etc.).
It is a culture that embodies the entire organization. Customer Excellence empowers our employees to build and strengthen relationships with our customers and consistently provide an excellent customer experience.
Linette: Customer Excellence is everything customer.
Linette: Customers communicate their needs differently in their words and actions. Understanding what our customers are really asking for is a huge challenge to ensure that we are delivering and meeting their expectations.
Jennifer:
hear more from siemens building technologies at the 6th annual loyalty exPo! we encourage you to join Jennifer Schmitt, linette myland and glenda Cardenas as they present the b2b foCuSed session: leveraging voC to build loyalty a Siemens building technologies Case Study
Q. What are you most looking forward to in 2013 as the Customer Excellence journey continues at Siemens Building Technologies?
Engaging our Promoter Customers and celebrating their loyalty as well as partnership. We are getting ready to launch our Customer Loyalty Program in the second quarter of our fiscal year and I couldnt be more excited! Our customers deserve this!
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Linette: We have many exciting programs being developed that will not only benefit and recognize our customers, but our employees as well. Our Customer Loyalty Program will recognize our promoter customers and honor the strong relationships we have with them. Our Excellence in Action Awards program will recognize our front line employees for consistently providing an excellent customer experience. We have always valued the strong relationships with our customers and have always known that our front line employees are the face of our company, but we havent had the programs in place to give them their due recognition. I am very excited we have the opportunity to build these into our Voice of the Customer initiative.
Siemens commitment to customer relationships

Glenda cardenas
Jennifer:
Q. Where do you believe there are opportunities for industry growth and improvement in better understanding VoC opportunities?
A major focus that I do not hear people talking about is in respect to survey fatigue. The majority of our customer insights come from our relationship survey or focus groups. What other means do we have to capture customer insights? Currently, business to customer as well as business to business collect a majority of their feedback from customers through a NPS survey. People are bombarded on a daily basis to provide their feedback and I am starting to see our response rates drop off. The key question is: What is the next step for gathering feedback? With the technology we have available today, providing our customers with different approaches to providing feedback is essential. Customers arent always comfortable with surveys or may feel that completing a survey would fall on deaf ears. Providing several avenues for customers to express a concern or for recognizing someone for going above and beyond would give our customers the opportunity to choose how and when they provide feedback.
At the heart of any successful customer relationship is the fact that we must listen and respond to our customer needs. Customer excellence starts with an exceptional customer experience. But thats only the beginning of what we have to offer to our customers. To demonstrate our continuous commitment to building solid customer relationships, this fiscal year we are introducing the first Customer Excellence annual report that focuses completely on the feedback received from our customers and how we integrated their voice into everything we do. The 2012 Customer Excellence Report effectively communicates to our customers our promise to build relationships that work for them, provide explicit examples of customers and employee testimonials, illustrate the pride of our creative people, our innovative technologies and the comprehensive services that we offer to our customers; while at the same time reports annual results in regards to our loyalty metrics results. The 2012 Customer Annual Report can be downloaded @ http://loyalty360.org/resources/research/SiemensCustomer2012. The following key points are some of the key areas we address in the 2012 report: Your voice drives everything we do: Internal Initiatives Committed to exceeding your expectations: most important key attributes to the customer You spoke. We listened: Annual loyalty metrics results Investing in the best: commitment to our employees Building relationships that works for you: Training initiatives and local presence Also, with our new customer loyalty program we will personalize the customer experience. To start we have produced three short executive videos that effectively illustrate our commitment to our customers. The message concentrates on expressing our gratitude to our customers for their feedback and expresses what we are doing with it. At the same time it provides a high level overview of what we stand as an organization. The videos can also be found in our customer website. The first one focus on Results: The Commitment from our president to drive customers excellence, provide results, thanks our customers and invite them to provide feedback. The second one Customer Centric: Illustrates the commitment to our employees, our market strategy and Voice of the Customer initiative and the third one Operational Excellence: Is about our Field operations and our local presence in key areas.
Linette:
Jennifer:
Q. What technology (or strategy) do you believe is imperative in advancing VoC initiatives?
You must have commitment from Senior Management as well as investment to advance your VOC initiative. If you do not have the proper support in driving a customer centric culture throughout your organization you are at risk of doing more damage than good by capturing VoC. If you do not act on your customers feedback once you have received it you are putting yourself at risk as being viewed as indifferent and may turn a Promoter Customer into a passive or detractor.
About
JEnnifEr sChMitt D i re c t o r, Cus t o m e r Exc e l l e n c e Recognized for establishing several best practices for VOC Voice of the Customer program that is used throughout Siemens and the Customer Experience Industry. linEttE MYland Ma rke t i n g Ma n a ge r, Cus t o m e r Vo i c e , Si e m e n s Bui l di n g Te c hn o l o gi e s Responsible for the Customer Voice program. glEnda CardEnas Ma rke t i n g Ma n a ge r, Cus t o m e r Exc e l l ence, Si e m e n s Bui l di n g Te c h n o l o gi e s Responsible for the Customer Loyalty and Customer Experience programs.
Linette: Creating opportunities for customers to be part of our product design and process improvement is imperative to advancing Voice of the Customer initiatives. Everything we do, we do for our customers so it only makes sense to include them when identifying product requirements or improvement opportunities. Including our customers gives them a feeling of contentment knowing that we value their insight.
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LOYALTY FORUM: TRENDING NOW
TRENDING NOW
cross channel connections merging the silos
Omini-channel
Multichannel lines are blurring and the future of connected channel engagements, delivering well-matched customer experiences, is NOW. Omni-channel marketing is being embraced by marketers who strive to meet the expectations of their customers and deliver a seamless experience within all potential customer touch points and mediums. Marketers today are beginning to understand the importance of delivering the right message at the right time on the right communications channel. leading the trend in Standardizing omniChannel idealS with their CuStomerS:
toys r us amc theaters starbucks
learn more about all of the trends and technologies shaping the future of customer loyalty at the 6th annual loyalty expo! Presenters from top brands such as: kellogg Company, time warner Cable, officemax, Sylvan learning, lettuce entertain you enterprises, Suntrust bank, Shell lubricants and Siemens building technologies will be sharing their stories about customer experience, omini-channel loyalty, Smartvideo and more.
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DeliVeRinG eXPeRienceS FOR aeVeRYOne not just select few

Imagine. How many customers can you engage with an offer for an opportunity to WIN a unique experience? One might expect the numbers are fairly good, but there is a missed opportunity to build a positive experience for those customers who engage but ultimately dont win or worse those that dont engage at all because the low perceived value in the opportunity. NOW imagine if everyone was a winner. What does that do for your brand image? Brands today who can offer an engaging and exciting experience for ALL of their customers are winning big. Savvy brands today are partnering with local businesses and experience providers in partnerships that are mutually beneficial for all; driving business to both brands while creating an engaging opportunity and a positive experience for the customer. Examples of potential partner experiences include: concerts, music downloads, movie tickets, a round of golf, or spa treatments, the possibilities are endless!
thiS trend iS CatChing on faSt. Some notable brandS are already in the game
best buy mobiletm - happy 24 customerstm scott shared values program tyson foods tyson says thanks mom promotion lipton tea & the sxsW music festival promotion green mountain energy - monthly loyal customer thank You
the human connection not just personalized its personal

Without regular personal interaction with ones customer the ability to develop a relationship that creates an engaged advocate and loyal fan can be challenging. The trend of creating personalized videos to deliver relevant real time content and customer service is going beyond personalization to virtually humanize customer interactions and improve the overall experience with a brand. Some videos provide product information & video recommendations or walk a customer through their personal billing statement. Others are offering related content, perhaps as an example, cooking demonstrations from a CPG company or energy saving tips from a local electricity provider. By taking personalization to the next level, the video experience is a new method for creating virtual relationships with otherwise untapped loyal customers.
SmaRT ViDeOS
brandS who are leading the video trend
at&t video billing office depot product videos time Warner cable
Check out an example on YouTube. A SmartVideo Demo for Southwest Airlines: http://www.youtube.com/watch?v=QvZOaFSLlxw
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FEATURES
CARD-BASED
Embracing the Best of the Old & the Benefits of the New
Va n E s s a h o rw E l l
ThinkInk
T
Co-branded cardholders outspend traditional cardholders
hanks to technologys continued advance, consumers are more product-aware today than at any point in history. Before an in-store or online purchase is made, theyve done their research, they know what they want and theyre reluctant to compromise. Armed with smartphone in hand, the same research and purchases can be done on the go, too. However, the mere offering of a reward card is no longer enough to engage consumers; what matters most is if the reward card simply and directly aids in the consumer shopping experience. That said, card-based loyalty programs are increasingly popular. Today, co-branded cards cards that link consumers, brands and credit card companies together and often include a loyalty component are estimated to make up half of all credit card spending, while growing at a faster rate than non-reward cards. In fact, co-branded cardholders outspend traditional cardholders by $4,900 per yearloyal to where those dollars are spent and with whom.
then vs. now Today, some form of loyalty program can be found in virtually every market segment and executed through a myriad of vehicles and currencies. The biggest differences between then and now: the amount of data stored has grown exponentially, and the ability for consumers and marketers to act on that information from multiple touch points in real time is nearly as great. In fact, a report from IDC reveals that in 2010 the total amount of digital data on the web reached one zettabyte, or one trillion gigabytes for the first time. Newer estimates are that that number has crept up to 1.8 zettabytes (or a 1 followed by 21 zeros) and will reach 7.9 zettabytes in 2015 and 35 zettabytes by 2020. The number of electronicallyand now digitally engaged customers in part through smart deviceshas increased at a similar pace, with smartphones reaching a 38% global penetration rate. In the US, smartphone penetration has crossed 50%. Nielsen bolsters those numbers finding that adoption rates for young adults, 25-34, is as high as 74% and nearly 60% of teens 13-17, own them too. Smartphones, with their metrics-generating ability, are now the dominant mobile device for US adults versus more basic models. Card-based loyalty programs, however, also benefit from modern data collection. Todays specialty card-based (from a specific store or store chain) and standard card-linked members (i.e. American Express, Visa, MasterCard) can easily check their balances or their recent spending habits online and on the go via their account. Far from its exclusively points-driven mentality, however, the new era of customer loyalty actually is taking a page from the past, its all about bringing back the importance of genuine customer connection while distributing relevant rewards. Repeated surveys underscore the importance of this linkage. In fact todays consumers, now inundated with multiple loyalty cards, have begun to tune them out, and are downright frustrated. ACI Worldwide, an electronic payments software provider, estimates that 78% of Americans over 18 own at least one loyalty card, but that 81% of them do not understand the benefits of membership or
loyal to where those dollars are spent and with whom.
per year
by $4,900
As a result, this smarter, cost-conscious, digitally engaged and mobile-equipped consumer is driving a change in the way loyalty programseven the more traditional ones reliant on cardsare structured. More so than ever, customers crave a relevant and almost instant ability to benefit from their loyalty membership, reluctant to wait the time it once took to redeem a prize for accumulated points. Nor are they inclined to deal with the processing snags or breakage that traditional loyalty programs are guilty of. Just think of all the unclaimed or orphaned miles, points or rewards that customers fail to redeem. Actually, thinking isnt required, heres a staggering stat: $16 billion. Thats the amount that goes unredeemed by American consumers out of a total of $48 billion worth of rewards points and miles. And if thats where the US numbers stand, it goes without saying that other countries are experiencing or are about to experience a similar surge. Traditional, card-based loyalty programs arent threatened by digital so much as theyre being motivated to mature. Faced with these consumer mindset shifts, todays loyalty programs need to change by adapting to the speed and complexity of the digital forces at play. In other words, a new era of customer loyalty has arrived.
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LOYALTY:
Consumers of them globally, according to recent researchknow the
86%
benefits of more data becoming more available to marketersand themselves.
are baffled on how to redeem their rewards. A related sur- Successfully managing card based or mobile loyalty provey by CrossView, which sells cross-channel marketing grams and the hybrid gradations in between, sharing their software, found that 66% of its respondents said that loy- technologies requires some simple advice and steady alty programs had no impact on their preference of shop- guidance, and here are some tips to the always-connectping retailers. Additionally, the latest Forrester research ed consumer, always engaged and loyalty to your brand: shows that loyalty program perceptions have taken a Connect with Your CustomersEvery Day. Loyalty prohit in recent years. In 2011, 21% of survey respondents grams arent just about racking up points anymore. By linkagreed with the statement that Most loyalty programs ing your companys brand and its experiential marketing dont offer any real value, up from 15% in 2008. Loyalty plan to your loyalty program, you can reach your customers program members make up only 35% of a companys to- even when they arent purchasing directly with you. tal customer base, and of that 35%, just under one-third Ditch the One Size Fits All Approach. Here its good to redeem their rewards. think in plural. Dont just have a loyalty program, have Viewing this data through an optimistic lens means that loyalty programs that are tailored to specific types of for marketers, heralding a new era of loyalty has never customers. Offer Aggressive and Attainable Rewards. Dont make been more critical. your customers jump through hoops. Offer rewards that where were going: technologys leAp customers want, are relevant to them and that are more And trends on the cheAp easily attained. Its a cluttered and fast-paced world out there for con- Go Digital. Close the so-called digital loop by making sumers and the potential loyalty overload was never as your loyalty program interactive via apps, real-time games, great. With m-commerce (mobile commerce) rapidly customer feedback and social media. Sites like Facebook, gaining on e-commerce sales and already pulling in some Twitter and Foursquare remain a largely untapped return $6.7 billion in 2011 and forecast to grow to $31 billion in on investment ground (ROI) for marketers. sales in 2015, life, mobile life, is moving fast. The reality is Use New Methods to Reach Loyalty Members. Conthat customers who dont feel like theyve made a genu- sider adopting the latest breed of card linked loyalty proine connection to a company, or that their rewards programs and other digital mediums. With online linkage, a gram is too complicated to access, (an all-too-common customers buying habits will trigger advertisements for problem) or that the companys offers are irrelevant to relevant rewards when they visit their personal banking their needs, will tune out and seek another companya web site, airline emails and browsers apps. company that rewards them more easily, more efficiently These methods, linked with more traditional card-based and with more relevant offerings. In fact, a recent survey approaches, will help loyalty program managers drive inby analytics company ClickFox found that 72% of the creased customer engagement, promote more efficient 427 respondents felt that having a great customer serloyalty programs (i.e. less expensive), ensure more relvice makes them loyal. Quality of the product, meanwhile evant rewards and provide new ways for brands and contopped the list as more than 80% felt it was most imporsumers to engage with each other. tant. For card-based loyalty, product quality could very well mean the cards themselves and the custom service offered throughout the loyalty program.
Dont just have a loyalty program,

have loyalty programs that are
tailored to specific types of customers.
continued on next page Loyalty Management FIRST QUARTER 2013
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Card-Based LoyaltyV a n E s s a h o r w E l l (continued)

looking AheAd: how custoMers cAn be engAged without being enrAged dAtA collection done right Todays advanced ability to measure all facets of consumer behavior lies at the backbone of loyalty success. As such, marketers must understand the implications of data security and privacy. Consumers86% of them globally according to recent researchknow the benefits of more data becoming more available to marketersand themselves. They are also increasingly diligent on seeking transparency from the marketer and loyalty manager about what data is specifically collected and of course, expect to have the option to back out of such collection and programs. It would serve marketers well to address these concerns proactively in existing programs; making security one of the principal assets of the value proposition. Some might see that as overkill but there is evidence to the contrary A UK study suggests 49% of United Kingdom millennial and 48% of older populations said they are very to extremely concerned about overall data security and privacy. Similar numbers can be expected across North America as both regions are equally tech savvy. the new erAs loyAlty send-off Although growing smartphone penetration and consumers increasingly mobile mindset is driving increased mcommerce sales, physical loyalty cards have more than held their own, having not run out of history just yet. Theyve done this by taking the best from the oldestablishing a genuine real-world experience, but by using the benefits of 21st century mass data measurement, metrics and analysis gathered through swipe and contactless cards to gain a more accurate customer picture. However its also incumbent on marketers to heed the data that shows mounting customer frustration with current loyalty initiatives. Known for their fickle habits and interests, todays tech-savvy consumer will not wait for a loyalty programbe it card based or otherwisefor it to work out its weakest links. A modern loyalty program must be a grand slam success the minute it steps up to the plate, to achieve marketing success. Technology has had a profound impact on the way customers interact with, learn about and purchase from their brands of choice. On one hand, too much technology has driven some customers away feeling inundated with
rewards programs that talk much, yet say little. On the other hand, todays card-based loyalty programs would not be able to exist were it not for anywhere and everywhere web access, via laptops, desktops, tablets and smartphones collecting valuable shopper data and buying habits in the process. Its also important to recognize that as much as the new era of loyalty requires the newest technologies, incorporating more traditional elementswhether its actual customer service ambassadors or websites that invite customers to input their product and company feedback in addition to their loyalty card use, driving a reciprocal dialogue, is just as vital. In other words, relevancy, authenticity, timeliness, transparency and efficiency are just as important today as they were when the first loyalty campaigns were launched decades ago. Weve cut the lard from the card and what remains is an ideal partnership between technology and tradition. Swiping their way into digital history, the loyalty card has come of age and its done so by embracing the best of the old and the benefits of the new. More than just racking up points or miles, card loyalty ownership continues to be a relevant, vital, engaging and fun customer gateway to a product or company. Rather than being overtaken by smartphones and the advance of the mobile web, card loyaltys customer loyalties have never been greater. L
Relevancy, authenticity, timeliness, transparency and efficiency are just as important today as they were when the first loyalty campaigns were launched decades ago. Weve cut the lard from the card and what remains is an ideal partnership between technology and tradition.
Vanessa Horwell is the founder and Chief Visibility Officer of ThinkInk and has spent the past 20 years working with companies in the US, UK and Europe, developing successful campaigns and strategies for their brands.
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5796_Loyalty.indd 29 1/24/13 11:34 AM
FEATURES
sYLvan LearninG:
inside sCoop:
LoYaLtY & referraL ProGraM strateGY for sUCCess
l oY a lt Y 3 6 0 i n t E rV i E w w i t h s a r a C o s t E l l o & franCEsCa MuhlBaiEr
Sylvan Learning
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n todays economic surroundings, its clear that customer relationships are a key to success at sylvan Learning. And, referrals are key to driving revenue for their business. As a result, the sylvan Marketing team was looking for systematic, scalable methods of building a strong loyalty program and strengthening communications between centers and customers. Working together, marketing and operations defined a process and a prescriptive plan to align in-center operations, marketing, CRM and analytics. sylvan Marketing has been able to impact the bottom line and enable their franchises to build stronger loyalty with their customers through the referral program, and succeed in their local markets. in the Q&A that follows, we hear from sylvan about their process in determining the best approach for their customers when creating a strong loyalty strategy.
first, tell us A bit About sylvAn leArning And your custoMers.
whAt did you leArn froM this reseArch thAt you found unexpected? We found that we were different than most companies in terms of how we could and should reward our customers. Most of our customers complete their program, their need has been fulfilled, and they dont return. However, their experience was very positive. But that said, we want to be an educational partner across a students K-12 set of needs. We found we needed to engage our current and former customers differently, in order to maintain a relationship with them over time. whAt wAs your process for securing internAl buy in froM both c-suite executives And frAnchisees for the progrAM? Our executive team was supportive of the idea that we needed a referral program given the numbers associated with our referral business. We also worked with a franchisee advisory board that helps us prioritize initiatives that have an impact on operations. We laid out the complete process and looped the team in along the way to ensure that we were all on the same page in terms of what our goals and expectations were as an organization. Once we had outlined a solid process, we began recruiting for a Pilot, with the support of the franchisee committee. how is the sylvAn progrAM structured? shAre A bit About the offering We developed a full operational process to span person-to-person referrals, plus online reputation management (one-to-many influence). The full process included marketing automation, in-center operations, marketing, and analytics. One of our key components was to ensure that the program was implemented consistently across all channels, especially in-center, beginning with our sales staff.
About Sylvan Learning Sylvan Learning is the leading provider of personal learning services to students of all ages and skill levels. At Sylvan, we tailor personal learning plans that build the skills, habits and attitudes students need to succeed in school and in life. Sylvan offers affordable instruction at over 800 learning centers in the United States, Canada and abroad. Our Customer The Sylvan Digital Mom. The demos: age 25-54 with a household income of $75K+ who has a child in school (grade K-12). The nondemos: Mom is the manager of the house and family; creating rituals and using whatever tools she can to keep everyone on track, using technology to help her do so. Shes ambitious, has multiple kids, shes flawed, she never gets enough sleepand sometimes just a bit crazy. why the need for A custoMer loyAlty focused progrAM? Referrals and repeat customers are a key driver of revenue and profitability for our business. As a result, the Sylvan Marketing team was looking for systematic, scalable methods of building a strong loyalty program and strengthening lifetime and lifespan communications between centers and customers, and customers and their circle of influence. wAs industry reseArch, or were custoMer insights, of vAlue As you deterMined the AppropriAte loyAlty strAtegy for sylvAn? Given the metrics and revenue associated with our referral business, we knew as an organization that we needed to prioritize a strategy and implement a consistent process to make this a focus for our system. That said, the team completed an evaluation of loyalty and referral programs in the industry. We also attended the Loyalty 360 conference in 2012 to gain insights into how other organizations were tackling customer loyalty and engagement.
Given the metrics and revenue associated with our referral business, we knew as an organization that we needed to prioritize a strategy and implement a consistent process to make this a focus for our system.
The offering is a Friends & Family Benefits Program, including three main program components. The first is rewards for life, offering free lifetime skills assessments to previously enrolled families. This means that a prior student can come into a Sylvan center once a year and take a free assessment to understand current skills levels and opportunities. We believe this will strengthen our bond with families, and help create opportunities to serve them, after an initial time of service is complete. The second aspect of the program is the referral rewards. When a Sylvan family refers for us, when their friends/family enroll in a Sylvan program, both the Sylvan family and the newly referred family earn a free week at Sylvan. The third component is focused on online reputation and social referrals. Using marketing automation, we encourage families to post online reviews and share referrals socially. We believe this will expand our referral reach, and tap into our Moms social investigative and validation behavior.
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Loyalty & Referral Program Strateg y for Successs Y l V a n l E a r n i n g , (continued)
who is your tArget Audienceone could Assess thAt sylvAn ActuAlly hAs two custoMers with eAch interAction both the pArent And the student. do you Address both? Our target audience is the Sylvan parentDigital Mombut ultimately its the student experience that matters the most. You could say that the student is the lever to get to Mom and help drive customer satisfaction, once the family has enrolled. If the student is happy, succeeding and seeing success, the parent is happy! In our primary marketing efforts, our focus is on the parent; however in other initiatives were testing teen outreach in the social space in particular. whAt Are the chAllenges sylvAn fAced in developing And integrAting your loyAlty progrAM? Change management in operations particularly is always a challenge for us. This includes having center staff embrace a referral culture and this new process. Making sure center staff is consistent with their approach is also a struggle. Thats why weve added some of the automation elements, to help make sure the program stays top of mind with families. The whole goal is to drive incremental enrollments through referrals (person-to-person and online), but a key challenge is for our teams to view the investment in the referral program rewards as more than just an expense. Once we can demonstrate incremental revenue and profitability from the program, we believe we will gain broad and full adoption. how were these overcoMe? Training, training, and more training. Our work is never done in this area. We also scheduled on-going peer-to-peer calls with our centers in an effort to reinforce operations, the training and to help them learn from each others successes. We have two audiences here; the center staff who are implementing and the franchisee who is buying into and supporting the program. Different communications and methods are needed for both, to address individual needs. Plus, the proof is in the pudding in certain respects. Perceived success builds program confidence, which drives momentum, which drives measurable results. sylvAn is A frAnchised orgAnizAtion, whAt unique opportunities does this present in creAting A progrAM for your custoMer? See above regarding change management. Another common piece of feedback is that our franchisees each believe the program they developed just for their community is just right for them, and they may resist a system-wide approach. We believe that proactively acting as a full system, consistently and with quality practices and processes, will yield excellent results. When we can get everyone acting together, we can learn from each other and propagate best practices.
whAt do you love Most About the sylvAn custoMer loyAlty progrAM? Structured process! We believe this is a solid combination of an integrated process for our organization, optimizing peopleto-people interactions, supported by marketing automation, taking advantage of Digital Moms online and social nature. We love that weve built this process with a focus on the customer and putting our customer first! Getting free lifetime assessments as a benefit of enrolling at Sylvan is a fantastical value, plus our Moms can share great values with their friends. Its a win-win!
whAts on the wish list for future progrAM developMent opportunities? skys the liMit! A complete closed loop process thats integrated with our mySylvan parent and student site where customers are rewarded within the site automatically. Not to mention widespread clamoring to get great Friends & Family benefits. We dream big. L
Sara Costello, Senior Director, Marketing, Sylvan LearningSara has led the transformation of marketing systems devoted to supporting learning centers in building strong relationships with their community of families. Francesca Muhlbaier, Local Marketing Manager, Sylvan Learning Francesca is focused on building integrated marketing campaigns for new product launches and for seasonal marketing campaigns.
W a s
C f
Join Sylvan learning at the 6th annual loyalty expo!
optimizing your referraL/LoyaLty program through integrated marketing and operations
Speakers Sara Costello and Francesca Muhlbaier will be presenting the session:
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Insurance
Financial Services
Communications
Public Sector
Utilities
Dont waste your money. Im a sure thing.
Will your marketing really change customer behavior? Or could you be over-marketing to the sure things that will buy anyway? Only uplift modeling can tell you. Pitney Bowes offers the worlds only packaged software application developed specically for the task of building uplift models which can predict the direct impact of your marketing. Make the move beyond propensity modeling, to uplift modeling, and realize benets including: Decrease marketing program spend by 20-60% Improve campaign results by 30-300% Eliminate the negative effects of marketing by weeding out the sleeping dogs Call our experts today at 800-327-8627 or visit http://slp.pbinsight.com/info/uplift for more information on the Uplift advantage. www.pb.com/software Solutions for Enabling Lifetime Customer Relationships
Every connection is a new opportunity
1/24/13 11:34 AM
FEATURES
The intersection of Customer experience, Big data and Contextualization

K E l lY f o r d
Smarter video
SundaySky
brands knowledge of individual customer preferences is critical for nurturing long-term relationships. This ensures an optimal customer experience, which is becoming a strategic imperative for companies to differentiate themselves and maximize acquisition, retention and growth. Whether a brands communications are based on segmenting customers via distinct marketing personas or delivering true one-toone experiences, customer intimacy has become the goal for any engagement approach.
Join time Warner Cable & SundaySky at the loyalty expo for the session: h oW to u s e Co n t e x t ua L i z e d V i d e o to f o st e r d e e p e r e n g ag e m e n t a n d Loya Lt y
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Big data is at the center of any customer-centric initiative. eMarketer recently reported that major e-commerce players such as eBay, Wal-Mart and netflix are using big data tools to deliver personalized experiences. Access to and use of structured customer data is paying off with higher customer spending and improved retention rates. personalized experiences based on big data are even more engaging and effective if that data has currency. According to eMarketer, half of the largest U.s. retailers use personalized techniques and tools on their e-commerce sites, but currencyreal-time application of datais where most companies struggle.
Contextualized video engagement communicates the importance of each customers relationship with the company and is applicable for each step in the customer journey. For example, when a consumer abandons office depots website without purchasing, the company retargets him with a video ad that includes a special offer tailored to that individual based on his recent browsing behavior and personal characteristics. AT&T educates new subscribers on its first months bill and promotes adoption of value-added services using personalized, real-time video. And such videos can be used further into the customer lifecycle to right-size, retain, upsell and reward. When data is relevant and presented in an engaging medium such as video, consumers feel valued as individuals. A customers unique persona can be reflected in the visual presentation and background style of a video. Upselling recommendations may vary by customers transactional data, while merchandising messages can differ between a soccer mom and a techie. A customers status may also differ by segment. For instance, a repeat customer could be incentivized with an earn special rewards message, while a customer who hasnt purchased in months might receive a welcome back message. Regardless of where online video is applied in the customer journey, and how rich a structured data set may be, the most critical element of a customer intimacy and personalized engagement strategy is devising a definition for success. What is the return on ad spend that you expect to achieve? What is the targeted cost reduction? What is the desired take rate on value-added services? Benchmarks will differ for each strategic initiative, but all should start with a defined set of success criteria, and be measured and optimized. Customer centricity is a compelling strategy for differentiation and long-term customer value. Brands investing in big data and contextualization initiatives are poised to deliver the most engaging and effective experiences in all touch points with customers. For brands that lead the way in adopting a personalized approach to engaging customers with video, the benefits promise to be vast. L
the perCentage of people Who WatCh video on a Computer onCe a month iS noW higher than the perCentage of people Who WatCh tv
Leveraging the latest profile, historical and situational data makes the difference between a positive and a not-so-positive customer experience. in certain cases, if data lacks currency, the business can incur greater costs. Take the everyday instance of a customer making a bank deposit in the morning and then checking her account online later that day. if those funds do not show in her online account, not only does the customer become frustrated, but the bank incurs cost when the customer contacts the call center. While contextualized, real-time data can be applied across multiple channels, video is the most captivating online medium. According to a recent nielsen study, the percentage of people who watch video on a computer once a month is now higher than the percentage of people who watch TV. While businesses have traditionally viewed video production as operationally challenging and cost-prohibitive to produce at scale (let alone to contextualize), video can now be generated at mass scale in an automated way, making production feasible and cost-effective enough to be sustainable.
As Vice President of Marketing, Kelly sets and executes strategies that build presence and pipeline for SundaySky, and ensure SmartVideo category leadership. A product of both established and emerging organizations, Kelly is a technology marketer and optimist who has built a 18-year career on a passion for breaking new ground.
eMarketer. May 2012. Big Data Can Be Hard to Harness. http://www.emarketer.com/Article.aspx?R=1009064#XxltvStikJmXzG7O.99 Jim Edwards. Business Insider. June 2012. UH OH: New Nielsen Data Suggest People Arent Watching TV Anymore. http://www.businessinsider.com/uh-oh-new-nielsen-data-says-people-are-turning-away-from-tv-2012-6?op=1#ixzz2FXB70DLd
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Loyalty Innovation
Drop Tank: PumP Rollback caRds
Who doesnt like to see prices at the pump rollback? Drop Tanks new cents-off-per-gallon cards, called Dropoints cards, do just thatdrop the price at the pump instantly. When a consumer swipes the card at a Dropoints redemption location, the price of each grade of fuel is lowered by the denomination on the card. Available in 10, 25, 50 and $1 off-per-gallon amounts, theyre perfect for any promotion, incentive or gift. And, Drop Tanks online card ordering tool allows purchasers to customize the cards with their own logo at no additional cost. Dropoints cards are not gift cards. They are single use promotional cards, good for one use, up to 20 gallons. Some example promotions/incentives include:
TECHNOLOGY, TRENDS & REWARDS
Products, Advancements & Technologies
Vipdesk MobilE ConCiErgE

VIPdesk Mobile Concierge makes it easy to place Concierge requests and access VIP Privileges from a mobile device. This innovative new mobile application significantly enhances Concierge and customer loyalty offerings through a new, relevant and fully-branded channel that can be used to provide access to Concierge service and VIP Privileges anytime, anywhere. VIPdesk Mobile Concierge allows users to submit Concierge requests via a userfriendly interface that feeds requests directly to VIPdesks expert team of Concierges. Users can also access over 1,500 VIP Privileges, deals and offers at leading restaurants, hotels and businesses in hundreds of popular travel destinations throughout the United States. Privileges, which are geocoded and sortable by the geographic location of the user, are redeemed via a virtual membership card and can include a free glass of champagne or appetizer, greeting from the chef, priority seating, room upgrades, invitations to VIP events and more. Other interactive features of VIPdesk Mobile Concierge include access to 15 exclusive city guides, articles and lifestyle information, and social media integration that lets users update Facebook and Twitter directly from the app. VIPdesk Mobile Concierge is completely white-labeled for each client, customized in its entirety to reflect desired branding.
When the plant is injury free for an entire month, each employee gets $1 off per gallon on their next fill. Get 50 off per gallon on your next fill when you test drive a new car. Redeem 500 points for 25 off per gallon on your next fill. Complete our survey today and get 10 off per gallon on your next fill
Redeeming Dropoints cards is easy and fun, and the cents-off-per-gallon currency is relevant to virtually everyone.
rio SEo keywoRd discoveRy automation (kda) tool:

The Evolution of SEO into Content Marketing Content is King is an overly-used expression in the world of search engine optimization, but its at the heart of any successful SEO campaign. Beyond generating website traffic and ranking well on search engines like Google and Bing, online marketers are re-defining success through increased customer engagement and social sharing of content. Its all in an effort to drive greater reach and interaction with customers and prospects rather than just market towards themaligning to stronger brand exposure, customer loyalty and revenue. Enter the Rio SEO Keyword Discovery Automation (KDA) tool. By tapping into a number of data sources, KDA helps marketers identify their target audiences own terminology and apply it to new content and keyword suggestions for SEO. By using the voice of the customer, KDA helps marketers identify ways to engage and position brands or products through the proven concept of promoting the topics and terms that consumers typically use themselves.
y tapping into a number of data sources, KDA helps marketers identify their target audiences own terminology and apply it to new content and keyword suggestions for SEO.
Finding the right terms and the most relevant content from the consumers perspective is the first step. This helps strengthen a marketers chances of being found by the search engines, and ultimately of being fully engaged in a mutually beneficial manner with current customers and qualified prospects. KDA was designed to walk marketers through this process. The software tool uses a unique workflow approach to not only offer content opportunities, but also help identify whether a companys website may already have content reflecting true consumer sentiment that just needs to be promoted more effectively. Through KDAs integration with other tools, Rio SEO also offers a solution to help optimize and promote content, illustrating the value of evolving SEO into the richer world of content marketing.
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CabInet: cabInet saFe

Cabinet SAFE by Cabinet (formerly Cabinet NG) targets the needs and budgets of small to mid-sized businesses in virtually every vertical including financial, healthcare, legal, accounting, manufacturing, human resources, among others. Workflow is included in the base product to help businesses automate processes and dramatically improve efficiency. Electronic FoundIt! Lost and Found filing cabinets are completely configurable and support secure IdentIFIcatIon servIce access rights at the repository, cabinet, folder and document levels. Document retention, integral auditing, and automated Your brand is about to naming templates help businesses meet compliance become a hero. regulations and shorten the audit process. Remember the last time you lost a set of keys, your cell phone, SAFE helps organize and secure all types of your purse, your favorite jacket? Your breath quickened, heart documents/files including: emails, memos, faxes, raced, eyes widened and stomach turned in knots. Where is it? forms, CAD diagrams, general electronic You had to find it, nothing else in that moment mattered. Everyone documents, and scanned images. SAFE facilitates has felt that panic. improved efficiency and customer service. Employees can access customer information to answer questions while the customer is on the hen a customer actually puts your logo on initial call and get information into the right hands for prompt attention with document and folder their most valued everyday items, theyre workflow. Included in the latest version of SAFE is a new document sharing portal capability called SHARE, which allows secure/encrypted document transfer between entities (bidirectional), with delivery status and collaborative note tracking. Insurance documents, case information, patient health records, job applications, tax forms, and payroll documents are a perfect match for document delivery with SHARE. SAFE accelerates business processes and prevents lost, misplaced and misrouted documents. As a result, users achieve powerful performance using the visual familiarities of cabinets, folders and documents. This unique approach reduces overall workload and consolidates information into a multi-user workflow environment that is secure and efficient.
publically endorsing you"
Now remember when someone returned something you misplaced? Maybe someone ran after you, Hey! Is this your phone? Remember the relief, the joy, the flood of gratitude? FoundIt! harnesses that hero moment and directs it towards your brand with their lost and found identification service. Get your customers to label their most important items with your logo. Your logo, FoundIts system. FoundIt! makes it easy for someone who finds a lost item to contact the owner without revealing the ownersyour customerspersonal info. Each of your customers receives a unique ID number printed on durable plastic tags and labels emblazoned with your branding. The Finder simply enters the ID into the FountIt! system and your customer receives an instant alert providing them with the Finders contact info and message. Your company is given credit for making it happen. Ultimate Brand Stickiness: When a customer actually puts your logo on their most valued everyday items, theyre publically endorsing you, which is the key to true brand loyalty. Your customers will see it multiple times a day. That leads to your customer thinking about your company more while carrying around a public, de-facto endorsement of your business. Build Community and Publicity: FoundIt! helps you build emotional loyalty that points or rewards just cant touch. One good deed begets another and that fact is not lost on your customers. That expectation is a baseline of trust that will expand and build their loyalty. You know when the hero moment happens they will sing your praises from the treetops.
aFFInIon LoyaLty Group LaunChes MotIvenGInesM , an enhanced versIon oF theIr customer-centrIc IncentIves deLIvery PLatForm that aLLows brands to reward sPecIFIc behavIors and engage dIsenchanted customers
Positive customer experiences build lifelong loyalty and are at the heart of a lasting company-customer relationship. In fact, a recent study by the RightNow Customer Experience Impact Report found that 86 % of consumers were willing to pay more for a better customer experience. To assist companies in providing a superior customer experience, Affinion Loyalty Group has launched an enhanced version of their incentives delivery platform, MotivEngine. New features ensure a simple to use, behavior-based rewards and incentives delivery platform that offers companies the ability to reward positive customer behavior or rapidly fix a mistake. Companies that leverage MotivEngine are able to access a diverse catalog of gift cards, digital goods, and merchandise rewards to use as incentives. The robust platform affords companies the ability to simultaneously run different campaigns based on the service situation, the member profile, or other segmenting criteria. More than ever before, the highly-connected, fast moving world we live in requires companies to be able to create an engaging, valuable and memorable customer experience, said Mike McDonnell, Vice President of Product Management and Client Solutions at Affinion Loyalty Group, Whether trying to mitigate a poor customer service experience or incenting a desirable behavior, MotivEngine connects your customers to your brand through positive reinforcement.
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C h a l l e n g e S or o p p o r tQuestionst i e s? u n i answered technology & data

Loyalty 360 Interview with C i n d Y f a u s t A i m i a
indy Faust, Vice president, product Management at Aimia, offers her insight into the technology and data-based challenges that confront todays loyalty focused marketers.
whAt concerns keep your clients And others up At night? Marketers are facing a lot of changesboth challenges and opportunitieswhich make the strategic approach to their loyalty efforts less straightforward than it has been. Gamification: First, loyalty programs have had a gamification element since their beginning. Play was based on tiers or member segments, and the game consisted of collecting enough points and using an interface provided by the sponsoring company which allowed players to track their progress toward goals or a soughtafter reward. Lately games have gotten more sophisticated. Gamification needs to be part of a brands overall loyalty strategy. Its always been about rewarding interactions and achievements just as you would transactions, but these are a means, not an end. These tactics should focus on providing deeper engagement between the customer and the brand. Partner Strategies: Next, companies are considering providing additional value to their program members by allowing point redemption on other merchants websites or by adding additional partners to their program. Partner strategies offer participants a stronger value proposition, as these strategies enable faster points accumulation and/or provide additional redemption options. For example, our Nectar UK program, the most popular loyalty program in the U.K., recently announced a partnership with eBay, the U.K.s largest online marketplace. The partnership allows Nectar collectors to earn points as they shop on eBay by simply linking their Nectar cards with their eBay accounts. The best part is how easy it is for members to benefit from this added program feature. I advise clients to work with a company that specializes in coalition and partnership strategies. Strategic considerations should include ensuring the right selection of partners, communication of member benefits, and a review of all actions impacts on the programs economic model before marketers hit go.
POS Gets Powerful: Lastly, retailers are experiencing a rapid pace of point-of-sale (POS) upgrades as an area of competitive advantage to enhance the customer experience. For example, mobile POS is quickly being adopted at a fraction of the cost of traditional register environments, as these are operated with iPod Touch and iPads as opposed to more expensive registers. The benefits of these changes include stronger system capabilities with the ability to affect the customer journey, significant operating cost reduction, and the ability to service customers anywhere in the store on demand. I recommend retailers consider this as part of their customer service and loyalty strategy. Granted, mobile POS and other incremental system upgrades cant take the place of a more robust loyalty platform for an end-to-end program. But using these mobile systems dramatically simplifies implementing technology advancements for marketing programs, as they are typically easier to enhance and provide more options for driving in-store experiences for the loyalty program. technologies Are continuAlly evolving. how cAn MArketers deterMine which Are right for their MArketing efforts? Determining which advancements to take advantage of now versus holding off on those that may not have as much relevance depends on the organizations key objectives. There is a lot of buzz about mobile, social, gamification, and new payment offerings like Square, but if both program and company needles arent moved by whatever tactics are chosen, marketers may be investing in things that will never provide the benefits they seek. Participants need to understand the value exchange, and to believe the program offers something thats worth their time to participate in or, even more importantly, thats super simple for them to adopt and that saves them time. Thats why data and a strong understanding of the customers are so critically important in any loyalty technology strategy. Having a test-and-learn mentality, one where proofs of concept are encouraged through customer reactions to quick-hit initiatives, is something weve been stressing to our clients. The companies that have the strongest understanding of their customers, and can learn and adjust the fastest, are the ones that will be the most successful. But that understanding requires improved control over the continuous circle of insight, action, and interaction that enables a marketer to influence singular moments in the customer journey.
Join Aimia at the 6th Annual Loyalty Expo: Aimias Vice President of Client Services, Michelle Davis and Chris Guerreo,
Global Marketing Manager, Shell Lubricants will present the session: Truckin AlongHow Shell Rotellas MyMilesMatter Loyalty Program Puts the Pedal to the Medal
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how do you ensure, in A constAntly whAt Are the pros And cons of AdvAncing technology world, thAt insourcing versus outsourcing MArketers hAve the right technolloyAlty plAtforMs? ogy in plAce? While insourcing may seem to be the right Marketers are faced with the challenges of action in the short term, there are long-term emerging digital and social channels, cloud implications that will impact a loyalty programs technologies, big data hurdles, and consum- ROI as well as increase costs for the companys ers who expect personalized, relevant offers. internal IT department. For example: Aimias product development focuses on pros: *Initial cost savings over outsourcing how to address these market needs by the platform setup to an external provider, providing simplified and integrated technoland the ability to leverage internal resources ogy capabilities that make taking advantage for the build and run. of these innovations more cost effective, *Retention of internal, consolidated ownerand with packaged solutions that help ship of the customer data. address these challenges. *Knowledge of internal system requirements
server hardware in the data centers, or any other requests. Additionally, in-house IT doesnt specialize in loyalty technology, so speed to market and turnaround times will be slower. Furthermore, ITs lack of loyalty platform expertise reduces marketers access to the most feature-rich platform and digital strategies. with the overwhelMing dAtA tsunAMi, how do you wrAp your ArMs Around whAt to use And whAt not to use? The most important element of any data strategy is knowing the questions to ask of the data that will really make a difference. Even a small edge in insight can mean a significant competitive advantage and revenue. Technologies like Hadoop provide cheaper ways to mine massive data sets in extremely short amounts of time. Clients are using data to get closer to their customers and to provide more relevant and personalized offers. Using relevant offers has paid dividends for retailers like Amazon and Zappos. According to this years Brand Keys Customer Loyalty listing, both of these retailers have surpassed Walmarts ranking among the Top 10 in Customer Loyalty. Shopper insights will take a more prominent role across all verticals in loyalty marketing as consumers expect more from their local bank, grocery store, and from the retailers where they shop both online and in-store. The key is in looking at the right data for consumers and providing the best experience possible to drive engagement. In a crowded world with too many choices, only the strong brands with the best customer experience will stand out. L
Tools that put the marketer back in control of their data and their programs are fairly rare. A properly designed tool allows the marketer to first define the loyalty strategy and then work with the right provider to develop a matching technology solution and implementation roadmap that addresses the objectives in order of importance and in a way that will provide benefits and ROI along the way. Such tools make the process more of a self-funding journey, rather than one that doesnt deliver returns from the beginning and is simply a me too play in the market. Essential components include the right tools to manage promotions, track the success of those promotions, and monitor key metrics such as retention, churn, acquisition, and engagement levels in real time so a marketer can make adjustments along the way based on the results achieved.
beyond the loyalty platform for integration. cons: Initial build costs may appear lower, but platforms require ongoing investments that provide them with the most relevant features based on shifting business needs. Additional spending on infrastructure, middleware, new development of enhancements, and platform extensions from third parties that provide needed functionality will eventually dwarf the initial investment. External companies that specialize in loyalty and host the required technology consistently invest in these assets as part of the service contract. The same internal IT resources that manage the loyalty platform also manage all other IT systems. Requests for changes (such as launching a new promotion or analyzing customer engagement) will be put into the same IT work queue as updating the enterprise resource planning system, upgrading
Cindy Faust is vice president, product management at Aimia. She is responsible for setting the strategic direction of product development based on client and market needs, both in the U.S. and globally. Prior to her current role, she was vice president, Client Loyalty Technology.
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reVoLutionizing the
r e S tau r a n t experienCe with m o b i l e
Doug Dwyre Mocapay gEoff alExandEr L e t t u c e E n t e r t a i n Yo u E n t e r p r i s e s , Wo w B a o d i v i s i o n
oug dwyre, president of Mocapay chats with Geoff Alexander, Vice president and Managing partner of Lettuce entertain You enterprises Wow Bao division. The two will be sharing details of the mobile-enabled Frequent diner program and successful mobile marketing strategies at the 6th Annual Loyalty expo.
whAt do custoMers Most wAnt to see And whAt Are they beginning to expect froM restAurAnts in delivering A Mobile experience? Customers expect that the experience be easy and anything that helps make the process quick. how hAs wow bAo tAken AdvAntAge of Mobile technologies in A unique wAy thAt differentiAtes theM froM others in the restAurAnt industry todAy? Wow Bao has been innovative in every way with mobile technology. We were one of the first restaurants to go mobile with gift cards, as well as coupons. We utilize social media and have been held up as an example of a restaurant company who uses social media and mobile effectively. Wow Bao has embraced the saying, go big or go home. When utilizing mobile, whether via couponing, offers, or social, Wow Bao gives and gives. Our thought is incent guests to visit, reward them for using the technology, and the dividends will be paid for countless times over. one of the trends we Are seeing in the food service industry is Mobile & tAblet pos integrAtion. is this soMething wow bAo offers or would like to offer? Wow Bao is interested in tablet integration and we are currently working on some very exciting projects. whAt About custoMer response to engAging with these devices? is it for everyone or is the Audience still liMited? We find that the customers love engaging with these devices, everyone has a mobile phone, no one leaves home without it. There doesnt seem to be much hesitance in using mobile, customers want this innovation. does wow bAo offer Mobile pos rewArds redeMption, pAyMents or coupons? Yes, as part of the Lettuce Entertain You brands, Wow Bao does offer a mobilized Lettuce Eats Loyalty Card through the Lettuce Eats App. We also offer mobile gift and mobile couponing thru the Mocapay app, but are working on building our own Wow Bao app to be released soon too!
whAt Are soMe of the populAr Mobile innovAtions thAt wow bAo hAs used for custoMer engAgeMent And loyAlty integrAtion? Wow Bao utilizes several of Mocapays products including mobile gift, mobile marketing, mobile couponing and comp cards. We are able to offer our customers the ease of having all of these products available on their mobile phones so they no longer have to carry cards around. The comp card has become one of our favorite products to give customers to incent trial, as well as help with customer recovery. whAt About the wow bAo Mobile offering Are you Most proud of? whAt Are you Most excited About? We are proud of everything we do and really enjoy the innovation we provide our customers. We are excited to build a new app that will include the mobile functionality of payments, loyalty and coupons, as well as online ordering functionality and more. if liMited to just one Mobile strAtegy, whAt is An eAsy but innovAtive tool AvAilAble to restAurAteurs for engAging custoMers with Mobile? Honestly, building a list of mobile customers and engaging them every couple of weeks with a special offer is a no-brainer.
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Joined by Doug Dwyer, geoff Alexander will be sharing his story at the 6th Annual Loyalty expo, during the session, Mobile Loyalty: Creating Merchant and Customer Centric Mobile Camp
whAt were soMe initiAl concerns And how were these chAllenges overcoMe when offering Mobile pAyMents & rewArd redeMption? Initial concerns were just how the POS implementation would work and how customers would take to the new technology. The entire process has been incredible and met with a huge positive response. in todAys sociAl environMent it doesnt tAke long for A discount or coupon to go virAl. how do you Address concerns of coupon frAud And shAring online? This is exactly why we love the way Mocapay handles couponing. Customers have to opt into our mobile program, by texting BUNS to 466622; once they have joined our program, they receive a coupon or special offer every two weeks. Our optout is essentially a non-issue as our customers are very loyal and only opt-in if they want the special offers. Also, because the program is connected to each mobile number, the customer can only get the offer once and only redeem the offer once, they cannot share or forward the coupon either. There is no fraud now! how does one best identify their Mobile custoMers? We own our list of customers with the Mocapay program, which is a valuable part of this solution. We have access to their name and mobile number and can see which products they use and how often.
how do you go About tArgeting the right custoMer for Mobile coMMunicAtions? We can run reports and can send out offers specifically to people who did respond, who didnt respond or people with specific types of tenders.
Incent guests to visit, reward them for using the technology, and the dividends will be paid for countless times over.
Are the lettuce entertAin you enterprises restAurAnts connected through A Mobile progrAM or is All MessAging And interAction segMented by restAurAnt brAnd And custoMer? why is this iMportAnt? Lettuce Entertain You Enterprises has a large frequent diner club with over 130,000 members. This program has been mobilized under the Lettuce Eats app and now our customers can use their plastic or mobile card interchangeably. These cards can be used at any of our brands to earn points or redeem rewards.
how hAs the wow bAo Mobile experience influenced the sociAl sphere? Wow Bao was the third restaurant in Chicago to join Foursquare when it launched in 2009. We work really hard to be the industry leader when it has comes to mobile and customer engagement. We were one of the first restaurants to offer mobile gift cards.
is this soMething custoMers Are Asking for? do Mobile pAyMents & rewArd redeMption offerings chAnge the gAMe? Absolutely, mobile payments is rapidly becoming real and it is a game changer for many reasons. do you see greAter frequency in return visits or increAsed spend As A result? Yes, we have seen a 300% ROI and because we keep our customers engaged, their visits are more frequent and we do see increased spending. L
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Modernizing for digital integration:

JEff siMpson
new tooLs for anaLYsis & insiGHt

Harte-Hanks
o improve the brand experience and differentiate themselves in the eyes of consumers, companies must integrate digital information into the traditional customer view, and use insights to refine a brands overall marketing strategy. This requires not only re-orienting the nature of outbound initiatives, but also optimizing inbound interactions across every point of interaction.
Progressive brands are tapping new tools and methodologies for analyzing and applying engagement data, including the following: digitAl AugMentAtion This approach includes using third-party data collections, such as online cookie pools, social profile databases and digital channel appends to add identifiers that you can use to match activity to existing customers. Advanced marketers are using cookie pools to map previously unknown online activities to individuals in the CRM program, optimizing their experience in real-time (on the Web, within ecommerce, or through media partners) and personalizing communications across channels by applying product or topic preferences and triggering dynamic messaging. Many are also using data partners to link the social/digital profiles of highly-engaged
consumers to those of known customers, and using that information to drive targeting and messaging decisions. This is all accomplished with due respect to customer privacy and the customers established communications preferenceswhere the consumer can choose not to have his or her online behavior activity tracked for marketing purposes. online engAgeMent MApping The increased popularity of ecommerce and content marketing, coupled with the potential of the Web to provide new insights into consumer activity, make integration of a brands online data essential for marketers. Many brands are using Web tracking tools such as Google Analytics, Omniture or CoreMetrics, but the true value for marketers comes from being able to map the recorded online activity with offline information, and then use that to enhance marketing initiatives. The combination of proprietary cookie placement, third-party cookie pools and welldesigned identification and opt-in processes can provide a brand with enough information to effectively link a customer or prospects behavior to an offline profileall in service to the consumer. It also facilitates design
segmentation, experience and scoring strategies around consumer interests, rather than simply relying on purchase history alone. Engagement mapping can also provide the brand with tremendous insights into each customers path to purchase by identifying the series of steps that customers commonly take as they research and begin to interact with the brand, prior to a transaction. sociAl plAtforMing A critical consideration when attempting to integrate social media data is the concept of data privacy; consumers in todays environment can be highly critical of brands attempting to interact with them without invitation. So marketers have begun to build social networks that encourage consumer participation, often through the development of online tools, games and interactive events. While some firms with tremendous market share have been successful creating their own proprietary social platforms, most have chosen to go where the customers are, and have begun developing applications/content for high-traffic networks such as Facebook, LinkedIn and Google+. While these applications have multiple benefits,
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one of the keys is the opportunity for platform users to provide explicit permissions to access their profiles and associated data, as well as to provide opt-in for marketing. A compelling social applicationwhere value is perceived and derived by the customernot only supports lead-generation efforts, but also provides identifying information to link consumer social engagement back to the customer relationship management (CRM) program. loyAlty progrAMs, revisited Brands that are truly invested in understanding their customers often choose to implement a well-structured loyalty program, which provides tremendous integration benefits, as well as customer retention and growth potential. By implementing loyalty incentives, a brand encourages customers to provide identifying information; these individuals are much more likely to do so than the average consumer because only through self-identification do they receive the incentives. The data collected through loyalty initiatives is usually much deeper and more comprehensive than that collected about an average customer, and can be effectively used to link social, Web, call center and in-store interaction points. referentiAl optiMizAtion One major problem with most integration solutions is that they are limited to the scope of data collected by the brand about its customers, and can only make matching decisions based on the information available. So unless a consumer communicates changes directly to the brand (such as changes of address, contact information, household status, etc.), the integrity of the customer view can become compromised over time. To overcome this, companies rely on marketing data partners with deep referential resources to maintain the accuracy of their customer data. These partners establish historical databases linking consumers and tracking their contact information over time; they typically design concepts such as consumer identification, change of address processing,
name enhancement, household assignment, roommate identification and channel appends directly into the integration process. In this way, the brand recognizes the value of each function, without having to invest in the data directly or coordi- One of the key benefits nate multiple vendors. of referential optimization One of the key benefits of referen- is that a brand gains the tial optimization is that a brand ability to identify links gains the ability to identify links between consumers that between consumers that it couldnt have found using only its it couldnt have found using own data. This comes first in the only its own data. form of identifying duplication; for example, identifying a single individual who exists in the customer view multiple times under different names and ID numbers, which skews the segmentation and customer investment strategies. The use of referential data allows a brand to identify and understand relationships that were previously not visible, and to adjust contact and investment strategies accordingly. In the end, a well-integrated and optimized customer view that brings together the data collected across all points of brand engagement can provide tremendous benefits to progressive brands: data optimized to map out the customer journey, including engagement paths and critical interactions; social and online consolidation, which empowers high-performance targeting, messaging and experience strategies; touch-point connection that empowers more productive, integrated marketing communications; investment insights that predict spending patterns, and reduce dollars spent on lowpotential customers; and, alignment of household or consumer groupings which provide context to joint engagement and purchasing decisions. L
Jeff Simpson is Senior Vice President, Marketing Strategy & Customer Insight, for Harte-Hanks.
benefits flow froM custoMer dAtA integrAtion of new & trAditionAl chAnnels
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LOYALTY prOgrAmS must go mobiLe is it that easy?

tHe fUtUre of tHe MoBiLe waLLet is UPon Us! 27% oF you are already oFFerIng a mobIle wallet and 67% oF you are evaluatIng teChnologIes For your solutIon or to upgrade an exIstIng solutIon
think product companies are rushing into wanting to be the first to try to grab market share of users by deploying an app. having a loyalty app is much different than deploying a full payment app with a rewards module. and paying in store with an app is far more involved than paying using a mobile gateway. If users are to have even 50 apps installed on their phones, finding an app when you need it fast will be like fumbling through your pockets to find that lose change while you hold up the people behind you. there needs to be an app that is the foundation for all companies to deploy there loyalty and payment solutions, that is not owned by anyone, only overseen to be developed for issuers to deploy custom solutions which would then plug into this solution. I think its to early to see what will unfold.
PAUL MCDONALD,
Consultant, Payment and Solutions Provider
eve been working on a technology platform @zeebric for brands to connect with buyers where one of the applications is a customer loyalty points system. the approach were taking with this is more along the lines of bridging an online mobile app based loyalty points system with the offline product that a buyer picks up through Qr code / 2d code labels placed on the item which buyers can interact with their mobile phones to collect their loyalty points. bringing a loyalty program to the mobile for the user has to be easy and engaging to get them involved and the one size fits all offers may not always work for all customers as personalized is increasingly what consumers in many areas are asking for. like paul pointed out perhaps having individual apps and finding apps for each brand or reward program can end up deterring a mobile user, it will have to be a simple process to trigger a loyalty program which in our case would involve a buyer or consumer scanning a product label with their mobile phones.
ne of the most important things to realize is that mobile is in fact a very different animal than the web and what consumers are still looking for and expecting [is] a very different experience.
For us @gummicube mobile loyalty and rewards centers around what consumers love to do on their devices downloading apps and enjoying bite sized moments of entertainment. we believe the trick to successful mobile loyalty programs is unlocking the content that users naturally want to download on their mobile phone to enhance their relationship with your brand or product. It makes sense that for points programs and pIn promotions via mobile the #1 item consumers might want to redeem are apps. It offers instant gratification and a mobile focused offer that satisfies.
DILIP DASwANI,
CEO at Zeebric, LLC
DAVID BELL,
Co-Founder at Gummicube, Inc.
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In my opinion, the loyalty future is obviously transforming it to mobile but this is not just loyalty. the main issue here is to create an interactive ecosystem mixing loyalty, buying, advertising and many other applications for consumers. everything will be done with the consumer smartphone.
PAUL MCDONALD,
Consultant, Payment and Solutions Provider
according to susan teltscher, an analyst with International telecommunication union, it turns out that these countries tend to be small, with lots of borders or numerous foreign workers and visitors who tend to buy local phones to use during their stay. united arab emerites currently holds the title of the most mobile phones per capita with 233 percent, followed closely by the tiny country of montenegro with 210 percent.
o which countries have the most mobile phones per capita?
MoBiLe aPPs & weBsites for LoYaLtY

44% report oFFerIng a mobIle app or websIte to aCCess theIr loyalty program
Clearly the u.s. and China rank high on the list, right? not even close. It turns out that there is plenty of room for growth in both cases. statistics from the Itu show that mobile phone penetration holds steady at 91 percent in the u.s. and only 56 percent in mainland China. what does this mean for mobile marketers? the potential for growth in this industry is incredible in these markets. the wise marketers will find ways to position themselves as leaders now so they fire on all cylinders as mobile phones become even more pervasive in the u.s. and China.
PAUL SqUIRES,
Director Innovative IDSpecialist ID & Visitor Management ts important to pay considerable attention to data analysis in developing a mobility strategy. This will ensure your investments make sense for your long-term plans and product roadmap before you engage in mobile tactics such as appifying all of your content and services. After all, having the content doesnt ensure that the consumer will engage with it in the mobile channel. Regardless of what channel you are using, focusing on usability and simplicity will facilitate experiences that your customers care about most, and engender their enduring loyalty to your brand. >See full article on page 46!
MIkE MCDONNELL,
Mike McDonnell, Vice President of Product Management and Client Solutions at Affinion Loyalty Group
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The Mobile loyalty User:

Behaviors begin to paint a portrait
mike mcdonnell
A f finion Loya l ty Grou p
Hear from Affinion Loyalty Group at the Loyalty Expo!

The session, Beyond Everyday Spend: New Techniques for Engendering Experiences and Engagement, will be presented by Adam Russell, Group Vice President, SunTrust Bank and Chuck Christianson, Group Vice PresidentSales & Strategy, Affinion Loyalty Group
n a recent report forecasting mobile growth, Cisco Systems, Inc. revealed an astounding statistic: the number of mobileconnected devices exceeded the number of people on earth by the end of 2012. By 2016, there will be over 10 billion mobileconnected devicesor 1.4 mobile devices per person on the planet.1
David Armano of Edelman Digital wrote a piece for the Harvard Business Review Blog Network that was titled The Future Isnt About Mobile, Its About Mobility. Armano accurately focuses on the context in which people interact with services while on the go versus just concentrating on the device. As we have reached the point at which there are more devices than people, we need to further understand the context of how people are interacting with their loyalty programs in this space. Users are relying more heavily on mobile devices to access their loyalty programs. Across all of our programs this year, we have seen a 167 percent increase in loyalty site visits from mobile devices as compared to 2011.
C
Cisco also estimates that, by 2016, mobile-connected tablets will generate almost as much traffic as the entire global mobile network did in 2012, 1.1 exabytes per month(1 billion gigabytes). In analyzing our clients loyalty programs, more than 60 percent of mobile visits are from tablets. And, no surprise from a brand perspective Apple devices dominate, with 82 percent of visits coming from iPads and iPhones. But some of the most interesting analysis comes from data revealing what mobile users are viewing while theyre on the sites. Mobile visits peak from 6p.m. to midnight; 38 percent of mobile visits occur at this time of day. A report by InsightsNow covering June to August of 2012 shows that more than two thirds of mobile phone use occurs in the home. Its easy to imagine this applying to many of the loyalty program mobile users. We see a slight uptick in the number of mobile visits on Wednesday and Thursday nights. Given the popularity of A Criminal Mind and Modern Family on Wednesdays and The Big Bang Theory, Two and a Half Men and Person of Interest on Thursdays (Nielsen rates these shows in the top 10 most viewed on network TV), our bet is that the average user could be home watching TV while checking out their loyalty program. Multi-tasking is certainly the norm in the tablet world. According to Nielsen, 26 percent of tablet owners in the United States use their tablet several times a day while watching TV. So, what are these users looking at on their loyalty program sites? Mobile users are nearly 14 percent more likely to view the product catalog, but nearly 28 percent less likely to view search results.
1
CM
MY
CY
CMY
Ciscos Visual Networking Index (VNI) Global Mobile Data Traffic Forecast Update, as reported by Sarah Perez, professional blogger for TechCrunch
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digital gift card options. But, hes not ready to pull the trigger-not And, they are 29 percent less likely than overall users to view the yet. He still has more browsing and thinking to do first, and maybe cart confirmation page. What does this tell us? The average mobile he needs to check with the decision maker in user is interested in browsing all By the the house. After all, some reports show that rewards and checking out the full . end rth women account for 85 percent of all consumer spectrum of whats available, instead of ea n purchases and that number climbs to of searching for a specific reward. 92 percent for vacation bookings. Considering And, since theyre not putting the portrait of Charles the mobile loyalty user, rewards into their cart, we can and forecasting that his interaction level will deduce that the average mobile user increase, there is value in deeper understandisnt redeeming their points from ing of the context in which your users interact mobile devices. They are in full-on in the mobile channel. surf and browse mode. Does this behavior stem from the design of the Its important to pay considerable attention to mobile user experience, or could it data analysis in developing a mobility strategy. have more to do with the users This will ensure your investments make sense multitasking surfing mindset? In the for your long-term plans and product roadrare case that the average mobile map before you engage in mobile tactics such user does redeem his points, it takes as appifying all of your content and services. him fewer visits to do so than the After all, having the content doesnt ensure average desktop surfer. Perhaps this that the consumer will engage with it in the shows that the user who is comfortmobile channel. Regardless of what channel able redeeming on his mobile device Source: Cisco Systems, Inc. you are using, focusing on usability and simplicity will facilitate knows what he wants; hes ready to make the purchase. experiences that your customers care about most, and engender
number of peop the le d o de
, the 12 20
number of m ob il
Source: Cisco Systems, Inc.
Of course, we dont want to make too many generalizations, but it can be helpful to envision one typical mobile user persona. Meet Charles, chuckling to himself, one eye on Modern Family, one eye on his iPad. Hes been thinking about the family spring break trip in 2013, so he starts browsing through travel rewards on his favorite credit cards loyalty site. He thinks, Hey, maybe there are TCS Corporate holiday gifts here too, so he checks out the plastic and some Ad 8.375inx5.3125+.125in_Retail2012_Marks.pdf 1 11/16/2012 9:23:42 AM
their enduring loyalty to your brand. L
As Vice President of Product Management and Client Solutions at Affinion Loyalty Group, Mike McDonnell is responsible for ensuring the company is building and supporting the right products and services to deliver on its mission of Converting Customers Into Fans.
CM
MY
CY
CMY
In a world of new rules and new opportunities, there is a way to be certain.
1 Ciscos Visual Networking Index (VNI) Global Mobile Data Traffic Forecast Update, as reported by Sarah Perez, professional blogger for TechCrunch.
e-
devices ected exc nn ee co
1/25/13 8:38 AM
BY THE NUMBERS
86% 81% 97% 65%
oF CoMpanies see customer experience management as a strategiC imperative. oF ConsuMers are Willing to paY more For a superior CustoMer experience. Can be influenced to maKe a purchase FroM a positive online experience. report an online experience Can Change their opinion oF your brand, produCt or serviCe.
OF CONSUMERS WANT QuicK access TO information AND easier ABILITY TO asK Questions
35% 26%
drivers to spend more with a brand

WANT OVERALL Website usabilitY AND SEARCH functionalitY
key
20% 32%
WANT A tailored and personalized SHOPPING experience
WANT AN easY return policY
how Youre measuring

customer satisfaction surveYs voice of the customer programs
75% 48%
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BY THE NUMBERS
THE MOST
ARE:
CoMMon CustoMer CoMpLaints
A NegAtive
Customer
experienCe
to a CoMpetitor
Of CONsuMERs
can drive 89%
yet onLy 4%
of CuStomer
service professionals
25 20 17
21% 20%
% long waitS, SuCh aS Store lineS, waiting for ShiPPed ProduCtS, etC. % laCk of Clear CommuniCation
top priority
Within the CoMpany
initiatives as a
ranK CustoMer serviCe
% errorS or inaCCuraCieS, like billing, PaymentS, etC.
CuStomer satisfaction
focus groups
technologY to measure or QuantifY customer needs, expectations, and/or satisfaction
Monetate. The Ultimate Customer Experience http://monetate.com/infographic/the-ultimate-customer-experience/#axzz2FRKodgM7 Loyatly360. ASQ. Managing customer expectations is biggest barrier to great service, ASQ data says http://loyalty360.org/resources/article/managing-customer-expectations-is-biggest-barrier-to-great-service-asq-data
reSourCeS: 81% of Shoppers Willing to Pay More for Better Customer Experience, Oracle Research Shows (Oracle - Why Customer Satisfaction is No Longer Good Enough) http://loyalty360.org/resources/article/81-of-shoppers-willing-to-pay-more-for-better-customer-experience-oracle-re Megan Burns. Forrester. April 24, 2012. The State Of Customer Experience, 2012. http://resources.moxiesoft.com/rs/moxiesoft/images/Forrester-The_State_Of_Customer_Experience_2012.pdf CMS Wire. [Infographic] Customer Experience Management in 2012 http://www.cmswire.com/cms/customer-experience/infographic-customer-experience-management-in-2012-018637.php
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effective financial ManageMent
of Evolving Loyalty Programs

Martin Mnard
Pricewater h ouseCooper s
John KrYCzKa
Pr icewater h ouseCooper s
L
50
oyalty rewards programs have grown in recent years, not only in industries with a longstanding history of rewards programs but also new ones. Companies launch these programs to increase sales and grow their underlying business, market a brand or product, increase customer retention, and improve their competitive position. In some industries, such as travel and hospitality, a rewards program can drive purchase decisions as much or more than the underlying product.
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As a loyalty rewards program matures, its annual expenses and accrued liability often quickly become significant relative to the program sponsors overall financials; accordingly, managements focus on the programs accrued liability and its financial implications also rapidly increases. Because small errors in the estimation of liabilities, which are immaterial early in a programs lifetime, can soon become large balance sheet errors, a program sponsor should proactively address the important financial issues facing the program in order to keep costs within expected budgets and accrued liability amounts under control (while, at the same time, keeping the program relevant to customers). Management must strike a delicate balance between the financial management of the program and the ability of the program to reach its strategic objectives. Leading program management teams use the liability and cost estimation tools at their disposal on an ongoing basis to assure the long-term success of the program.
sponsors often focus on enrollment statistics to determine if the program is on track to meet its original objectives. Enrollment results that fail to meet expectations may reflect overly ambitious goals or indicate that the program is not adequately compelling to customers. Regardless of the reason, enrollment that falls short of expectations eventually could result in less than anticipated revenue growth for the sponsoring company. On the other hand, a new program may be more popular than anticipated, which could place upward pressure on budgeted cost estimates and stress resources. Either way, management may need to implement program changes to re-align the program with the companys business objectives.
The loyalty program is too generous to certain members. Over time, a program sponsor collects large amounts of data on members redemption activities. Management should analyze this information to identify areas where the program may award excessive benefits (i.e., awards provide excessive value to certain members) and thereby would necessitate program changes. These loyAlty progrAMs in An evolving environMent changes could include raising point thresholds for awards Loyalty programs exist in many industries, from hospital- or introducing capacity-control procedures (e.g., limiting ity and airlines to retail and banking. Depending on the the number of award seats available on a plane) to contain goals and objectives of each program sponsor, these the ultimate cost per point redeemed. programs vary in their marketing objectives, points earning/reward redemption options, and program terms and conditions. In fact, the only limitation on the design of a loyalty program may be the imagination and creativity of the program sponsor! Despite the vast differences in program design, all programs have one common characteristic: they all change over time. In fact, over the last couple of years, some significant loyalty programs in the airline and hotel industries have re-launched. For example, in March 2011, the Southwest Airlines rewards program changed from a credits based program to a points based program. This change could spur program changes by other key players in the travel industry. Program redesigns often result from the original program not having the desired impact on revenues or on customer incentives. Program results may be falling short of managements expectations, or competitors also may have redesigned their own programs. Below are examples of situations which have driven recent changes:
Management must strike a delicate balance between the financial management of the program and the ability of the program to reach its strategic objectives.
Some loyalty programs are making innovative changes and causing competitors to react. Fierce competition exists among loyalty programs within certain industriesin particular, hotels and airlinesand these The loyalty program does not meet established reve- programs often compete for a larger wallet share of the nue-lifting objectives. The typical objective of a loyalty same customers. The large number of existing programs program is to stimulate customer loyalty and generate exacerbates the competitiveness in these industries. The additional revenue for the sponsoring company. Program programs vie for consumers through innovations, such as sponsors can measure the lift in revenue from a loyalty the introduction of more relevant reward options, an program by using internal customer metrics, and esti- increase in the perceived currency value of a program, or mate a programs profitability by netting the cost of bonus or promotional offers. Changes, such as bonus launching and maintaining the program from the incre- campaigns, often are temporary and may not necessitate mental revenue it generates. A program sponsor should a response from competitors, but the significance at other react quickly when a program does not produce expected times of, for example, the introduction of a new co-branded results because any delay in responding can create a credit card, can alter the competitive landscape. Substansignificant drain on the companys overall financial results. tial, permanent changes may warrant a review from Loyalty program enrollment lags behind or exceeds management to help ensure that key customers continue managements expectations. The popularity of a rewards to view the program favorably in order to preserve (or program is difficult to estimate prior to its launch, and its increase) market share.
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Financial Management of Loyalty ProgramsM n a r d & K r Y C z K a , (continued)

Regardless of the specific impetus for significant program changes, management should consider the financial impact of such changes by asking the following questions: How will the changes impact the accrued liability and future accruals? Will the changes help or hinder our ability to achieve revenue and market share objectives?
finAnciAl Aspects of progrAM chAnges As management considers modifying its loyalty program(s), its focus will quickly shift to financial implications, with accrued liability in the forefront. Estimating a programs liability involves projecting the probability, timing, and cost of award redemptions using the following basic formula:
eStimated ultimate redemption rate (%)
pointS outStanding (#)
redemption CoSt per point ($)
reWardS program liability ($)
The estimate of the ultimate redemption rate (URR) generally results from sophisticated actuarial or statistical modelling techniques. The estimates of both the URR and the redemption cost per point consider a programs historical reward redemption information adjusted for future expectations, such as behavioral trends and cost inflation. The number of points outstanding represents the points that program members have earned but not yet redeemed (or have expired or been forfeited or cancelled). The questions management should ask about the financial impact of significant program changes translates into the following questions from a modelling perspective: How will the program changes affect the URR? How will the program changes affect the future cost per point? As we show in the diagram below, the changes to a rewards program directly affect accrued liability and overall program profitability:
Tightening terms and conditions (including introduction of points expiration dates) and enforcement of existing rules. incentivizing customers toward redeeming lower cost awards. enroling more active program participants to increase revenue, from purchases that earn rewards, relative to redemption costs.
Removing award expirations or reinstating forfeited points. increased value of awards options. increase the amount and frequency of bonus awards and promotions, which may lead to temporary members who join to earn and redeem awards and then leave the program.
To answer the URR and redemption cost questions, management should develop a solid framework to scenario test critical assumptions and evaluate the financial implications of proposed program changes. This approach should involve gathering input from key management personnel in various functional areas, including marketing and finance, to facilitate the estimation of the impact of the various changes under consideration. Customer surveys and focus groups can provide insights into members anticipated reactions, and predictive modelling analysis of members historical earning and redemption patterns can help anticipate potential behavioral changes. Management should develop a good understanding of the range of plausible outcomes on the underlying business resulting from changes in its loyalty program. By understanding the implications of the changes to its URR and redemption costs, management can make an educated decision about their impact and feasibility. This modeling will provide management with a baseline estimate which it can adjust based on the emergence of actual changes in rewards redemption experience.
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Modifying a program should focus not only on cost reduction or minimizing the accrued liability, but also on the changes internal and external strategic impact. Too often, the promise of immediate savings drives decisions instead of a full evaluation of the decisions long-term impact on the programs framework. Management should continually evaluate the overall return the program generates, (the difference between incremental revenue and ongoing operating costs), as well as discuss any upcoming rewards program changes with its program partners in order to protect these key relationships. Accounting consequences of chAnging progrAMs Under US GAAP, two dominant accounting approaches have emerged to recognize and measure loyalty program revenues and costs. The cost/provision approach views awards as a marketing expense; accordingly, a company immediately recognizes the full
currently in development) addresses rewards programs and, as currently written, indicates a deferred revenue approach, effectively converging US GAAP guidance with current IFRIC 13 guidelines. conclusion Loyalty program managers too often continue to rely on outdated internal models as the basis of the financial management of a rewards program. Because loyalty programs evolve over time, estimation models should not be static. The most sophisticated loyalty program management teams recognize the importance of applying state of the art models to estimate program liabilities. The use of cutting edge models enables program managers not only to better understand customer behaviours (which helps them identify the levers that modify these behaviors) but also to maintain a financially strong program that generates a positive return to shareholders.
A thorough understanding of the current accounting treatment a company uses is critical to effectively address the financial management issues that implementing significant program changes can create.
payment received from the customer as revenue in the period when the points are earned, while simultaneously recording a program liability for the internal cost associated with the future obligation to its customers. The deferred revenue approach views the issuance of points as a separate component of a sale, so a company defers recognition of the portion of its revenue which directly relates to the earning of loyalty points (i.e., unearned program revenue) to a future period in which the customer either redeems the points or the points expire. A thorough understanding of the current accounting treatment a company uses is critical to effectively address the financial management issues that implementing significant program changes can create. The implementation of changes to a loyalty program generally will have a direct impact on the liability a program sponsor books under either accounting approach, and the company should quantify the impact in future financial statements. US GAAP has offered little specific, authoritative guidance on the accounting treatment of rewards programs; as a result, widely divergent accounting practices for booking the associated liabilities have emerged. However, for companies located in countries which have implemented International Financial Reporting Standards (IFRS), there is more definitive guidance. Specifically, IFRIC 13, which is the relevant IFRS standard for loyalty program liabilities, essentially requires a deferred revenue approach with costs at market value. The Topic 605 revenue recognition exposure draft (which is Loyalty program managers struggle to balance the competing objectives of maintaining program profitability and program appeal. While the temptation may be for management to reduce member benefits when funds are tight, that may not be an ideal long-term solution. In short, modifying a program has far-reaching implications beyond reducing costs or the accrued liability, and management should consider the value of a loyalty program to its members to achieve its signature goal: maintaining (or increasing!) customer loyalty. L
Martin Mnard is a director with PricewaterhouseCoopers US Property and Casualty Actuarial & Insurance Management Solutions (AIMS) practice. He is the U.S. actuarial co-leader for loyalty programs reviews for PwC. John Kryczka is managing director with PricewaterhouseCoopers US Property and Casualty Actuarial & Insurance Management Solutions (AIMS) practice. He is the U.S. actuarial leader for loyalty programs reviews.
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capturing the value of a liKe

nEil EVErEtt
SoCial mediaS direCt effeCt on higher SaleS
LoyaltyOne
Marketers have invested Millions of dollars in gaining social Media followers, yet few have had Much luck following the sales that result. the speed and breadth with which social Media platforMs have grown has Made it too challenging to correlate the value of a like with a specific transaction.
hat figure may still be elusive. But we do now have an idea of what a social media message, combined with loyalty marketing, translates to in improved sales and its in the double digits. Recent research by LoyaltyOne, conducted with The University of Western Ontarios Ivey School of Business and Northwestern University in Chicago, delivers hard evidence that consumers who interact with a brand through social media do spend more with that brand immediately and in the long term. Further, the research shows that a loyalty program is an excellent means of achieving this measurement. The findings are based on a two-year analysis of social media engagement and actual transactional data among the more than 10 million members of the AIR MILES Reward Program, one of the largest coalition loyalty programs in the world.
The implications are especially encouraging for organizations that have long wondered if their social media investments are paying off. Today, with so many brands competing for the consumers limited attention, making that connection is critical to sustained growth. But translating those social interactions to actual sales depends largely on the long-term strategic mission and actually achieving co-creation interactions. Such interactions occur when consumers, responding to
In that period, from 2009 to 2011, researchers monitored participation in an AIR MILES social community website. AIR MILES collectors were encouraged to engage with the site by sharing their thoughts about the brand or participating in promotions. They then were rewarded with either a small number of bonus miles or entry into a lottery for large prizes (see sidebar). What the analysis shows is that AIR MILES members who participated in these social media events and promotions increased their purchases among AIR MILES partners by 15 to 30 percent over non-participants.
social media is a powerful, expanding channel that should be used to encourage participation in contests, games, causes and other activities that reinforce the brands value among consumers.
a brand on a social media platform, influence not only others but also themselves. The logic is that by interacting with a brand through a contest or other prompt, the consumer is reminded of the brand benefits, and feels more strongly about it.
LOYALTY ONE WILL BE EXHIBITING AT THE 6TH ANNUAL LOYALTY EXPO!
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air miles reWard program case studY: When hellos lead to Good Buys
The saying goes that you cant buy love. But we had a hunch that likes can lead to buys. So from February 2009 to May of 2011, LoyaltyOne partnered with researchers from The University of Western Ontarios Ivey School of Business and Northwestern University in Chicago to capture that value. The test site was an AIR MILES Reward Program social community website. AIR MILES is one of the largest coalition loyalty programs in the world, with 10 million members. Some 70 percent of Canadian households actively collect and redeem reward miles across the programs more than 220 partners and global online brands. As part of its suite of services, AIR MILES hosts a social community website where members share tips and discuss AIR MILES and other topics. For the study, researchers combined twoand-a-half years of social media interactions with actual transaction data (member Identification was disguised and protected). Specifically, they measured the effect of activity surrounding three AIR MILES events: a block party, a cruise contest, and a winter event. Each of the activities encouraged social media participation in return for a small number of bonus reward miles or a chance to win a large prize in a lottery. In total, more than 99,000 unique posts were analyzed. The researchers gauged the nature of participation on the AIR MILES site and then measured the value of correlating purchases, if any, from the different forms of participation. This activity was monitored among a large sample of participants and a control group of non-participants. The results: Participants on average increased spending by 15 to 30 percent. Again, the caveat to realizing such consumer engagement is through co-creation in the interaction. Our research shows that consumers who are socially engaged in a brand not only to inspire others, but also themselves. This kind of engagement reminds the consumers of the value of the brand, and further reinforces the brand connection.
here are a few other highlights of the study:
The simple act of writing a short public statement on a social media site spurs significant lifts in transaction activity Longer, more elaborate posts about redemption experiences (such as through hospitality or entertainment) created higher lift than shorter, product-based posts The biggest lift created through social media engagement is found in high-potential customers who are not yet fully engaged with the brand Importantly, a loyalty program is among the most effective sources available for linking the unstructured data of social media activity with both pre- and post-transaction behavior. By simply setting up a community page, blog or other proprietary social media site, organizations can register customers through their loyalty membership numbers. Even third-party platforms such as Twitter and Facebook can be used to link back to proprietary member tracking.
Lastly, our research shows that the biggest mistake marketers can make is using social media strictly as a means of communication. Social media is a powerful, expanding channel that should be used to encourage participation in contests, games, causes and other activities that reinforce the brands value among consumers. This is the kind of brand engagement that drives subsequent transactions. These findings are just the beginning of learning what opportunities social media presents when partnered with loyalty program data. By partnering the two, brands can create new forms of engagement and uniquely relevant experiences that profit both the consumer and the brand. L
Neil Everett is Senior Vice-President and Chief Marketing Officer of LoyaltyOne.
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2013
theres still time to be a part of this landmark event!

as an extension of learning at the 6th annual loyalty expo we invite attendees to join our sponsors in the exhibit hall. Our sponsors and exhibitors compliment the show agenda, adding to the insights shared during the sessions, roundtables, and workshops to share with you their expertise and address your questions on industry strategies, leading technologies and services. Continue the conversation with our sponsors and exhibitors
MARCH 20 - 22, 2013 | RENAIssANCE ORlANdO At sEA WORld | ORlANdO, flORIdA | lOYAltYExPO.COM
suPPOrtING
exhIbItING
wOrkshOP
customer intelligence made easy a step by step methodology to building profitable customer relationships
presenters: connie hill, president & founder and david resnick, vice president technology solutions -veracentra
this workshop will provide you with a simple yet powerful methodology to define and implement customer intelligence. you will learn a proven approach that will empower you to define your own specifications for customer intelligence. this step by step guide is designed to bust through common challenges and will enable you to utilize data to your best advantage quickly and effectively.
1/24/13 11:35 AM
we're here to guide you along the way.
loyalty is a journey.
Looking to build your organization's engagement and loyalty strategies? Loyalty 360 makes it easy to find a partner with the capabilities to help you reach your goals. Want to be a part of the largest engagement and loyalty supplier directory? For only $2500/year, sign up to be listed with your own customizable member page. Find tools, tips, and connect with your peers to find the answers to your loyalty questions at loyalty360.org
1/24/13 11:35 AM
LeveLing Up LoyaLty >>

How Companies Use GamifiCation to engage ConsUmers
R a j at Pa h a R i a
Bu n c h b a l l
Like castaways bobbing in an ocean of digital content, consumers are adrift in a sea of endless choices. they can go anywhere. and as readers of this magazine know too well, they often do. this may explain why 58 percent of brands expect to spend more on customer retention this year and next, according to acxiom. and because marketers cite differentiation as their biggest loyalty program challenge (forrester research), we can expect a lot of that money to be invested in creating unique loyalty programs.
But simply spending more may not deliver the results marketers are looking for. I recently hosted a customer engagement webinar with R. Ray Wang of Constellation Research. Ray pointed out that engagement requires the participation of two parties: the customer and the brand. The more they interact in ways that are valuable to one another, the stronger their relationship. For websites, online services and applications, delivering high-value interactions requires a deep understanding of the behaviors, motivations and preferences of every customer. That understanding can fuel a loyalty experience that engages each customer personally. Whats more, it can help create a loyalty program that doesnt look, feel or act like all the rest. In a digital world where we are all at risk of subjecting consumers to channel fatiguean overload of communications, emails, tweets or posts that may erode our efforts to build loyaltydelivering a personalized loyalty experience is something of a holy grail. Companies of all kinds are building that experience around gamification. Gamifying online experiences creates long-term stickiness by introducing the dynamics of competition and achievement through the use of goal-setting, real-time feedback, competition, status and recognition. These dynamics speak to fundamental drivers that exist in all of us, and they encourage users to consume, share and comment in ways that reinforce brands, products and services. While mechanics such as points, badges, leaderboards, missions, levels and rewards are common across different gamified environments, the experiences themselves can be completely unique.
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Here are tHree very different examples of How organizations are engaging users and building loyalty witH gamification.
1 Terra Global, a leading global digital media
company, has gamified online portals that provide news, entertainment and sports content to more than 100 million people in 19 countries across the Americas and Europe. The goal is to build loyalty among young consumers who connect and share with peers via social networks like Facebook. So Terra Global launched MyBadges, a youth-oriented gamification experience. Through MyBadges, Terra Global encourages sports fans to sign in via Facebook and then rewards them for watching videos, reading articles and posting comments about soccer, F-1 racing and tennis. In the first three weeks after gamifying its portals, Terra Global saw its registrations jump from 1 million to 3 million.
In the first three weeks after gamifying its portals, Terra Global saw its registrations jump from 1 million to 3 million.
2 CrowdFlower, the leading micro-task
crowdsourcing platform, launched a worker motivation program aimed at improving quality and satisfaction of its online workforce of more than 3.5 million workers. CrowdFlower gamified the dashboard used by contributors who are hired to solve a problem or complete a microtask. Through the use of points, badges and levels, CrowdFlower encourages and rewards superior work. And by tracking badges earned by top contributors, CrowdFlower can offer better workers higher paying projectsa reward both for workers and for CrowdFlowers hiring partners. Our contributors, reports CrowdFlower CEO Lukas Biewald, tell us they love the experience.
3 Think Through Learning, Inc. an education technology
innovator, has relied on game mechanics to enhance its uniquely personalized and motivational approach to teaching mathematics at thinkthroughmath.com. Using missions, challenges, levels and rewards, Think Through Learning motivates students to complete their lesson pathways, and creates a sense of achievement for students throughout their learning experience. This gamified learning environment infuses the task of acquiring math skills with the thrill of achievement, recognition and reward.
tHese are tHree recent examples among Hundreds. automakers, tv networks, consumer goods companies, fasHion labels, retailers, tecH companiestHeyre all using gamification to create differentiated loyalty programs tHat engage customers and keep tHem engaged.
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Leveling Up Loyaltyr a J a t p a h a r i a , (continued)
six Best practices for BeGinners

for marketers interested in exploring their own gamification effort, its worth paying attention to a few best practices developed over years of successful gamification deployments. Heres a half dozen to get you started.
1. Pursue your business goals, but dont leave users behind. Begin with the end in mindwhat you want from the gamification experience but always keep users front and center. Everything you are creating ties back to your customers, your prospects and your users. Designing everything around their goals, motivations and interests will set you up for success. 2. It takes a village. Two key elements of gamification are sharing and competition. That means customers must be aware that there are others along for the loyalty ride, that theyre part of an online community. The rare exception is in areas like banking, where privacy trumps community.
3. To measure your success, assign value to the actions you want users to take. A standard ranking system lets you decide how valuable various actionsregistering, watching a video, completing a profileare to your loyalty program. Start with the least valuable action and give it a value of 1x, then work from there. This provides a structure for user actions that you can use to measure your success. 4. Make badges make sense. Badges and trophies are virtual rewards and indicators of achievement. They should be visually appealing and should tie directly into your business goals and to what users care about and are proud of. As a game mechanic, they deepen engagement with users and encourage users to move forward. Make it easy for users to attain a badge early on (for instance, award a badge just for signing up), but make them progressively more difficult to earn.
aCtions reGister ConneCt watCH video sHare watCH sLidesHow CompLete profiLe UpLoad video Comment
reLative vaLUe 10x 9x 8x 8x 5x 4x 3x 1x
5. Build in features that drive desired behaviors. A good gamification platform will give you the ability to incorporate newsfeeds and leaderboards, let users collaborate and compete within groups or teams, and reward or even sell virtual goods. When these features dovetail with your business goals and the interests of your customers, theyll help you make a success of gamification. 6. Create a wall-to-wall loyalty program. From websites to mobile apps to social networks, your gamification experience can touch consumers everywhere they go. For instance, users can log into a gamified experience from Facebook or advance within a mission using the gamification features added to your mobile app. L
done rigHt, gamification can deLiver some astoUnding resULts. a sampLing of companies ive worked witH Have seen a 229 percent rise in page views, a 163 percent increase in retained aUdience, and a 175 percent boost in totaL engagement as measUred by activities per User. tHese companies werent wiLLing to set tHeir cUstomers adrift in tHat ocean of endLess cHoices, onLy to be LUred by tHe siren song of competitors. tHeyre gamifying tHeir LoyaLty and engagement efforts, and tHeyre winning as a resULt.
Widely recognized as the father of gamification, Rajat Paharia founded Bunchball in 2005. Since then, he has parlayed his unique understanding of technology and designalong with a preternatural ability to recognize patternsinto the creation of a company whose market-defining solutions have helped engage customers and motivate employees.
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LOYALTY FORUM: BOOKS
Loyalty Reads
The Customer Rules: The 39 Essential Rules for Delivering Sensational Service
Lee Cockerell
Crown Business | March 2013
The former EVP of Walt Disney World shares indispensible Rules for serving customers with consistency, efficiency, creativity, sincerity, and excellence. Lee Cockerell knows that success in businessany businessdepends upon winning and keeping customers.
In 39 digestible, bite-sized chapters, Lee shares everything he has learned in his 40+ year career in the hospitality industry about creating an environment that keeps And they have been proven indispensible at all levels of a customers coming back for more. Here, Lee not only company, from managers responsible for hiring and trainshows why the customer always rules, but also the rules ing employees, setting policies and procedures, and shapfor serving customers so well theyll never want to do busi- ing the company culture to front line staff who deal directly ness with anyone but you. For example: with clients and customers Rule #1: Customer Service Is Not a Department Chock-full of universal advice, applicable online and off, The Customer Rules is the essential handbook for Rule #3: Great Service Follows the Laws of Gravity service excellence everywhere. Rule #5: Ask Yourself What Would Mom Do? Rule #19: Be a Copycat The Customer Rules is easy to read and understand, Rule #25: Treat Every Customer like a Regular but profound in so many ways! If companies and Rule #39: Dont Try Too Hard
As simple as they are profound, these principles have been shown to work in companies as large as Disney and as small as a local coffee shop; from businesses selling cutting-edge technologies like computer tablets to those selling products as timeless as shoes and handbags; at corporations as long-standing as Ford Motors and those as nascent as a brand new start-up.
leaders would follow this advice their customers and business would be significantly better. Al Weiss, President, Disney Parks and Resorts, Worldwide (Retired)
The Two-Second Advantage: how we Succeed by Anticipating the Future Just Enough
Vivek Ranadiv and Kevin Maney
Crown Business | September 2011
Customer 3D: A New Dimension for Customers

Bill Self
CustomerEDU, LLC | June 2012
In a powerful narrative that takes us from the research in the labs to the implementation of predictive technology inside companies, The Two-Second Advantage reveals how our understanding of human mastery is being applied to the way computers think. In the near future, the most advanced computer systems and the most successful businesses will anticipate the future. As a result, companies will be able to use a new generation of technology to anticipate customer needs before customers even know what they want, and see production snafus before they occur, traffic jams before they materialize, and operational problems before they arise. Forwardthinking companies will be able to predict the future just a fraction ahead of everyone else with a little bit of the right information at the right timewhat the authors call the two-second advantage. It will transform the way businesses are run and offer companies an enormous competitive edge in the marketplace.
A new style of leadership is emerging, one that resonates deeply with customers and leads to stronger customer loyalty. It is revolutionary and sets the organizations that practice it far above the average players in the eyes of their customers. In addition, it is more sustainable because it is a unifying force for all activities within the corporate culture. The traditional explanations of customer service and competitive behavior are proving inadequate. Instead, a strategy that embraces the Customer 3D system is moving organizations beyond product-centricity to customer-centricity. A rebirth of business spirit and high purpose is underway. High-performing companies are transforming their cultures by focusing on customer-centricity (needs) and a new energy is emerging in their internal organizations. This expansive thinking manifests itself in greater innovation, empowerment and freedom for employees and positive economics from a premium position in the markets served. Because it is unique, it creates an attraction for customers that ask Why would I go anywhere else? The Customer 3D approach takes organizations to a new dimension of working with customers. It is driven by proactive design that is natural and flexible. It is creating powerful customer connections, based on a future that does not accept the status quo. And it is sustainable because it has a built-in adaptability that replaces silos with responsiveness to the success of the customer.
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The Loyalty Myth

Clive Humby and Edwina Dunn
Kogan Page | January 2013
The book touches on many aspects of customer loyalty and relationship management including: knowing There are exceptions, such as sports teams and their customers and understanding their retail DNA, engagardent supporters. Some brands like Harley Davidson ing with customers, creating a great shopping experience, even define an entire liferelevant marketing, meanTruly understanding customers and putting style, and truly innovative ingful innovation and being them first is the key to sustained business brands such as Apple also loyal to customers. success for retailers, manufacturers, inspire real fans who await Engaging and insightful, suppliers and brand owners. their latest offering. But for The Loyalty Myth proves, the most part, customers through the results of these highly successful global make rational decisions based on their needs, wants and brands, that truly understanding customers and putting desires and customer loyalty is incredibly rare. them first is the key to sustained business success for Following up on the international success of Scoring retailers, manufacturers, suppliers and brand owners. Points -the real-life story of how the Tesco loyalty Club- Dunn and Humbys is a new concept of loyaltythe card was conceived, launched and developed- loyalty of companies to the idea of putting the customer Clive Humby and co-author Edwina Dunn now move to a first. Success-they say-is about using the data to make multi-brand story which includes insights from work with your business as relevant as possible to your customers.
Loyalty is a much-abused word in marketing. While many companies achieve that much-vaunted goal of customer loyalty, the vast majority of brands do not engender true loyalty among their customers.
Kroger, Macys, Monoprix, Tesco and Tesco International, Metro and others.
Fast Shopper, Slow Store: A Guide to Courting and Capturing the Mobile Consumer
Gary Schwartz
Atria Books | September 2012
From Best Buy to Borders, retail stores are closing their doors forever. Increasingly consumers are looking to their mobile devices as the primary screen to find best products and the cheapest deals. The shop has lost its connection to this shopper. Gary Schwartz has been at the front lines of the mobile industry for over a decade, and this book is about what companies can do to build the mobile tools necessary to reestablish a relationship with their mobile shoppers. Rich with examplesfrom Amazon to Barnes & Noble to GoogleFast Shopper, Slow Store provides a step-by-step approach to harnessing and executing the strategies necessary for companies to move into the mobile sphereand see lasting, lucrative results.
Face2Face: Using Facebook, Twitter, and Other Social Media Tools to Create Great Customer Connections
David Lee King
CyberAge Books | September 2012
These days, if a business isnt searchable via Facebook or Twitter, it raises the questionis it a real company? Social media has become an invaluable tool in business branding but having an online presence is only the start. Any company can blog and join the array of social networksits the companies that understand how to interact with their customers online that create long-lasting consumer impressions. Face2Face: Using Facebook, Twitter, and Other Social Media Tools to Create Great Customer Connections, by David Lee King, emerging technologies and social media expert, is a new book designed to help small business owners and entrepreneurs understand what it takes to make their company human and approachable via social networks. From mastering casual and authentic conversation to learning how to listen to customers, King empowers professionals to create online strategy that works for them and their audience.
King maps out a plan of action in Face2Face that any small business owner can adapt to create their own social media strategy. He explains how to engage customers in meaningful conversation by listening to and commenting on ongoing discussions, utilize visual social media tools to let customers see your company, how to use specific tools and functions on blogs, Facebook, and Twitter, and provides tips to tactfully address negative criticism. Most importantly, King has written Face2Face in a way that educates and empowers individuals to create strategy that they can implement tomorrow.
Any company can blog and join the array of social networksits the companies that understand how to interact with their customers online that create long-lasting consumer impressions.
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Brown
GreGory D
Vice President, LoyaLty, Promotion & relationshiP marketing, ChoiCe hoteLs Greg oversees the consumer marketing strategy for Choice Hotels, a leading hotel franchisor with 6,200 hotels worldwide. His principle focus is on global growth of Choice privileges, the comprehensive, award-winning rewards program for Choice Hotels, which has tripled membership to over 16 million in the past 5 years. We invite you to get to know a bit about the man Behind the Brand
in 2013, What Will be KeY areas of focus for choice hotels and the choice privileges program? Key word for both Choice Hotels and our loyalty program is growth in 2013. We expect to add hundreds of new hotels to our system, and will add 2 million more new members to our rewards program.
is Your existing customer strategY focused more heavilY on acQuisition or retention? WhY is this the most valuable approach at this time?
More fair to say acquisition, but retention is a very close second. We got a late start on our loyalty marketing program more than 15 years after most of our competitors. So we have been playing catch up for some time. Having tripled our membership over the last five years, we are now increasingly focused on retention. What is on Your Wish list for tactics, tools or technologies You Would liKe to see incorporated into Your customer relationship strategY? We are developing the technical infrastructure to enable Choice to be significantly more personalized in our relationship marketing efforts. It has been in the works for some time, and will be a tremendous step up that will open up several new engagement strategies.
The electronic world is so impersonal that it is refreshing to have genuine interactions with people.
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QuicK fire Questions*

what iS your favorite word? birdie what iS your leaSt favorite word? what turnS you on Creatively, SPiritually, or emotionally? cant
travel
what turnS you off?
sloWness
what iS your favorite (Pg-13) CurSe word?
fuuu-ortunatelY
what Sound or noiSe do you love?
basKetball sWish
what Sound or noiSe do you hate? what ProfeSSion other than your own would you like to attemPt? what ProfeSSion would you not like to do? if heaven exiStS, what would you like to hear when you arrive?
golf ball hitting a tree
laWYer
pediatrician
sure tooK You long enough to get here!
*inspired by James lipton on inside the actors Studio we asked gregory to share his quick fire response to the questions originating from the french series, bouillon de Culture hosted by bernard Pivot.
1 2 3 4 5 6 7 8 9 10
What do You believe is KeY in creating the ultimate customer experience? Making real, personal connections showing the customer that you think they are important. The electronic world is so impersonal that it is refreshing to have genuine interactions with people. What should marKeters todaY offer to differentiate their customer experience from competitors? We know so much about our customers, and we should seek to apply that insight to make the customer experience more engaging, especially when trying to recover from a service misstep.
We expect to add hundreds of new hotels to our system, and will add two million more new members to our rewards program
hoW does (or should) customer effort considerations Weigh in on planning an engagement or loYaltY strategY? WhY? Consumers are in information overload today, and simply dont have the time to digest everything. Adding to the information overload with complexity or extra steps will only work for the most engaged customers. To capture the important consumers that are somewhat engaged, you need to calibrate the effort to be worth the reward.
What great marKeting idea do You Wish You had What Would You liKe to see change in the come up With first? marKets approach to the customer experience, Meta-search engines, which to me are an efficient way LOYALTY ONE WILL BE EXHIBITING AT THE 6TH ANNUAL LOYALTY EXPO! engagement and loYaltY? to navigate through the information overload. More relevancy in content. I see way too many direct mail and email communications that ignore what I know they What are You most proud of in Your career? know about me or are too generic to be of any value. While I work very hard when at work and have enjoyed a fulfilling career to date, I am proud that I have maintained a strong family life outside of work. What Was Your last ah-ha customer experience? What is Your personal motto? I was recently upgraded on a flight after the flight attendant YOLO [You Only Live Once]. saw me give up my seat so a family could sit together. Was a nice gesture on her part and made me feel like the airline cared about its customers. Who Would plaY You in the film of Your life? Perhaps Brad Pitt, since we are both from Missouri. My wife suggests Chris Hemsworth, but I think she has an ulterior motive. Who is the most famous person You have ever met? Tony LaRussa.
GREG WILL BE SPEAKING AT THE 2013 LOYALTY EXPO!
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Behind the Brandg r E g o r Y B r o w n , C h o i C E h o t E l s (continued)
What famous person Would You most liKe to meet? WhY? Claude Monet, because I love his impressionist paintings and have seen much of his work in museums around the world. What booK(s) are You currentlY recommending? Tony LaRussas, One Last Strike (I am a huge St. Louis Cardinals fan). are You a rule breaKer or a rule Keeper? WhY? Rule keeper. Most rules are good rules, so not good to break. if You could invite 4 people to dinner (past or present) Who Would theY be and WhY? David Feherty (funniest guy ever), Claude Monet (want to hear what he was thinking when he painted), Charles Schultz (Charlie Brown and Snoopy!), and Tyra Banks (hey, she is going to Harvard School of Business). Who (or What) inspires You? Overachievers, people who do more than is expected. Who (or What) has had the greatest influence on Your career? Early on in my career, I had some great mentors from which I absorbed clever ways to approach problem solving. defining life moment? April 18, 1992 the day I married my wife. do You (or Would You) liKe to volunteer? What organizations or causes are You most passionate about? Our company supports Rebuilding Together and I have enjoyed working on several houses these past few years. Our family also supports the Grassroots Crisis Center in Maryland. Words of advice for the novice marKeter? Model what you believe will happen in advance, and then measure performance against your projections. L
I had some great mentors from which I absorbed clever ways to approach problem solving.
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4120 Dumont St Cincinnati, OH 45226
Dont miss this years expo!

thereS Still time to regiSter!
loyaltyexpo.Com
the customer loyalty event that connects you with marketer peers.
Learn from market thought leaders. hear industry success stories from todays most
innovative brands.
netWork during exhibit Hall events. extend your learning in the exhibit hall; meet
people whos organizations can help you reach your customer loyalty goals.
engage through the expos ever-popular Marketer exclusive Peer round-tables.

discuss your challenges and discover new ideas.
March 20 - 22, 2013 | Renaissance Orlando at Sea World | Orlando, Florida | loyaltyexpo.com
1/24/13 11:35 AM

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l o ya lt y e x p o 2 0 1 3

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