Loyalty Management 1st Quarter 2012 Issue

Volume 4 Number 1
January 2012 powered by Loyalty 360
Strengthening Customer Relationships through Loyalty Programs
Loyalty Expo 2012 Preview

2012 Trends Executive Predictions Case Study - The Power of Information for Costa Coffee
Who Do You Love? Heating Up the Relationship with High-Value Customers
Does your loyalty program neeD an upgrade?

Theres something for everyone at Best Buy. Thats one reason why Reward Zone Incentive Points is such a terrific way to attract, motivate and thank customers. By adding the power of Reward Zone points to your program, youre giving your customers the chance to receive awards that they know are more attainable, versatile and useable than most others. And thats good for business.
Alex <999-555-0101>
Alex:
Guess who just got an awesome new smartphone!?!?!
Chris:
Um, you? ;)
Alex:
YESS!!
Type to compose
INCENTIVE POINTS
Visit rewardZoneIncentivepoints.com/360 to learn more.
INCENTIVE POINTS
Loyalty Management LOYALTY360.ORG 2012 BBY Solutions, Inc.
This Month in
JANUARY 2012 VOLUME 4 NUMBER 1 WWW.LOYALTY360.ORG
FEATURES
22
Winning Millennial Consumers with Collaboration
Melanie Shreffler, Ypulse
24
How Luxury Brands Can Reinvent the Customer Experience
Mark Robeson, VIPdesk
28
32
36
Case Study: The Power of Information for Costa Coffee
Bryan Wang, Givex
Strengthening The Impact Customer of Employee Relationships Engagement through Loyalty on Healthcare Programs Organizations
Sutowo (), Deloitte Analytics South East Asia Tricia Mikolai, BI WORLDWIDE
LOYALTY FORUM: IN EVERY ISSUE

Whats on Loyalty360.org Letter from the Editor Contributors Your Voice Behind the Brand Jonathan Clarkson, Southwest Airlines 360 Insights: Customer Retention & Engagement Remain Top Challenges for 2012 Mark Johnson, Loyalty 360 Q & A: Ask the Experts In 2012 we are looking to integrate our social media efforts with our loyalty platform. We have several thousand followers and fans on Twitter and Facebook; how do I recognize and reward my best customers in the social space? Loyalty Innovation By the Numbers Loyalty Reads Behind the Brand Zain Raj, SolutionSet 6 8 10 12 14 18 20
38 50 58 66
Loyalty Management JANUARY 2012
YOUR BUSINESS RESULTS DELIVERED OUR INSIGHT
We see relationships di erently. Visit us to learn more.

Loyalty Management LOYALTY360.ORG
aimia.com
This Month in
JANUARY 2012 VOLUME 4 NUMBER 1 WWW.LOYALTY360.ORG
TECHNOLOGY, TRENDS & REWARDS

42 The Inside Scoop: MyLowe's Loyalty 360 interview with Lowe's Home Improvement 44 It Pays to Go Mobile SEO Michael Martin, Covario 46 Driving Digital Donations Q&A with Robert Carroll, SDL & Dustin Hardage, Compassion International 48 The Basic Elements of Customer Engagement: Location, Location and Location John Orlando, Sixth Sense Media
BEST BUSINESS PRACTICES

52 The Inside Scoop: Whataburger Q&A with Rich Scheffler, Whataburger Restaurants 54 Case Study: Who Do You Love? Heating Up the Relationship with High-Value Customers Kathleen Diamonon, The Turning Point Group & Pam Lockard, DMN3 56 Bing: Search, Engage, Rewards Loyalty 360 Interview with Bing 60 Sprint Loyalty & Engagement Q&A with Melinda Parks & Kim Whitehead, Sprint 62 The Inside Scoop: Taking Customer Relationships to a Higher Level Seth Hall, Philadelphia Insurance Companies
Loyalty Management Editorial & Production Team Erin Raese - Editor in Chief Mark Johnson - Contributing Editor Caitlin Schar - Editorial Director Kathleen Ostoich - Graphic Designer Crescent Printing Company - Print Production Loyalty 360 Team Mark Johnson - President & CEO Erin Raese - COO Caitlin Schar - VP Account Management Kathleen Ostoich - Marketing Manager Jillian Hensley - Corporate Marketing Manager Lindsay Wagner - Sales Manager Contacts Article Submissions & Advertising: Erin Raese erinraese@loyalty360.org or 513.360.8680, ext. 210 To subscribe to Loyalty Management, visit loyalty360.org.
20
LE
PG. 63
12
SPECIAL PREVIEW
a sneak peek at loyalty expo
2012 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.
LOYALTY 360 ON THE WEB
NOW 64%
Research
Loyalty 360 and SAS recently conducted a survey focused on behavioral, qualitative and quantitative characteristics of customer loyalty trends within both B2B and B2C facing organizations. Over 150 industry professionals reported in from a variety of organizational backgrounds. Loyalty Management is pleased to provide you a sneak peek at just a few of the survey results. Full research findings will be revealed in a report due out in late January. In addition, SAS and Loyalty 360 will be discussing these findings in detail at the Loyalty Expo 2012 in Orlando this March.
trending
Have a department whose primary focus is Customer Retention and Loyalty
Plan to develop a Customer Retention and Loyalty department
31%
Report an annual budget of $2M+ for retention marketing programs
23%
TOP TRENDING CHANNELS FOR LISTENING TO THE CUSTOMER
EMAIL
84%
77%
SURVEYS
76%
SOCIAL MEDIA
Note Increase Customer Spend as the primary objective of their loyalty or retention efforts
47% 51%
Report Rewards Programs have the largest positive impact on their customer retention and loyalty efforts
NEW
Coming Soon
Inspired by our users' feedback, we're redesigning loyalty360.org to make it faster and easier to find the content, resources and tools you're looking for. Be on the lookout for the launch of our brand new design and streamlined interface. You'll find a completely revamped resource center where you can browse news, research, articles, multimedia and more by topic and industry. We've also implemented a site-wide search tool and content subscription options so you can quickly find and receive the information you need on and off loyalty360.org. In addition to this exciting new functionality, you'll also find the same great features you rely on from Loyalty 360 with a new and improved look and feel: Loyalty Management Online Loyalty Today Blog Aggregator Webinars & Conferences Calendar Find a Partner Councils (Beta) Job Board & Resume Bank And much more!
what's
on LOYALTY360.ORG
The NEW loyalty360.org
Featured Articles Found Exclusively @ Loyalty Management Online.

Challenges and Opportunities for Customer Loyalty in the World of Mobile Commerce
by Robert Hasson, Accenture
Cause Marketing: The 5 Best Practices and the 10 Benefits They'll Bring to Your Business
by Steve Schroeder, AmeriCardGold Stored Value Networks, LLC by Chris Malone, The Relational Capital Group by Haley Barrile, Medallia, Inc.
Building Loyalty Through Warmth And Competence Creating a Customer-Centric Culture: Five Best Practices For Empowering your Frontline Plus, more executive predictions and insights from the Loyalty 360 Special Feature: Industry Insights 2012!
Loyalty Management NOVEMBER 2011
FROM THE EDITOR
Welcome to 2012 and our 3rd anniversary issue of Loyalty Management!

In preparing this issue and for our upcoming 2012 Loyalty Expo, we've had time to reflect on the changes in the industry over the last three and a half years. During these recessionary years, it has been refreshing to see such a renewed focus on the customer. There was a need for us to get back to the basics, to really focus on what we're delivering and how we're delivering it. Probably unfortunate that it took a recession for us to take this look, but imperative. We're seeing renewed focus on everything from the customer experience, associate knowledge, training and customer interaction to a resurgence in direct mailyes, mail! When done right, to the right person, direct mail is still a very effective engagement tool. Even the loyalty program... some are saying it's dead; but the smart dollars are focused on doing a better job of incorporating this strategy into the overall core customer retention strategy; no longer a silo by itself a strong customer loyalty initiative can reduce attrition to single (even basis point) digits. In this issue, at the Loyalty Expo 2012 and throughout 2012, we'll be focusing on sharing stories, best practices, insights and research to help us all increase the value of our overall customer experience. Get the inside scoop on new customer initiatives, loyalty programs and technologies in exclusive interviews with Lowes Home Improvement, Bing, Whatabuger and Paypal. In addition, Givex shares best practice advice on to effectively use customer data in a case study with Costa Coffee, and DMN3 & The Turning Point Group reveal how a major Texas utility company is building relationships with its best customers. Interested in reaching the elusive millennial consumer? Melanie Shreffler of Ypulse, is tapped into this unique demographic and shares her insights in Winning Millennial Consumers with Collaboration and Communication. Further, what can we all learn from luxury brands in elevating the customer experience? VIPdesk reveals How Luxury Brands Can Reinvent the Customer Experience. And, throughout this first issue of 2012 we share insights and predictions from industry executivesdiscover what are expected to be the biggest trends in the year ahead. I look forward to seeing you in Orlando, March 18 - 20, at the Rosen Shingle Creek for the 2012 Loyalty Expo! Enjoy the issue! Sincerely,
Welcome new Loyalty 360 Members:

Southwest Airlines Love's Travel Stops & Country Stores Bridge2 Solutions TraseMiller HP Schwan's Home Service, Inc. Bazaarvoice Hawkeye Worldwide Radio Shack Sears Holdings Corporation ACI Worldwide
8
Erin Raese
Editor-in-Chief Loyalty Management erinraese@loyalty360.org
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
CONTRIBUTORS
Kathleen Diamonon
Kathleen Diamonon is cofounder and coowner of the Turning Point Group, a customer retention and loyalty firm. Her firm uses the 10 Steps to Creating Customer Passion approach based on many years of customer marketing.
John Orlando
Kathleen Diamonon
John Orlando
Mr. Orlando is responsible for market and service strategy, corporate marketing, and partner development at Sixth Sense Media. Mr. Orlando currently serves as a Special Advisor for the global trade organization MEF (Mobile Entertainment Forum).
Seth Hall
Seth Hall is currently the Vice President of Customer Service for Philadelphia Insurance Companies. Seth has over 15 years of service operations experience primarily focused in the healthcare and property and casualty industries.
Seth Hall
Mark Robeson
Mark Robeson
Mark Robeson, Senior Vice President, Sales & Marketing with VIPdesk, has over 18 years experience designing and managing bespoke B2B and B2B2C customer loyalty programs for Fortune 500 clients, luxury brands, and other brand-conscious companies.
Mark Johnson
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.
Sutowo
Mark Johnson
Director, Deloitte Melanie Shreffler
Melanie Shreffler is Editor-in-Chief of Ypulse, the leading authority on youth. Melanie is immersed in the world of youth culture, studying trends in technology, media, fashion, and more. She regularly serves as an expert source on the Millennial genAnalytics South East Asia eration.
Melanie Shreffler
Pam Lockard
Pam Lockard is the founder and owner of DMN3, a marketing agency focused on helping clients acquire and retain customers through customer insights. Her firm focuses on the energy, financial, health care, and consumer industries.
Sutowo
Sutowo is currently leading Deloitte Analytics Customer Analytics practice in Sutowo is an Analytics, Analytics, South East Asia. Sutowo is an CRM and Loyalty M specialist Management specialist CRM and Loyaltywith experience stemming across a disciplines including customer segmentation with experience stemming across a variety predictive modeling, campaign management of disciplines.
Sutowo is currently leading Deloitte Analyti Sutowo Analytics practice in South East Asia.
Pam Lockard
development, customer/marketing strategy f implementation, payment and collection stra programme design and optimization.
Michael Martin
BryanPrior to his current role, Sutowo led projects Wang
Machael Martin
Michael Martin is the Senior SEO Strategist & Mobile lead at Covario based out of San Diego, California. In his 10+ years of Internet Marketing experience he has project managed & overseen the online marketing improvements for BlackBerry, Dell, T-Mobile, SC Johnson, IGN, and Avaya.
banking, consumer packaged goods, Bryan Wang is Director Marketing at Givex, energy, publishing, retail, powering many the technology provider and telecommunications i companies first gift card andIndonesia, India, Japan Singapore, Malaysia, loyalty programs, and now solutionsstint in Accenture and Carls Kong during his for every stage of their customers journey.
Bryan Wang
Sutowo received a Chemical Engineering fir bachelor degree from National University of minor in Bioengineering. He is also a recipie Lee Kuan Yew gold medal.
Tricia Mikolai
Tricia is a strategic marketer with 10 years of experience in the healthcare industry. She is currently a design director at BI WORLDWIDE. She earned her masters degree in Business Communication from the University of St. Thomas.
If you would like to contribute to a future issue of Loyalty Management please contact Erin Raese at (513) 800.0360, ext. 210 or email at erinraese@loyalty360.org.
Tricia Mikolai
10
LOYALTY FORUM: YOUR VOICE

special feature
What's Ahead in 2012? Executive Predictions & Insights
20 12
As we reflect on 2011 and begin to plan for the year ahead, Loyalty 360 invited our members and contributors to share perspectives about the coming year. Company leaders from various backgrounds and industries shared predictions for top industry trends in 2012, and highlighted what they are looking forward to seeing develop for their industry and company. You will find these exclusive insights throughout this first issue of the new year, and more executive predictions on the newly launched Loyalty Management Online.
As instant gratification continues to increase, the need for hyperrelevant messaging and programs will be key. Companies should know when a consumer in their database has redeemed an offer and not send them a reminder or any other communication, aside from a thank you, or suggestion based on that purchase. Mobile continues to refine our way of accessing information but there are still too many apps that dont provide any value. Marketers will begin stripping down content, providing instant gratification and relevance in the app the same way it is accessed in-store; Starbucks does a great job accomplishing that with their app. Loyalty initiatives will continue to grow and be a stronger part of the marketing mix, not just an add-on program. Heidi Shurtz Senior Manager, Customer Relationship Marketing Allergan Medical
While social media has been at the top of all loyalty
managers to do list for the past year or two with organizations scrambling to be liked or followed, gamification will become an increasingly important concept over the next twelve plus months. Gamification isnt about designing the next FarmVille. It is simply the idea of using game thinking and game mechanics to drive engagement. The idea as it relates to loyalty programs is to make the journey (accumulating) as fun as the destination (redemption). If organizations can inject more fun into the accumulation process, customers will seek out these opportunities more actively, theyll talk about it with their friends and hopefully as a result they become more engaged with your brand. The good news for loyalty programs is that many have already incorporated gaming concepts like status, competition and prizing into their program designs. The next step is to build gaming into the everyday experience. SCENE has started to go down this path with the launch of our recent SCENEtourage campaign. SCENEtourage lets members create a group that they enjoy going to the movies with. When these friends go the movies together they are rewarded in a number of ways including bonus points (prizing) and badges (status) earned for demonstrating certain behaviors. Groups who see the most movies together can even track their progress on the SCENEtourage leaderboard (competition). For SCENE, it has proven to be a great way of enhancing the experience of going to the movies, its generated a lot of positive discussion on our social platforms and has resulted in our members actively recruiting their friends and family to join the program and enjoy a night at the movies. Its still early, but everyone seems to be having fun. Which is really the point isnt it?
"Loyalty initiatives will continue to grow and be a stronger part of the marketing mix, not just an add-on program."
From an industry standpoint, it is exciting to see continued
rebound in the economy, albeit choppy from day to day. This is driving favorable unit revenue growth in the hotel industry and portends a decent year to come. As for our company, most excited about our Relationship Marketing infrastructure development that will significantly upgrade our marketing interactions with past and potential guests. As for predictions of top industry trends, more mobile, more talk about social media, and more periodic angst about the global economy as it ebbs and flows over the year. Gregory D. Brown Vice President, Loyalty, Promotion & Relationship Marketing ChoicePrivileges
Gamification is simply the idea of using game thinking and game mechanics to drive engagement.
Shawn Bloom General Manager SCENE LP
11
Your Voice (continued)
We all talk about the age of the customer; I think its
also the age of the company that truly understands its customers, and how to better serve them. Power has shifted so fundamentally, away from the old world of we know best organisational behaviours. In the insurance sector, the perfect storm of low trust and increased connectivity through new technologies will bring about a sea change in how companies need to interact with their customers. Out go command and control, occasional listening to customers, and even rarer acting on what we hear; in comes constant listening, and of course, acting on what we hear. This feels like one more return (!) to back to basics, and the realisation that the only way to build true loyalty is to firstly do right by the customer. Theres no short cut, its about meeting their expectations, consistently, and only then earning the right to be considered as a good company to stay with, to buy more from and so on. So, Im really excited by the brave new world we face, because it grounds us in the everyday realities of just striving to do better and better by our customers and of course our being loyal to them its the realisation that we can only really expect our customers to be loyal to us if we are firstly loyal to them, and view them not as walking ATMs but as people like us, or better still like family members. So, its the age of humility, listening and acting, and doing this all the time, and moreover, consistently! Rod Butcher Head of Customer Experience and Insight Aviva Group
Safelite AutoGlass, the nations largest provider of vehicle
glass repair and replacement services, ended 2011 with a Net Promoter Score (NPS) of 85 percent. For those familiar with the NPS measurement, this is an impressive accomplishment. We began our customer delight journey four years ago and we realize we still have many opportunities to demonstrate our commitment to service. We are re-focusing our efforts to ensure we are a customercentric company, considering the customer experience every step of the way. With this in mind, we are excited to introduce more technology into our buying cycle. That includes a new and improved website where customers can easily book appointments and chat with an online CSR, the launch of an iPhone app for quoting and scheduling, and testing of tablets by our technicians in the field. The web continues to be a moving target when interacting with customers and we predict more companies will come to realize the importance of giving customers an online voice for both ranting and raving. For example, the latest crop of brand-advocacy programs allow businesses to be more proactive in asking for online testimonials. In fact, Safelite AutoGlass has been able to garner more than 15,000 positive online testimonials and increase average star ratings on various sites from 2.4 to 4.0 within a one-month time period. Indeed, we expect to see more companies using this type of loyalty marketing. Jennifer L. Kielmeyer Web & Emerging Technologies Strategic Marketing Manager, Safelite AutoGlass
We are in the building materials industry and produce cement and concrete for the
construction of residential and commercial infrastructure. The year 2012 will bring a moderate uptick as we gear towards a better economy after the US presidential election year. Our company CEMEX has been engaged in a major transformation with well defined values and will be positioned to further address our customer needs. Our Customer Experience journey that started with laying the foundation for addressing transactional needs of our customers will be expand to an integrated platform for marketing and sales.
Customer Experience will gain further popularity as a key opportunity for engagement in the coming year and beyond. Customer Experience professionals will find the year ahead to be a challenging one, especially with competing capex. But they can help ensure success by continuing to focus on the interactions that promise the biggest impact on their bottom line. The customer experience ecosystem will expand with array of powerful new devices and multiple interactions. Our customers who interact with us daily are also consumers of other emerging technologies in their personal lives that influences their experience. Their demand for flawless service that they are getting while buying a book or a video game, planning their vacation will make them demand for the same level of effortless service when they are buying our products. Mobility will become a top business and technology trend impacting customer experience. Many companies have a myriad of business processes, information systems and connection points with legacy and cloud based information sources. Using mobility to empower the business with actionable insights, getting the right data to the right person at the right time with the right interface will be the way of the future to provide the best customer experience. Ven R. Bontha Vice President of Customer Experience CEMEX, Inc.
The web continues to be a moving target when interacting with customers and we predict more companies will come to realize the importance of giving customers an online voicefor both ranting and raving.
Want more Industry Insights? Look for this symbol throught this issue of 2012 Loyalty Management and check out more online!
12
The ability to analyze customer data and turn that insight into
highly relevant customer communications provides a powerful platform to help brands prepare for the digital future. And, everything marketers understand about customer loyalty is changing. Nowhere is that change more profoundly felt than in the collection and use of customer data for marketing.
communication platform and to use those interactions to extend the loyalty cycle. Understanding transactional data is in many cases now the floor of your customer strategy rather than the ceiling. As our ability to track behaviour grows, it is likely that marketers will reward many more mundane customer activities besides simply making a purchase. 4. Marketers around the globe are engaged in an arms race to "connect the dots" between these varying data touch points. All of us have pieces of the consumer puzzle, and loyalty marketers typically have more of those pieces than most. But the winners will be those marketers who can successfully unite disparate sources of data in order to paint a complete picture of the customer relationship. So a new loyalty hierarchy will emerge, led by the Datarati, and based on the ability to connect those digital dots in service of customer relationships. Its our view at Aimia that the time to begin connecting those dots is now. Arguably the best way to join the ranks of the Datarati is to adopt at all times the perspective of your customers. Rather than starting with the technology and trying to force fit it into customers lives, start by understanding their needs, and then working backwards. Tomorrows winners will be those who reconcile new data sources with the complexities of consumer life to deliver customer loyalty strategies to the benefit of both companies and their customers. Rick Ferguson Vice President Knowledge Development, Aimia
Hal Varian, Google Chief Economist and Economics professor at UC Berkeley, believes the new coin of today is consumer data. In today's globalized, fragmented economy, winners will increasingly be separated from losers by their ability to collect, analyze and derive actionable insight from consumer data. He has coined a term for those companies who have an edge in customer data insight: the Datarati. The challenge for these companies lies in making effective use of the data theyve collected. Here a few key implications for marketers: 1. If you don't use your data, others will. If you don't collect and use proprietary customer data, other companies will collect and use data on your own customers. 2. Remaining on the sidelines is no longer an option. Every consumer-facing company in every industry must develop, execute and evolve a data-based customer loyalty strategy in order to maintain control of and build value into their customer relationships. 3. Recognize interactions as much as transactions. It has become increasingly important to track and measure customer interactions across every digital channel and
Rather than starting with the technology and trying to force fit it into customers lives, start by understanding their needs, and then working backwards.
Beyond the like: SocIal loyalt y

Is your brand a good friend? Apply traditional loyalty techniques to strengthen your social media performance. Well help elevate your status in your consumers personal space.
Redefining loyalty across social, mobile and web channels: points-based rewards, auction, community, punch card, promotion overlays, catalog management www.eprize.com facebook.com/eprize 877.837.7493 Loyalty Management JANUARY 2012
LOYALTY FORUM: BEHIND THE BRAND
Jonathan Clarkson
Director of Rapid Rewards, Southwest Airlines
of Rapid Rewards, Southwest Airlines frequent Jonathan Clarkson is Director maximizes Customer value. His responsibilitiesflyer program which encourages Customer loyalty and include Member acquisition, communication, and partnerships for the industry-leading program, which re-launched as the All-New Rapid Rewards in March of 2011. Jonathan joined Southwest in 2007 and helped establish the first Customer Insights team there, and also led Product Development efforts for Instation and Inflight. Prior to Southwest Airlines, Jonathan worked in a variety of marketing roles at PepsiCo, YUM! Brands, and Dr Pepper. Laura Hewitt from Aimia incorporating Carlson Marketing, spoke with Jonathan on behalf of Loyalty Management; we share insights from their conversation below. Through the years Southwest has maintained an amazing reputation within the low cost carrier space. How do you think the new program is being received?
The program has been received generally well. We have been very pleased with all of our business metrics around it; from the new members who have joined the program, to the impact it has had on bookings and the impact it has had on revenue related to partners. As is always the case, when you change a program that people have loved for so many years, there will be a certain amount of resistance. We have a little of that. We generally believe as people learn about the program and start seeing how it works in terms of not just earning, but also redeeming, and seeing how easy it is to get a flight and how quickly you can do it, the frustrations will start to go away. In fact, there are scenarios now if you buy three tickets you may already have enough points for a free flight, as an example. The number one frustration frequent flyers have is with their points/miles/credits. They cant redeem for the flight they want. Recently Ideaworks came out with a report that said that of those surveyed, 99.3 of the time people were able to redeem for the flight they wanted on Southwest, who was #1 especially good publicity right out of the gate. We are really excited about the direction we are going and its been a fun ride these last few months.
What can other industries like retail or financial services learn about customer loyalty from Southwest?
Other industries are learning from us all the time. We host workshops where many companies come to learn about how we approach customer service and how we approach a people-centric culture. And there is a sort of natural extension of that to the loyalty program. We just had a major financial services company in the other day. They brought all their key HR people and the head of our credit card together to try to understand a little but more about how we approach customer service and how we make decisions with one eye on the customer all the time. Because ultimately that is how you build loyalty. Everybody is happy. Everybody is positive. We just want to put customers at ease as thats how we do everything here.
14
Social media has been a phenomenal way for us to get realtime, immediate feedback on changes whether they are positive or negative. You definitely have to have a thick skin!
We do a lot of customer research. I would argue that we are among the most customer centric companies in America. So we actually put a lot of value on the voice of the customer. As a result, we are always going out and asking people what else they would like to see, or what does Southwest Airlines do that you would like to see us do better. Colleen Barrett our President Emeritus has a famous question she often asks, which is if you could shake a magic wand and change one thing what would it be? We use that approach when we are looking for ways to enhance the brand and the program with customers and members. Other industries could benefit from this approach.
Do you have a sense of where you overlap fans and followers to your programs best customers?
I think so things are still evolving with marrying those two sources up you can tell from the quality of responses and information that people share what kind of customer they are based on what they post.
What more can we expect from Southwest in 2012 and beyond?

The best predictor of the future is the past, and if you look at the recent past -whether its the new program or the brand in general - we have been in growth mode for several years. You can only expect us to grow, whether its new planes or new cities with the merging of AirTran. So were definitely in growth mode and its a fun place to work when things are like this. I have been in places when youre not in growth mode so being here makes me really appreciate that.
How has the program evolved with the addition of social media?
Social media has been a phenomenal way for us to get real-time, immediate feedback on changes whether they are positive or negative. You definitely have to have a thick skin! But when we get that feedback, we are able to get it real time and we can implement changes real time, whether its on the technology side or communications or whatever. In the past, you used to have to do surveys to understand how people felt about your brand. It would take two weeks to field it and collect responses and by the time you got it back, the situation had passed. Thats not the case here. So social media has enabled us to evolve in that sense. And in a proactive sense it has given us another advertising channel. We are buying up more and more of an advertising presence on Facebook and social media places. It has also enabled us to have a communication channel to tell people about new developments, get the word out very quickly about things and get the barometer on how people feel.
You have a Masters degree in Psychology tell us a bit about why you chose to get that degree?
I originally got that degree because my plan was to get a PhD in Forensic Psychology, which is a field where you do expert testimony. I use the elements of psychology every day. I believe there is a huge component of the everyday going to work that is based on relationships and I think your ability to manage and build relationships and foster them has as much to do with the success in your career as anything else. So there is the interpersonal side at work, and then there is the understanding of what customers think, want, say and what they really mean that has helped to have a little bit of psychology background. Its an art to take the science and bring it down to a heres what we should do at a tactical level.
continued on next page Loyalty Management JANUARY 2012
15
Behind the Brand: Jonathan Clarkson (continued)

much growth happening! I continually tell people it seems like every time you turn around there is something else going on were rolling out a new loyalty program or acquiring a new airline, or a new initiative in which were involved. I dont know when we are going to be bored! The fact there is always new stuff going inspires me. And, with new things come new questions that you dont have the answer to, so that drives my inspiration even more.
Who has had the most influence in your life?

Southwest.com Triple Rewards Visa
What is your personal customer loyalty philosophy?

I think it starts with the overall experience. The way you build loyalty in the airline industry for example, is through great customer service at the gate, on the phone, online, being on time, not charging for things that people dont think they should be charged for, and the loyalty program is an extension of that. So the loyalty that we build through a great customer experience when you fly and you get points for doing that - enables you to reward yourself rapidly with free tickets. At Southwest Airlines, we pride ourselves on building loyalty within the actual customer experience versus using the loyalty program as simply a mechanism to reward people for their purchases.
Obviously my parents had a big influence on me, but professionally I have had the good fortune to be around a lot of people who have been very influential- not necessarily directly, but learning by example with the type of wisdom you cant directly impart. You have to watch it. I have been lucky to have been able to be around a lot of folks who are able to do that. It goes back to what I was saying about relationships and how important those are in the workplace. When I worked at Pizza Hut for a while, my boss was a very bright guy and good mentor who taught me a lot about how to interact with people and how to work in a corporate environment, because its not always easy.
If you could meet anyone (past or present) who would it be and why? And, have you met Herb Kelleher?
I have met Herb Kelleher and he is a fantastic guy and genuinely one of the funniest men I have ever met. He has a fantastic sense of humor and is so unique I know thats an overused word, but he is truly that. However, Ive always thought that Bill Clinton would be a good guy to meet. I always admired his political savvy and the fact he was really very phenomenally intelligent, but was also was able to balance out social awareness and being socially facile. Thats a tough balance to achieve.
Tell us about the last time you had an ah-ha customer experience.
My ah-ha customer experience was with Apple the other day. My house was broken into a couple of months ago and we were robbed of our computer. There is this whole dance you do with the insurance company to tell them everything that was taken, but its hard to tell them whats missing when its not there anymore, AND especially since its a relatively emotional experience. Well, I had forgotten to claim my iTunes songs that I had downloaded onto my computer. When you multiply all of those by $.99 it adds up! So I sheepishly called the Apple store and explained the situation and that I was planning to buy another Apple computer. I explained that I had forgotten to claim the iTunes songs with the insurance company. I asked them if they could regrant me these songs. I assumed the answer was no and the guy at the Apple store said it was 50/50 shot. The folks online actually granted my request! So to me, its kind of like they didnt have to, but they did, and within a day I was downloading all my old songs onto my new computer. I was thankful for that and it was something not expected. It was an ah-ha moment because I went in thinking, well I will just take what they will give me and I enjoyed those songs while I had them, but instead they replenished almost my whole library. We are starting to become Apple loyalists based on the fact they were good to us.
What have you learned from your experiences that could help others in the loyalty industry?
Look for companies with a history of innovation. I have been fortunate with Southwest Airlines and previous places to have been exposed to a great deal of innovation or some form of innovation process which is something you dont see as much of in the airlines industry or in a loyalty program. Its difficult to innovate in the airlines because its so cross functional and operationally driven, but there are a lot of opportunities like we just had with the overhaul of the program to innovate in loyalty, and I think having worked at places with effective innovation pipelines and processes apply here most appropriately. L
2012
Predicted Trends
What inspires you?

Work inspires me to get up in the morning because I love this job. What inspires me is the fact that there is so
Continued increased focus on marketing of co-brand credit cards, especially due to increased competition from airline-agnostic reward cards like Cap One Venture and Chase Sapphire Airlines will make more deliberate, strategic efforts to integrate loyalty programs with social media platforms Airline loyalty programs will continue to broaden alternative means of redemption, beyond just free flights
16
How does your loyalty program stack up? Fiserv is the leading provider of full service direct marketing solutions
specializing in results driven loyalty communications. With Fiserv you have a partner that can help you with every aspect of your loyalty program from strategy and analytics to creative and production. With Fiserv you have the power to win your members loyalty. The power within. www.directmarketing.fiserv.com
Direct Marketing from
Visit us at the Loyalty Expo in Orlando, Florida on March 18-20, 2012, Booth #303
Pay men t s
Proces sing Ser v ices
R isk & C ompliance
Cus t omer & C hannel Managemen t
Insigh t s & Op t imiza t ion
2012 Fiserv, Inc. or its affiliates.
LOYALTY FORUM: 360 INSIGHTS
Customer Retention & Engagement Remain Top Challenges for 2012

by Mark Johnson, Loyalty 360
arketers are at a very critical juncture. Customer loyalty, versus acquisition, is critical for driving sustainable growth. Yet, businesses report that retaining and engaging customers remains one of their greatest challenges. Here is a look at the key trends we believe are going to impact loyalty marketing in 2012:
Marketers will work to glean intelligence from social media feedback.

The vast majority of real-time data created today is unstructured data. Study after study is showing that marketers are struggling with mining this data and analyzing it in order to derive valuable insights and actionable intelligence from it. In fact, a just-released report by EMC found that only 38% of business intelligence analysts and data scientists strongly agree that their company uses data to learn more about customers.
Customer engagement is the journey, loyalty is the destination.

Loyalty is a much bigger, broader, richer and growing ever more complex idea than it has been in the past. Loyalty is no longer about points, discounts, miles, rewards; it is about the way the processes, technologies, ideas, interactions engage an individual with the brand. The only way to achieve loyalty is through deeper engagement.
Loyalty program is seen as critical element of life cycle management.

Engagement with customers over a lifecycle is the new model for success. The only way to earn loyalty is through deeper customer engagement and data gathered from loyalty programs can be used effectively to drive a quality experience across all touch points and at all stages of the customer lifecycle.
There will be a renewed (and well-needed) focus on customer retention and loyalty vs. customer acquisition.
Customer loyalty has been identified as the top non-financial business challenge facing companies in 2012 (Protiviti). While daily deals like Groupon, LivingSocial are generating lots of buzz, marketers are realizing that these price-based technologies have taken their focus away from the real prize: customer loyalty.
Marketers will look at a mix of location-based behavioral data and attitudinal and preference data.
This trend will have an especially important impact on the daily deal space. Brands will want to have this data and control the message rather than offering such huge discounts to anonymous individuals.
Brands need to recognize customers at all touchpoints, especially the call center, to deliver a quality customer experience.
A recent poll by Loyalty 360 found that 78% of respondents believe that having a great customer experience makes them loyal. Creating this type of customer experience involves delivering quality customer service across all touchpoints, and marketers are realizing that this means integrating the call center into the overall customer experience.
Mobile coupons will go mainstream.

Juniper Research forecasts that the total redemption value of mobile coupons worldwide will be more than $43 billion by 2016, representing an eightfold increase from $5.4 billion this year. Cost effective mobile coupon campaigns provide merchants with an easy way to build customer loyalty.
We will see a focus on social media ROI.

While marketers believe that social media is worthwhile, most dont know how worthwhile it is. As marketers become more
18
sophisticated and skilled at navigating the social media channel, they will be more demanding of tools that track and improve ROI. In fact, the 2011 IBM Global CMO Study found that 63% of CMOs believe ROI on marketing spend will be the most important measure of their success by 2015. However, only 44% feel fully prepared to be held accountable for marketing ROI.
leads. They will become more proactive in encouraging reviews, implementing refer-a-friend programs, etc.
Mobile digital wallets will mark a big shift in retail payments.

With the value of transactions made over mobile devices estimated to be $240 billion this year (Juniper Research) and predicted to triple that size over the next five years, its not surprising that the battle over mobile wallets will continue to intensify. And with analysts at Forrester predicting that by 2016 consumers may be able to leave their traditional leather wallet at home and pay for most of their shopping over their handset, retailers need to think about the impact of mobile wallets as they build out their loyalty programs.
Brands will increasingly use the rich information about customer buying patterns generated via loyalty programs to create more targeted marketing/ messaging.
Gathering and tracking data amassed in the loyalty program will be used to help marketers with segmentation, messaging, for acquisition and retention. The information on customer transactions, likes, dislikes and preferences gives brands the deep level of customer intelligence needed to deliver the most relevant, highest quality customer experience and drive long-term loyalty.
Worthy causes will continue to influence consumer brand loyalty.

A study from Cone Communications found that consumers are more likely to pick a brand based on charities or causes it supports. A full 94% of responding consumers said they would abandon their typical brand for one of approximately equal quality and price if it backed a social issue. L
Social personalization will increase.

Marketers will harness the power of recommendations and referrals to persuade customers and prospects to follow their friends'
The 2011 IBM Global CMO Study found that 63% of CMOs believe ROI on marketing spend will be the most important measure of their success by 2015.
LOYALTY FORUM: Q&A
Q&A
Ask the Experts
promote this opportunity is Twitter. Discover has tweeted that tickets are available; tweets link directly to the rewards program website. When a cardmember redeems Cashback Bonus for Orange Bowl tickets and other exclusive offers, they can also tweet about it. Additionally, Discover uses Twitter as a support channel and theyve personalized it by providing the names and photographs of their Tweet Team. Check out @Discover for great examples of the convergence of loyalty and social media. There are interesting examples from other industries as well. The National Geographic Society developed a mobile photo safari trek that rewards participants for engaging with the brand through submitting photos, answering trivia questions and earning points. NASA also has embraced Twitter by creating Tweetup events, combining the thrill of rewardswinning a coveted spot to watch a launchwith Twitter and blog buzz. From varied corners, the social space is beginning to see more successful connections between loyalty rewards and social media. How do you move from having fans and followers to the next level of developing a strategy and measuring it? Align your internal resources and business goals; then foster dialog, promote advocacy, facilitate support and spur innovation. Building on these will give you a solid foundation for success.
Q: In 2012 we are looking to integrate our social media efforts
with our loyalty platform. We have several thousand followers and fans on Twitter and Facebook; how do I recognize and reward my best customers in the social space?
A:
Congratulations on recognizing the necessity of integrating social media with your loyalty marketing efforts. Erik Qualman, author of Socialnomics, stresses, We dont have a choice in whether we do social media, the question is how well we do it. Many businesses are learning that fans and followers are nice, but whats next? Social business is game changing and impacts all departments in an organization. Successful companies will align internal roles, processes, policies and stakeholders related to social media with their business objectives. They will then build a foundation similar to the one suggested by Jeremiah Owyang of the Altimeter Group and John Lovett of Web Analytics Demystified. That foundation has four key components that must be measured: foster dialog, promote advocacy, facilitate support and spur innovation. As organizations experiment with new social technologies, they are learning ways to incorporate them into their loyalty strategies. One of our clients, Discover Financial Services, is building loyalty through enhanced customer experiences. In October, Discover announced that cardmembers will have exclusive access to the 2012 Discover Orange Bowl. Specifically, cardmembers can redeem their Cashback Bonus to purchase tickets and other exclusive items. But Discover took it one step further by integrating this compelling loyalty offer into their social media strategy. Discover does a great job of understanding their socialgraphicsknowing where people are and meeting them there. One channel they use to
Mike McDonnell
Vice President, Product Management & Client Solutions, Affinion Loyalty Group
20
Fans and followers are nice, but what we really want to do is identify true brand advocates, understand who they are and why they are advocates, and design rewards and incentives to attract more of them. Try and give people a reason to do more than Like you. Give them a reason to login with you, and connect with you in others ways. Depending on the type of goods and services you are selling, a great, easy way to do this is with the new Facebook Lifestyle apps. These apps encourage your fans to share what they are doing with your brand (cooking with it, running with it, listening to it, etc) on their timeline. When they register for your app, you get to ask them permission to share with you some of their Facebook data. At a minimum, ask for email address and their basic profile information. A second way to do this would be to offer an incentive, perhaps at checkout, to share this purchase with their social graph.
A:
Regardless of the chosen method, your brand now has the ability to access your Facebook users likes and other key data. This begins to unlock the mystery of who are your brand advocates, and how they differ both in their behavior with you (transactional), and how they differ from your traditional customer base. Importantly, you can also begin to develop personas strictly within your social media base to begin content optimization strategies to those personas, both within social media and in other traditional outbound programs like email. Those who have the passion with your brand to connect with you in more powerful ways are truly your brand advocates, and can provide invaluable data to help in all of your marketing efforts. L
Bob Fetter
What we really want to do is identify true brand advocates, understand who they are and why they are advocates, and design rewards and incentives to attract more of them.
SVP, Sales & Marketing, Pluris
A:
Four steps to recognize and reward your best customers in the social space
1. Connect social profile information to customer database Integrating social media efforts with loyalty platform starts with tying online profile to existing records in the customer database. For retailers without a loyalty program, this could be a daunting task, but still doable. You can either use identifiable personal information of your fans to connect to a customer in the database, or buy social data from a third party, or send out an opt-in form or applications to collect customer social data. If you are running a loyalty program, things might be a little easier for you. Your loyalty members are more likely to release their social data if you encourage and incentivize them with right rewards. The reason why this step is so important is that you can better understand your fans through their past purchase behavior. 2. Establish Goals for your best customers The next step is to identify your best customers. Normally, retailers used the RFM (Recency, Frequency, and Monetary) or predictive modeling to segment the customer list. Recent customers with the most visits and had the most monetary are oftentimes defined as the best customers. In the social space, key influencers are of equal importance as big spenders if not more important. Some of the key influencers may not be the best customers per se in terms of monetary, but you
may want to pay special attentions to this sub group. Sysomos , a Toronto-based Social marketing company found that as Twitter users attract more followers, they tend to Tweet more often. Understanding their influences within communities and networks helps deliver and manage relevant messaging. Once you identify your best customers, based on their past purchase history, you can further segment them into more meaningful subgroups, i.e. Big spender and key influencer, Big Spenders but quite fans, Moderate spenders but Key Influencers, etc., and then set up goals for each segment respectively. For example, increase retention rate by x%, or increase number of /Tweets/day by y%, or increase number of fans by z%, etc. 3. Leverage Advantages of Social Loyalty The traditional loyalty programs mainly rewarded each consumer for their purchases; the social loyalty rewards purchases and reward those that influence the most total purchases through invitations, brand engagement, and positive world of month as well. By taking advantages of social incentives, interactions, gaming, and WOM of social media, social loyalty is able to establish emotional bonds with consumers, thus foster continuing relationship. What paybacks should you provide to your best customers? First thing is to understand what they really wanted from your loyalty programs. You can employ traditional research tools such as survey and/or focus groups to
find out your customers needs and wants. Again and again, research shows that Exclusive offers, Special deals, and exclusive contents are the top reasons why people became a fan of your brand. Generally speaking, tactics that have worked in the traditional loyalty programs will work in the social space too. The key is to be creative while keeping your rewards fiscally responsible. For example, a retailer sent its best customers a Surprise and Delight offer, say a free gift with high perceived value, but customers have to pick it up in the brick-and-mortar stores, thus creating cross-selling opportunities for store associates. 4. Measure, Learn, and Improve There are many ways to measure the effectiveness of marketing initiatives in the social space. You can measure the customer satisfaction, monthly referred social traffic to the site, or the growth of Facebook fans and Twitter followers, etc. However, ultimately, the single most important metrics is the Lift: whether or not your social loyalty has increased the conversion rate and the number of new customers; whether or not it has improved the retention rate of your best customers; and most importantly, whether or not it has generated incremental value for your business. L
Mu Hu
Director of Marketing & Strategic Planning, Golfsmith
21
FEATURES
Winning Millennial Consumers with Collaboration and Communication

by Melanie Shreffler, Ypulse
Millennials, those under-30 consumers, are a fickle group that marketers are still
trying to figure out. They want to be thought of as individuals, but theyre collaborative in nature and group-minded. Theyre living at home and watching cartoons, but are aching for more responsibility at work. In short, theyre a paradox. But these seemingly opposing characteristics hold the clues to winning them over.
22
Millennials have a close relationship with their parents, who have trusted them since a young age to help with household decisions. Modern families act more like partnerships than like dictatorships. Childrens opinions are given as much attention as adults opinions. As a result, Millennials are skilled consumers, having years of experience making purchase decisions on everything from breakfast cereal to family vacations to cars. Whats more, because theyve grown up having thoughtful conversations with their parents, they expect to have similar communication with other authority figuresfrom bosses to brand executiveswhom they consider their equals. Young adults have opinions that they believe matter, after all, their input has been valued by their parents and friends growing up. Whats more, with the advent of social media and online reviews, theyre also used to their opinions being respected by perfect strangers. So of course brands would want to hear what they think, too, right? Millennials filter isnt the same as that of older generations. While grown ups may be cautious about what they share online and hedge their comments, kids will share exactly what theyre thinking. Every word of it.
Millennials want to collaborate with their favorite brands and need to know their opinions are being heard, which requires two-way communication.
Their willingness to share what they think can work in favor of brands to turn young customers into true advocates, but that requires more than just listening. Millennials want to collaborate with their favorite brands and need to know their opinions are being heard, which requires twoway communication. When they post to a brands Facebook page, for example, they expect to hear back. It doesnt matter if the response is in agreement or not; they simply want acknowledgment of their contribution. The exchange helps them feel vested in the brands and responsible for its success. Yes, it takes a lot time and effortand in some cases a whole team of staff membersto maintain a social media presence, but the payoff is worth it when customers become brand champions and share it with their friends both online and offline. Brands social media sites are rife with sweepstakes and contests to the point that they dont even register with Millennials. They dont want to like a brand to get a chance at winning something; they want to interact with the brand in a meaningful way. Mountain Dew offers a great example of turning the age-old contest into a product development tour de force when it chose its most recent flavor. It recruited its most loyal fans for street teams to represent three possible new sodas and then
turned them loose with samples and a Mountain Dewbranded Facebook page for their flavor. Each team was passionate about its flavor winning and set out to recruit more fans through both online and real-life events, campaigns, and activities. In the end, the flavor with the most Facebook likes won and hit store shelves. Letting fans take over took trust, but it added to its reputation as a brand that is authentic to its fans while also building an excited and engaged social media following. That wouldnt have happed through a simple like-to-get-a-coupon campaign. Such contests also get at Millennials preference for fun game-like marketing. Facebook is key, but dont forget about other media. Millennials are spending more and more time on other social platforms, including Twitter, Tumblr, YouTube, GetGlue, and others, each fulfilling a different need. Theyll friend just about everyone and everything on Facebook, and reserve Twitter for their inner circle and favorite brands. They use YouTube and Tumblr for entertainment. They use email and more traditional media for information. But they only want to hear from certain brands in certain ways; being in as many places as possible lets them choose how they want to hear from you. They may not allow brands to invade their Twitter feed, preferring to hear from them by email. And of course, marketing messages should be designed to fit the medium. Theyll take more time to read what a brand shares via email than via Twitter, so dont be afraid to give them details rather than force them to a website for more information. As loyal as Millennials want to be to brands, their heads will still be turned by price. Coming of age in a down economy, theyve seen their parents worry about making ends meet and have fears about their own economic futures. Theyre deal-oriented and time-sensitive. Companies like Groupon and Gilt Groupe have taught them that they can get quality items for less if they act fast. But those companies only maintain loyal users by ensuring that their purchase experience is in line with what they expect of the brands they are buying. Theres nothing like buyers remorse to end a retail relationship. Brands targeting Millennials should do so in the same way Millennials approach brands: openly and honestly. They dont take themselves too seriously, and dont identify with brands that cant have a little fun with themselves. Of course, thats also a necessary aspect of interacting on social media. Its only a matter of time until a brand rep slips up and says something, ahem, off-color. Going all corporate in a response might solve the situation, but it changes the tone of the peer-to-peer forum that is social media. Bringing a little levity to the situation can go a long way. L
2012
Predicted Trends
Tablets. Millennials are obsessed with the iPad, but will end up with a cheaper Kindle Fire or Nook tablet that fits their budget and their tech needs. Twitter. Students love Facebook, but now everyone is on it, so they are using Twitter as a way to filter updates from friends and brands that really matter to them. Cord cutting. With TV nets making more content available online, students are turning to legal streaming because it fits their busy schedules.
23
FEATURES
How Luxury Brands Can Reinvent the Customer Experience

by Mark Robeson, VIPdesk
ffluent consumers in search of an unforgettable customer experience have historically been able to trust well-known luxury brands to provide just that. Luxury icons including the Ritz-Carlton, Four Seasons, Lexus, Porsche, Louis Vuitton, Chanel and Tiffany & Co have consistently been customer service mainstays, along with upscale fashion specialty retailer Nordstrom. Nordstrom has a reputation for customer service excellencean urban legend even exists stating that the department stores liberal return policy once allowed a customer to return a set of snow tires, although Nordstrom has never sold tires in the companys 100+ year history. Nordstroms customers are willing to pay a premium for stellar customer servicewhich has paid off, as the companys net earnings have outpaced that of its competitors in the first two quarters of 2011. Unfortunately, Nordstrom seems to be the exception vs. the rule regarding the current state of the luxury customer experience. Recent research conducted by the Luxury Institute reveals that while 57 percent of shoppers with an income of at least $150,000 identify superior customer service as a defining quality of luxury goods, 50 percent have noticed a marked decline in the quality of the customer experience. It is not surprising therefore that customer attrition rates in the luxury industry are hovering between 80-90 percent.
As is often the case, however, issues around the quality of the customer experience constitute opportunities to re-engage customers with improvements and win a stronger degree of loyalty from them long-term.Three principal ways in which luxury brands can take advantage of this untapped opportunity to reinvent their customer experience stand out: placing the customer experience at the heart of their enterprise, revisiting the power of personal relationships, and embracing the social and mobile revolution.
The Heart of the Luxury Experience = The Customer Experience

Before it is possible to provide an unforgettable luxury experience, it is important that a holistic view of the customer experience be constructed, according to Kerry Bodine, vice president and principal analyst at Forrester Research. Brands must conduct an audit of sortsthat is, examine all touch-points of the customer journey before determining what needs to be changed in order to provide their customers with a true luxury customer experience. Most brands look at traditional touch-points such as the in-store experience: dressing rooms, product packaging, register lines, and receipts. However touch-points that cant be overlooked are the actual use of the product, as well as the support that consumers experience
24
through information and call centers. Bodine also recommends that brands which havent done so already develop a loyalty program designed to maintain engagement with previous customers. As is the case with all aspects of the customer experience, an existing loyalty program must be examined as a touch-point just as important to the customer experience as a dressing room and post-purchase support. If the loyalty program that is currently in place is not an extension of the brands values or smoothly integrated into the overall customer experience, it needs to be revisited in the lens of the brand as a whole versus a one-off offering.
Return to a Personal Relationship

Developing personal relationships with their customers is something that all brands should strive to achieve in 2012. Many brands, including luxury brands who are often late adopters of online technologies, have invested in upgrading their online presence in recent years to the detriment of their offline, personal relationships. Unfortunately, according to the Luxury Institute, this means that only 10-15 percent of luxury customers state that they have a first-name relationship with a sales professional. This trend could be directly related to the 80-90 percent customer attrition rates seen in the luxury industry because customers who have a true human relationship with a brand typically buy double from that brand and
stay loyal for a longer period of time. The good news is that there is an opportunity for luxury brands to increase their customer loyalty, starting with a seemingly simple technique: a note. In the era of e-mail, handwritten correspondence can go a long way in developing a bond with a brand. One luxury executive who is a strong believer in a handwritten thank-you note is Fendis head of accessories, Silvia Venturini Fendi. Every one of the brands made-to-order Peekaboo bags come with a handwritten note from Ms. Fendi. Another brand that is well known for sending handwritten notes to its customers is Montblanc, purveyor of luxury watches, writing instruments, jewelry and leather. A personal relationship has also proven to go a long way towards customer loyalty in the hospitality industry. Brands ranging from international chains such as Starwood and Hyatt to luxury providers such as Strategic Hotels & Resorts Inc., which owns and manages hotels under the Four Seasons and Intercontinental brands, have realized that it isnt amenities such as perfumes, shampoos and soaps that matter. "It's a smile at reception, calling the guest by their name, serving breakfast on time, not making any mistakes with the bill," said Bernard Lambert, Chief Executive of Society des Bains de Mer, which runs four hotels and five casinos in Monaco. "It's about getting to know and then remembering your customers. Guests want to be recognized."
The good news is that there is an opportunity for luxury brands to increase their customer loyalty, starting with a seemingly simple technique: a note.
25
How Luxury Brands Can Reinvent the Customer Experience (continued)

The Social and Mobile Revolution and Its Influence on Luxury
Research conducted by CTIAThe Wireless Associationrevealed that there are now more smartphones and cellular-enabled devices in the United States than there are peopleand these devices are in the hands of the affluent. A recent Fidelity Investments survey of millionaires shows that 85 percent use text-messaging, smartphone applications and social mediaproof that this demographic is wired across the spectrum of channels offering online and mobile content and customer interaction. Luxury brands including Burberry, Coach, Louis Vuitton, Juicy and Kate Spade have recognized this from a product development perspective, developing iPhone, iPad and other smartphone and web-enabled device coversindicating a clear recognition of the power of these devices in the marketplace. Yet, many luxury brands have not embraced the influence of social media and mobile technology in regards to the customer experience. One major reason why luxury brands have been slow to embrace social media is that it is hard to maintain brand exclusivity when anyone with an internet connection is now able to develop a connection with your brand. However, luxury brands such as Jimmy Choo, Burberry and Mercedes Benz, and stores including Bergdorf Goodman have found a way to embrace social media because they know that super-affluent consumers are twice as likely as their average counterparts to use Twitter and LinkedIn36 percent of those with an average annual income of over $500,000 follow a brand on Twitter, compared with only 14 percent of the general population.
Reinventing the Customer Experience

While the current prognosis of the luxury customer experience is not ideal, the time is right for luxury brands to re-engage their customers, securing the level of longterm loyalty that is synonymous with market leaders like Nordstrom. Through a dedication to placing the customer experience at the heart of their enterprise, revisiting the power of personal relationships with their customers, and embracing the social and mobile revolution, luxury brands have the opportunity to reinvent the customer experience, and position themselves once again as the first choice for affluent consumers searching for an unforgettable customer experience. L
36 percent of those with an average annual income of over $500,000 follow a brand on Twitter, compared with only 14 percent of the general population.
2012
Integration of mobile and social media into loyalty programs will continue to grow. As consumers increase their online time via smartphones, tablets and other web-enabled devices, loyalty marketers must embrace these new communication tools in order to maintain relevance. In addition, the importance of the customer interaction will remain a strong focus, due to the increasing importance of a personal relationship between a brand and its customers. Not only are customers receiving deals via group buying sites such as Groupon and Living Social, but they are able to comparison shop on-the-spot via tools such as shopkick. As such, the customer experiencenot pricewill be the determining factor in long-term customer loyalty.
Predicted Trends
26
CUSTOMERS COME AND GO. FANS RETURN AGAIN AND AGAIN.

For three decades, Afnion Loyalty Group has been a pioneer in the loyalty and enhancement industries. We help our clients retain and motivate consumers while delivering tangible results and incremental revenue. We continually develop ground-breaking products found in almost every wallet in America.
www.afnionloyalty.com
1-800-622-4863
FEATURES
Strengthening Customer Relationships through Loyalty Programs

by Sutowo ( ), Deloitte Analytics South East Asia
The New Global Currency Data
According to IDC, the global volume of digital data will increase more than 40fold by 2020. The emergence of customer datainformation about customers needs, behavior and value is generating a new wave of opportunity for economic and societal value creation. Companies such as Google and Facebook have proven that profit pools are shifting towards companies that are adept at mining vast amount of data that consumers continue to generate. Along with the emergence of data, there comes a new lever companies are using to pull ahead of competitorscustomer relationship. Strong relationships between a company and its customers provide a sustainable competitive advantage that is extremely difficult to beat. Research shows that building stronger relationships is the most effective organizing principle for driving business results.
Loyalty Program
For coalition loyalty programs such as Nectar in UK (20 earn and 30 burn partners) and Aeroplan in Canada (75 earn and 188 burn partners), the very act of setting earn rates requires input and agreement from the partners who participate in the program. Besides earn rate, burn rate has an impact on financial accounting. IFRIC 13 which was instituted in 2008 stipulated that Airlines needed to defer the recognition of revenue from the sale of their FFP (Frequent Flier Program) miles until members made the redemption. In the case where a very small group of customers contribute a disproportionately large profit to an organization, the creation of an elite level in the program should be considered. A unique value proposition that appeals to customers is required for such an elite level. For example, access to an airport lounge is a much sought after value proposition that airlines can bestow upon their elite members. The creation of an elite level in the program will invariably introduce additional complexity for customer service and communications requiring flawless execution of the technological and operational delivery capability. An airlines elite members will be upset if they observe that bags without priority tag being delivered before theirs.
Figure 1: Key Elements of Loyalty Program
28
Program owners can deliver targeted acquisition, activation and retention campaigns by leveraging the insights derived from customer data. Not only are such campaigns critical to the success of a loyalty program, they form the key components of the program structure and they define the system and operational parameters of the program. By enrolling, a member enters into a contract with the loyalty program. It is vital that the program terms and conditions provide detailed information on the program structure, program benefits and points expiration. The points that program members earn are entered as financial liabilities which need to be managed carefully. Members are looking for points that never expire, while program owners want to expire members points balances periodically to reduce the financial liability. To satisfy both parties, an activity-based points expiry approach can be taken. If members make at least one point-earning transaction, their points remain evergreen but in the absence of such a transaction over an extended period, their points will expire. Customer Insights through Loyalty Programs The CMO Councils research, The Leaders in Loyalty: Feeling the Love from the Loyalty Club, found that 73 percent of members admitted to receiving promotions for products or services they already owned. Cost savings and more precise targeting can be achieved by segmenting customers according to their behavior, value and needs as shown in Figure 2. Maximum impact can be achieved by realigning the marketing budget and effort according to these customer groups, beefing up offers to customers who are sitting on the fence and reducing offers to customers who will remain loyal regardless.
Behavior
Drives
Generates
Needs
Customer
Value
Emotion Needs Dimension

Drve t Lear i o n
J ul oyf Con dent Expl aton Bus ac i ,energeti y, tve cAdvance ent or i Culure Har onious, ance m bal d m t l nvol y Lea der Pow er Har ony Social i ved m
Transaction Behavior Dimension
Equity Value Dimension
Drve t i o Acquie r
Advent ous ur Competit i on Athetc,s l i port y I ndependence Competit i ve Bol d
Cr i eatve
Altru im s
Empathetic
Aggr ive ess
Frindly e Cooper i aton Carig n nurturi ng s upportive Famil y Sens ble i Tr t adiion Consevatve r i Control Safety Sec urity Protei ctve Tr t adiional Cautous i Controi l ng l Status
Drve t i o Bond
Drve t D nd i o efe
The motive and need behind interest in services and how the value of the company meets them
Product usage of customers and their behavior when using these products
Value the customer brings to the business
Figure 2: Dimensions Used for Customer Segmentation
Figure 2: dimensions used for customer segmentation
73 percent of members admitted to receiving promotions for products or services they already owned.
The success of precision targeting through customer segmentation depends on its adoption. One such adoption challenge with statistical segmentation such as K-means clustering is that some segments that are derived may not be entirely homogeneous. For instance, one would not expect there to be average spending customers in the best segment but because K-means segregate customers by their relative distance from one another, customers at the borderline between two segments are never precisely segregated. Depending on the data points used, it does not always lead to actionable marketing campaign which negatively impacts
its wider adoption beyond customer insight department. To overcome these challenges, the traditional RFM (recency, frequency and monetary) model can be enhanced by including variables such as the potential to spend more. One global retailer adopted such an enhanced RFM approach where they found that low value customers could be further categorized into an upsell segment where there was potential for the customers to spend more and a true low-value segment where they genuinely had small wallet size. By doing so, marketing budget and effort could be directed at the up-sell segment instead of the entire group of low-value customers. A customer may randomly walk into a retail store, buy something and join the loyalty program. The first transaction made by the customer cannot be considered as activation as it could be a random act. The second transaction made by the customer, however, is a better representation of activation. If one were to plot the cumulative percentage of members who make their second transaction after x months of joining the program, one will find that this cumulative percentage plateaus after two to three months. This means that beyond two to three months post joining a loyalty program, little natural activation and intervention is required in the form of incentives for customers to come back to make that important second transaction. One thorny issue that organizations grapple with is that they do not know which customers who are inactive now will return in the future even without incentives. A reactivation study that was conducted for a global retailer shows that customers who did not turn up in one particular month would naturally come back within the next four months and any reactivation incentive given to them was going to waste. However, if one were to wait too long, in this case nine months or more, the customers would not come back and could be considered lost. Therefore, the ideal reactivation window was between five to eight months of inactivity. Surveys, interviews or focus groups can further enrich the segment profile by providing insights into the underlying needs or motives behind the customers use of products and services. This qualitative information can then be used to tailor communication strategy for each segment. Economics of Loyalty Programs One of the many aspects of loyalty programs that is hard to get right is engineering the economics of the reward structure and creating incentives good enough to change behavior but not so generous that they erode margins. Many loyalty programs that are launched with much
29
Strengthening Customer Relationships through Loyalty Programs (continued)

fanfare were terminated with embarrassment because the economics were not sustainable. One way for loyalty programs to stay financially viable is to leverage the opportunities presented to them at each stage of the loyalty lifecycle to drive engagement and profitable behavior as shown in Figure 3. As the balance of power tilts towards members of loyalty programs, they are increasingly demanding more value from the program. The lessons from the Great Financial Crisis that started in 2008 have taught the finance department that program owners can do more with less. As a result, program owners find it increasingly difficult to satisfy the demands from both their members and their finance departments.
Share of Spend
Tenure
L
Advocacy
Acquisition
Spend
Redemption drives lift in subsequent valuable behaviors
Redeem
Data & Technology
Earn
Incentivise profitable behavior & reward interaction, not just transaction
Comms
Communication drives engagement & redemption
Figure 3: How the Economics of Loyalty Work
The conventional wisdom in loyalty programs suggests that: redemption is a cost and lowering cost per point increases program profitability; redemption is an outcome, not an influencer for future behavior; little can be done to influence redemption behavior. However, the latest thinking in loyalty program economics runs contrary to such conventional wisdom. While some redemptions are pure cost, some can lead to incremental profit in the future. It is more appropriate to look at profit per point rather than cost per point. When a member redeems, they tend to stay longer and transact more post redemption compared to pre redemption. Not all redeemers are equal: some members who have decided to leave cash their points out and redemption is a pure cost while for others, redemption leads them to longer tenure and increased sales. Similarly, not all redemption items are created equal. Members who are cashing out their points tend to gravitate to certain items. In contrast, some items create more loyalty than others. Expensive items in the catalog that do not lead to desired outcomes can be eliminated. Through the right messaging and offers, members can be influenced to redeem for lower cost items or those that drive profitable behavior. Having a proactive redemption management strategy will maximize profit per point and alleviate the budget concerns of program owners. Making sure a companys loyalty program can support itself begins with careful attention to program design focusing on the key elements described above. Once the basics are covered, companies can raise the bar by taking a data-driven approach to create more value for both the program and its members. Finally, companies that effectively use analytics can change the game by optimizing the economics of their loyalty programs turning them from cost centers into profit centers. L
Companies that effectively use analytics can change the game by optimizing the economics of their loyalty programs turning them from cost centers into profit centers.
2012 Predicted Trends
Return to basicsgreater adoption of Analytics to identify and understand customers so as to customize offers to them. Leveraging SoLoMo (social, location and mobile) to improve relevance to customers based on where customer is at any given moment, what his social media posts say about his interest and even what his friends are buying or discussing online.
30
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
FEATURES
The Impact of Employee Engagement on Healthcare Organizations

by Tricia Mikolai, BI WORLDWIDE
or organizations in the healthcare industry, such as hospital networks, medical device manufacturers and pharmaceutical firms, the needs to comply with regulatory mandates, manage costs and provide excellent patient care are driving leaders to evaluate their business practices. For some, the most discernable solution may be to implement another process, conduct another survey or install a new data analysis system. A less tangible but more long-term solution, however, is to invest in human capital: those employees who need to adopt the process, respond to the survey or operate the technology. Employees and their level of engagement with, or loyalty to, the organization are directly responsible for its financial health.
Adopting New Processes

For many healthcare organizations, new regulatory mandates will require a change in business processes and reporting. Hospital networks, for example, are under pressure to reduce costs while adopting new processes such as electronic medical records. In response to patient feedback surveys, a major medical center in Pennsylvania initiated a change to its quality management processes in conjunction with a cost-reduction program. Leaders at this organization believed these initiatives would increase the quality of patient service, but they needed employees to buy into the enterprisewide changes that would take place. To drive employee engagement in the initiative, the organization chose to implement a rewards and
recognition program. This program provided electronic tools for leaders to recognize individuals and teams for demonstrating behaviors that were in line with quality management as well as other corporate values. It also provided two-way communications between leaders and employees that was used to produce consistent messaging about the changes in the organization. In addition to quality management, the organization wanted employees to participate in the cost-reduction initiative. Using the recognition platform, the organization launched an idea process for gathering employee input. Employees submitted cost reduction ideas, which leaders could review and approve as an initiative to implement in the organization. Employees who submitted ideas earned public recognition, and those whose ideas were selected received additional rewards. The results for this initiative exceeded the organizations goals. More than 60 percent of the employees submitted an idea, yielding savings in the first year of $1.3 million. The average value of an implemented idea was $19,000, and 35 percent of the submissions were implemented.
Increasing Job Satisfaction

In many studies over the past several years, data shows that engaged employees are less likely to leave an organization. While this is a cost-saving measure in terms of recruiting and training, its also vital to healthcare because gaps in staffing equal poor patient care and increased safety violations.
32
For a Midwestern healthcare facility, employee satisfaction surveys showed low rankings. Administrators were concerned that the low scores affected productivity among its employees as well as its overall level of care. After conducting employee focus groups and holding stakeholder meetings with executives, the organization launched an employee recognition program to drive long-term staff engagement and increase job satisfaction.
The engagement program drove a comprehensive strategy to align all the organizations recognition initiatives in one place, including employee-toemployee recognition, manager discretionary awards, length of service awards, employee referrals, wellness activities and holiday gifts.
Using a Web-based platform, the engagement program drove a comprehensive strategy to align all the organizations recognition initiatives in one place, including employee-to-employee recognition, manager discretionary awards, length of service awards, employee referrals, wellness activities and holiday gifts. Leaders also employed a high-touch, electronic communication campaign that highlighted corporate values and recognized staff who demonstrated positive behaviors. After the first year of the program, employee satisfaction with the recognition they received increased from 58.8 to 84 percent (an increase of 25 percent); employee satisfaction with their managers increased from 61.3 to 92 percent (an increase of more than 30 percent); and on average, employees were recognized three times per month. In addition to increasing employee satisfaction, the organization realized cost savings due to increased staff retention: the medical center had no openings for registered nurses, compared to the national vacancy rate of 16 percent. After three years of operating the engagement program, the organization conducted another employee survey. Analysis of the results showed a statistically significant correlation between the program and areas of high organizational focus including: 98 percent commitment to the organization; 96 percent would recommend the organization for patient care; and 75 percent believe the recognition program supports quality patient care.
33
The Impact of Employee Engagement on Healthcare Organizations (continued)
Reinforcing Positive Behaviors

Public and media scrutiny of the healthcare industry has caused many organizations to not only change their business methods, but to also change their culture and values. Employees are being measured on more than goal achievement; metrics like patient satisfaction, physician message recall and customer service scores are trending upward. Over the past several years, one pharmaceutical company has used its recognition platform to engage its employees in volunteer community advocacy. The initiative encourages employees to demonstrate the companys values and promote the value of medicine in their communities. Employees earn rewards and recognition for activities such as discussions and presentations to professional, civic and advocacy groups. By capitalizing on the knowledge and passion of its employees, the company promotes both its brand and provides valuable information to the public. After more than three consecutive years, 47 percent of employees have volunteered in a combined total of 9,405 activities. The organization has committed to continuing the program to reinforce its values with employees, measure activity that is aligned with its mission, and have local voices active in their communities.
Achieving Business Results

While high patient satisfaction scores, low staff turnover and public perception are important metrics in the healthcare industry, these organizations still need to show positive financial growth. Cost reduction, employee job satisfaction and excellent patient care contribute to revenue, however, many industry organizations also need to focus on sales. Many pharmaceutical firms have products that are similar to those already on the market with only subtle differentiation between them. In this instance, the organization had a product that was third in market share and needed its sales force to help it overcome its closest competitor. With 2,000 sales people, leaders knew that a multi-layered approach was necessary if they were going to engage the entire audience in achieving the market share goal. To onboard the sales force, the company implemented an eight-week learning and recognition program consisting of five product quizzes, manager discretionary awards, progress updates, public recognition and awards for high completion rates. At the end of the program, the organization believed the sales staff would be properly prepared for the launch of its consumer ad campaign.
Results of the program showed high engagement levels including 94 percent participation in the quizzes. Combined with the manager discretionary awards and ongoing communications, the company saw its market share increase by 2.5 percent during the eight week program. Once the consumer campaign launched, the organization reached its six-month objectives for ad response in six weeks.
Engaged employees can not only decrease operating costs, they can also drive corporate values and contribute to the bottom line.
Employee Engagement Is the Driving Force
Several studies group employees into one of three categories: engaged, disengaged and actively disengaged. The evidence above suggests that engaged employees can not only decrease operating costs, they can also drive cortruaxis_loyalty-management.pdf 10/31/11
porate values and contribute to the bottom line. Unfortunately, the disengaged and actively disengaged can cost organizations a lot more than their productive counterparts. Especially in healthcare, where the public and the government are very sensitive to any cost fluctuations and negative press, it is increasingly important for organizations to get all employees to both accept and adhere to new ways of doing business. Doing this requires more than simply offering a paycheck; it requires implementing a plan to engage staff in both short-term initiatives and long-term systemic changes. Healthcare companies that have these programs in place have seen the difference in participation, behaviors and business results. L
2012
Predicted Trends
Greater focus on loyalty program measurement More homogenization of programs across multiple locations to keep costs down Revamp milestone awards programs to be more personal and create a connection between organization and employee rather than manager and employee Add inexpensive feel good promotions to overall rewards program 5:55:10 PM
StatementRewards
W E B E M A I L S TAT E M E N T S M O B I L E S M S
Aligning customers, nancial institutions and merchants with data-driven personalized services.
Merchant
Reward existing customers Increase loyalty Access new customers Drive purchases & additional spend Optimize marketing ROI
Contact Truaxis to put your brand in front of millions of bank customers directly within their online bank statement. Email sales@truaxis.com or visit www.truaxis.com for more information.
FEATURES
The Power of Information

How the UKs top coffee chain used customer data to drive engagement and retention in a recession
by Bryan Wang, Givex
n 2009, the effects of the global recession were keenly felt in every consumers wallet. Costa knew they had customers who were very loyal to their brand, but didnt know who they actually were, or have a way to thank them personally for their continued loyalty. Other coffee chains competed aggressively for the same audience and there was the chance that Costa could lose customers during tough economic times. Research showed that 10% of their customers actually made up 50% of all visits. And yet, they also visited competing chains. If one day their best customers walked out and never came back, Costa had no way to reach them and win back their business. Costa needed an overall business strategy to not only foster the loyalty of this 10%, but also positively influence the other customer segments which made up the remaining 90%. By creating more value for customers, even less frequent purchasers would treat themselves more often to Costa Coffee. Discounting products at the time of purchase was a possible solution, but ultimately not a viable one in the long term. There had to be a way to increase Costas share of wallet without resorting to price cuts in a recession. The decision was made to transform Costas existing stored value program into a loyalty program that would allow them to understand their customers better, and provide them a way to communicate with them when they were not in one of their over 1200 locations. Data from the program would also enable them to take their most loyal customers into consideration, when making important operational decisions in areas such as staffing and where to open new locations.
Collecting Customer Data The Costa Coffee Club

Costa turned to its stored value program provider, Givex, for a loyalty solution which could be used on the same card. The new loyalty card the Costa Coffee Club card, enabled customers to earn points based on the amount they spent at Costa. With an integration to Costas point of sale system already in place, the cards could be seamlessly swiped to collect or redeem points in real time. The program was piloted in Scotland and rolled out in more than 1,200 Costa owned, corporate franchise and franchisee locations across the UK in March 2010. Customers can pick up the cards from Costa stores and begin using them immediately. They also have the option of registering their cards online to receive bonus points, protect their point balance in event of theft or loss, and receive email offers. Costa offers bonus points as an incentive for registration as collecting customer data is essential to understanding and targeting their best customers.
Costa needed an overall business strategy to not only foster the loyalty of [the top] 10%, but also positively influence the other customer segments which made up the remaining 90%.
36
Results
Just 18 months after the programs launch, there are now over 5.7 million loyalty cards in circulation. Considering that the UK has a population of 60 million people, this
How Costa Uses Customer Data

1. Customer Segmentation
The Costa CRM system receives a product data feed from the POS system and another feed for customer and transactional data from Givex, the loyalty program provider. Using this data, Costa categorizes cardholders into different segments based on specific criteria. Costa uses the data to identify high value customers and customers who can be motivated to increase their spending.
means that an estimated 1 in 10 of them is a member of the Costa Coffee Club! Loyalty cards are used in 41% of all transactions. Joining the loyalty program causes a customer to increase their visit frequency and spending. On average, cardholders spend 6% more than non-cardholders. The top 5% of cardholders also account for 41% of spending. Customer data provided by the loyalty cards enables Costa to identify exactly who these high-value customers, what they buy and how often they visit, information which was unavailable to them before. For fiscal year 2010/11, Costa Coffee delivered like for like sales growth of 7.8%, with profit up by 24.7% (425m). This is partly attributed to the success of the loyalty card.
2. Targeted Email Offers

During the online registration process, customers are also invited to opt-in for periodic email offers. Costa tailors a wide range of offers for each customer segment, including point multipliers and bonus points on their next visit. Offers are tailored using a variety of rules that account for different customer characteristics, including spend and visit frequency. Customers click on a link in the email to opt in for the offer, which applies on their next visit to Costa. Requiring this small action from the customer makes them aware of each time Costa gives them a perk and they never unknowingly benefit from a promotion. Costa also measures the rates at which people read and act on these emails. By monitoring email open rates, clickthroughs and other statistics, Costa determines the messaging and offers which appeal to different customer segments.
Not only has customer information given Costa confidence in its strategic decision-making, but its also provided new insights that it wouldnt have been possible to get before.
Conclusion
The loyalty card gives Costa a very good understanding of who their customers are and what they want. Costa now has the ability to communicate directly with them and build value in ways that differentiate it from competing coffee brands. Not only has customer information given Costa confidence in its strategic decision-making, but its also provided new insights that it wouldnt have been possible to get before. L
ABOUT COSTA COFFEE Costa Coffee is the number one coffee shop chain in the UK. With over 1,100 stores in the UK and over 600 in 25 other countries, weve enjoyed an amazing journey since we opened our first store in London. In a market where purchase has historically been driven by convenience rather than quality, Costa has challenged the way we think, buy and consume coffee. Led by a focus on continually improving product and service, Costa has employed independent taste tests to demonstrate that those who care about coffee prefer Costa. Now, 35% of the UKs adult population visit Costamore than any other Coffee chain.
3. Planning New Locations

Costa tracks where their high value customers live and work and identifies service gaps areas without a local coffee shop. Because theres no way to recognize these hotspots without customer data, Costa can act before competitors do, and fill service gaps.
4. Category Management
Internal teams test new menu items and develop product categories such as breakfast. They use the loyalty card data to identify product combinations purchased by customers, create new offerings and develop cross-selling and up-selling strategies.
5. Customer Feedback
Previously, Mystery Shoppers were used to gather data on the customer experience. However, this was not cost-effective and did not generate enough data to give an accurate representation of a locations typical operations. Now, Costa uses the loyalty card to detect recent visits and send an email survey to the customer. The system considers criteria such as the customers visit frequency and segment before sending the email to ensure customers are not contacted excessively. This new process brings in more accurate feedback, highlights concerns of high value customer segments and helps identify best practices to share among all locations.
50 percent of all adult mobile phone users will have smartphones by 2012 and therefore mobile applications and direct interactions with retail will continue to grow in popularity. Well start to see more innovations becoming mainstream, such as location-based loyalty and mobile payments. Its going to be an innovative period, but companies will try to do more with less and favor solutions that dont require extensive IT investment or upgrades. Companies will dive deeper into the customer data theyre collecting and find new ways to analyze it and apply it to both streamlining operations and providing more personalized service to customers.
2012
Predicted Trends
37
Loyalty
Omnego Inc. - Mobile Marketing
Omnego Inc. has created a platform that delivers a white-label mobile app with comprehensive mobile wallet and mobile marketing functionality. Fast and easy to implement, as well as economical to maintain, businesses can issue digital cards, tickets, statement/ invoice notifications and coupons to consumers on the go. 1. Mobile Cards (Gift/Loyalty/Membership) 2. Mobile Ads 3. Mobile Messages (Real-time points, $ balances, etc.) 4. Mobile Coupons and Offers 5. Mobile Web Gateway (Fast access to mobile web content) 6. QR Code Publishing & Scanning (for direct mail campaigns) 7. In-App scanning of 1D Barcodes for Product Information 8. Mobile Statement/Invoice/Document Notifications with receipt confirmation and In-App payment 9. Issue Coupons via social media (i.e. Facebook, Twitter) 10. Mobile Payments (Gift, Prepaid, Credit/Debit cards) 11. Location Based Services (Offers and Places) Leverage your existing mobile web and business platforms for on-going dynamic engagement in the mobile channel.
applez2applez - Analytics Platform

applez2applez believes in thinking differently about customer loyalty. They believe in changing the status quo and do so by tightly integrating the customer experience with the value proposition of, and the relationship with, the merchant. In order to create customer loyalty the manufacturer and the merchant need to know WHY consumers are choosing a particular product or service, WHAT they are buying from competitors and WHY are they buying from competitors. Only then can the product or service be aligned with customers values and personal preferences. Most customer loyalty programs are based upon the WHO and the WHICH. Our analytic platform adds the manufacturers and merchants WHY, and the competitors WHAT and WHY. Imagine adding this new competitive data to your customer loyalty or CRM platform in order to create a logical extension of the powerful base you currently use to generate value for your clients.
(Customer Service) Video-Based Remote Advisers Can Boost Customer Loyaltyobstacles to providing s Group (IBSG), common
Based on recent research from the Cisco Internet Business Solution , high staff turnover, and a lack of more expertise in bank branches include irregularly timed customer inquiries available, qualified staff to handle customers questions. nabled tablet technologies to connect The Tower Group recently proposed use of telepresence and video-e s. based on the customers schedule as part of bank transformation program customers with subject-matter experts delivery has clearly arrived. Lifelike banking The opportunity for video-enabled interaction to transform traditional alternative to) in-person interactions as a conversations are now a cost-effective addition to (and sometimes an video d revenue generation and service. means of driving greater customer relevance for improve smaller (more intimate and local) Video-based remote advisers represent a way for large banks to appear appear larger by augmenting branch services through better access to targeted expertise, and for smaller banks to the bank to think of branches as a network with those of specialist partners. In addition, a video channel allows d to serve customer segments more of resourcesnot just a network of physical locationsthat can be optimize make the best use of skilled staff, and generate greater revenue. appropriately, manage demand better, tion and loyalty has led to more than 40 Growing awareness of videos potential for improving customer satisfac for complex queries, for main and rural branches, in-market pilots in large banks globally: for higher-value products, customer segments. for people-less branches, and even for home or office use across all
38
PRODUCTS, ADVANCEMENTS, & TECHNOLOGIES - Learn more from t hese Loyalty Innovators and ot hers on Loyalty Management Online! LevelUp - Mobile Payments & Rewards
LevelUp is a new mobile solution that brings loyalty, rewards and payments together in one seamless system for merchants and consumers. For consumers, LevelUp is the smarter way to pay. Users sign up for free, link a credit or debit card to their account, then scan a smart phone with a unique QR code at participating businesses. Users receive credit the first time they pay with LevelUp at any business. By returning to the same store again and again, users can track their spend and progress towards more credit. After paying with LevelUp, users get an instant push notification and email receipt, confirming the transaction. LevelUps mission is to keep users coming back, which they accomplish through the use of game dynamics and a simple, intuitive mobile application. Better yet, theres a unique value proposition for businesses: the tools and insight to know whether or not marketing efforts are creating new, loyal customers.
Innovation
Xtify Mobile Customer Engagement

A brands mobile application users are the new loyal customer. Customers that download a brands mobile application are the new kind of loyal customer that brands cannot afford to ignore. These customers have raised their hands to say that they are willing to keep that brand close to them, on their mobile device, at all times. With proper planning and the right tools, brands have their hands on the holy grail of marketing the elusive ability to send the right message, to the right user, at the right time, and even the right place, at scale. Brands and marketers are making use of Xtifys Smart Notifications engine to build customer loyalty by sending highly relevant content, editorial, coupons and promotional information directly to consumers mobile devices. Smart Notifications describe both the form and the function of messages delivered using Xtifys platform. Smart Notifications are sent using business rules such as consumer proximity to locations of interest, consumer preference, consumer behavior, and usage patterns of the mobile application even data from CRM systems can be integrated to create the most relevant experience for the consumer. These targeting criteria ensure delivery of content when consumers are most likely to need and want it, while the richness of the messages drives desired actions. Marketers have a tremendous opportunity to engage loyal customers in a new and innovative way, using a channel that DOES NOT require an email address, phone number or double opt-in. While there are risks to improperly using these notifications, the biggest risk to a brand is to not communicate with customers at all in this channel. Xtifys comprehensive suite of tools help marketers determine when, where, how, how often and, with what content customers should be engaged to optimize marketing effectiveness and increase engagement.
A video channel allows the bank to think of branches as a network of resources-not just a network of physical locat ions.
continued on next page
39
Loyalty Innovations (continued)
Hallmark Business Connections Self-Service Employee Recognition Solution

Hallmark Business Connections, the b-to-b subsidiary of Hallmark Cards, Inc. expands its service offerings to make employee incentive programs easier for businesses to implement. Hallmark Business Connections SelfService Employee Recognition Solution is designed to deliver an easy way for small and mid-size businesses to create an employee recognition program. The system walks customers through a short series of screens allowing them to custom-design an incentive program based on the number of employees, recognition goals and desired reward. It is a three-step process: choose the award and incentive amount, add a custom message and check out. Once the program is established, its simple to implement. The powerful Self-Service Employee Recognition solution allows you to monitor progress of individuals, overall company goals, and reward employees accordingly. In addition, Hallmark Business Connections also launched a new employee recognition card line. Used individually, or in conjunction with a custom recognition program, these cards create meaningful connections
Our new Self-service program and Employee Recognition card line provides access for companies seeking a quick and simple way to make a personal connection with employees to keep them not only engaged but truly enriched.
and regard employees as distinctive individuals. Seven personalities were identified, each receiving a series of cards designed to resonate with specific characteristics, distinct personalities and card-giving occasions.
Ideas for Employees...

BI WORLDWIDE RAVE Product Overview
BI WORLDWIDEs award-winning RAVE is a mobile and web-based communications, engagement, recognition, promotion, incentive, learning and brand management platform. RAVE enables companies to connect with front line employees in ways that havent been possible before. RAVE is unique in that it was built mobile-first, web second for reaching audiences where they are and the way they want to be reached. It is designed with the ability to give and get recognition on the fly and share that recognition with personal Facebook, Twitter and email accountsbridging work life and home life. It uses variable award games that help maximize smaller budgets and facilitate rewarding those behaviors that are high in frequency but low in direct revenue value. It has mobile learning that helps extend traditional training and learning initiatives to maximize training investments. The secure and private social networking environment allows employees to connect across the organization in a fast, fluid manner. RAVE uses promotions and incentive tools that help product managers and brand managers drive key product and brand messages to the front lines, and then keep the conversation going to help drive a consistent brand customer experience.
RAVE enables companies to connect with front line employees in ways that havent been possible before.
40
ide Scoop The Ins
PayPal has created partnerships with groups like Points.com and EzRez for converting points to PayPal currency to spend on merchandise. Providing participating rewards programs the opportunity to allow PayPal account holders to use rewards points to pay for all or part of their transaction anywhere PayPal is accepted. The loyalty industry has been trying to get miles & points programs to the transaction/POS for years; its great to see it getting done. Loyalty 360 had the opportunity to hear from PayPals Dan Schatt, General Manager of Financial Innovations to learn more about how PayPal is bringing loyalty to the next level today.
Loyalty 360: What impetus allowed these types of relationships to finally come together, what makes them work?
Dan Schatt: It was the opening of our platform back in 2009 that has enabled us to make everything come together. Prior to our open platform, it would have taken significant resources to have any rewards issuer integrate with us. Now, it's as simple as integrating with a few standard Web Services APIs, before a rewards issuer can turn their existing rewards catalogue into a global marketplace where points can be redeemed with one of the nine million PayPal merchants.
We have seen that programs like AAdvantage and Dividend Miles are amongst the first to embrace the opportunity. How are the participating airlines responding?
Extremely well. Like any new service, there's always a concern when you're the first to offer something like this, but it has been something that has turned out to be very valuable for the airlinesthey can manage their miles liabilities, conversion and redemption rates quite effectively, while delighting their customers.
WHY REDEEM FOR A GIFT CARD GOOD AT JUST ONE MERCHANT, THAT TAKES A WEEK TO DELIVER, WHEN YOU CAN GET INSTANT GRATIFICATION BY USING YOUR PAYPAL ACCOUNT ANYWHERE ON THE WEB?
How have consumers responded to the opportunity?

Very favorably, and it's not surprising when we think about the value proposition. For a consumer, why redeem for a gift card good at just one merchant, that takes a week to deliver, when you can get instant gratification by using your PayPal account anywhere on the Web?
What growth do you anticipate? Where do you see this in 3 years?

We're not able to offer any specific data or metrics on our projections for our loyalty product, but I can tell you that initial customer and partner feedback has been off the charts. They tell us that being able to turn points into PayPal currency is a significant engagement driver. If we can make a rewards currency more valuable, it translates into more customer engagement, and everyone wants that.
What will help to advance this in the marketplace and impact this change?
If you're a rewards issuer, please call us! PayPal will continue to seek out strategic partners to advance the loyalty and rewards industry. We are already partnering with hundreds of financial institutions and several rewards companies, and will continue to work closely with our partners to offer innovative new products that enable them to provide their customers with the best user experience possible. Each of these offerings will not only allow for more flexibility in how consumers use their money, but will also enhance convenience, ease of use, safety and security.
41
MyLowes
Loyalty 360 interview with Lowes Home Improvement
the inside scoop
Lowes Home Improvement Embracing their new motto, Lowes: Never Stop Improvingscoop on the new MyLowes is taking the customer experience to the next level, and weve got the inside program. Below, Lowes shares insights into the program creation, details on how it is elevating the customer experience, initial consumer response and plans for future development.
How does the MyLowes program differentiate itself from other initiatives on the marketplace today?
MyLowes makes it easy on our customers because it loads information automatically after they get a MyLowes account, and customers can customize the information as much as they want. MyLowes helps employees develop deeper relationships with our customers. The capabilities of MyLowes will grow and evolve based on customer and employee feedback. The first release includes the following features: A MyLowes card or key fob to track in-store purchases online Home profile to organize room information such as floor dimensions, product details and notes Folders and lists to organize product and How-To content Purchase history from all purchase points (in store, contact center, online and mobile) Paint formula tracking after check out Access to warranties and product manuals from product detail pages Ability to set reminders for air filters and other common maintenance items And more
How does MyLowes support the overall brand strategy?

MyLowes is a major company initiative for us and the first big initiative that were bringing to life under our new brand positioning that launched in September, which is Lowes: Never Stop Improving. Were going to become more energetic and exciting as a brand and a company. Its a commitment to our customers and employees that we will Never Stop Improving our business, our customer experience and our communities. We will constantly be innovating and improving at Lowes so that our customers can do the same in their homes.
What current marketplace conditions lead to the creation of MyLowes program?

Weve always looked for ways to better meet the needs of our customers, and this is something weve been in the planning stages of for years. We believe this program will engage and inspire our customers and help build brand loyalty. MyLowes is a way that we are responding to customer wants and integrating all of our channels- stores, the contact center and Lowes.com. Empowering consumers with the ability to access information via their preferred means is a core tenant of our business at Lowes. We constantly evaluate how customers prefer
42
to interact with Lowe's brand. Consumers demand and deserve access to information, regardless of time or location. Enabling consumers to be inspired, conduct research, locate a store, or complete a purchase is foundational in the evolution of the customer shopping experience.
What is the overall goal of the program?

MyLowes is an integrated online experience that will help customers manage their biggest asset - their homes. It will revolutionize the home improvement experience, providing customers with a simple way to maintain, manage and dream about all things home through a customizable portal integrated with Lowes.com. We want MyLowes to be the one place where customers can manage all things related to their homes, and the ultimate goal of MyLowes is to bring more customers into Lowes and to develop deeper relationships with our current customers.
color goes where. Another example is how you can set reminders to get an email every time you need to replace your air filter, so you dont forget or buy the wrong one and have to return it. And, you can finally get rid of that junk drawer in your kitchen because your warranties and manuals will already be saved on your profile when you buy a new appliance. We hope all of these examples will help make our customers more brand loyal.
Are there plans to utilize the program to incorporate traditional loyalty tactics? How do you believe the program will help to drive loyalty?
MyLowes is a way for all of our customers to organize their home all in one place. At this time, there is not a rewards component to it. However, we believe that our customers will see the advantages of tracking all of their purchases in one place, regardless of whether they buy online, in-store, or through the contact center, and how much MyLowes can help them keep their homes organized.
Was customer feedback used to influence the development of MyLowes offering? If so, how was the feedback gathered and what determined which elements were incorporated into the program?
The new brand positioning and MyLowes are the result of strong customer research showing that customers are looking for inspiration and motivation from Lowe's. We will lead them through the journey of home improvement- from inspiration and planning to execution and enjoyment. This is something we have been working on for years and what you see in this first rollout mainly focused on Home Profile, Folders & Lists and Purchase History, is just the beginning. We are constantly getting employee feedback and we want customers to provide feedback through the Contact Us button on each page or through the @MyLowes twitter handle.
Any initial program feedback from customers or employees since the launch of the program? What features are generating the most buzz and interaction?
Customers and employees are very excited about the features included in MyLowes. They see it as unique, innovative and visionary. Customers are very excited to set up their Home Profile, which customizes their home improvement experience by naming rooms, assigning products and setting dimensions. And, they are using the Folders & Lists section multiple times to track and plan their projects.
What is the influence MyLowes program will have on elevating the customer experience?
Customers expect to be inspired, engaged and in control throughout the entire home improvement experiencefrom inspiration to enjoyment. MyLowes will give our customers the ability to complete a home profile that they can sort by room, assign products and wish lists to those rooms, track purchase history, store product manuals and warranties and more. Were going to be constantly adding capabilities and aiming for this to be a major draw for our customers.
Any plans to incorporate trending technologies such as mobile or social media into the program offering?
Yes, in 2012 we will be incorporating social media sharing tools and a mobile application.
How will the MyLowes program continue to evolve? What would you like to see next?
Were going to be constantly adding features and improving MyLowes. Some future features include: Mobile MyLowes Room design tools Personalized outreach from store associates Automatic subscription renewals for regular products (water filters, air filters, etc.) Sharing tools And much, much more. The possibilities are endless and will also be determined by feedback we get from our employees and customers on what they want and need.
How do you believe this will influence shopper behavior and create stickiness with the brand?
MyLowes will become a part of the way we do business. Weve found that our customers and employees each have their own MyLowes storyhow it will help make their home maintenance and planning simpler. One example is how you can now get rid of all of the pain cans that are cluttering up your garage because the formulas will automatically be uploaded onto your MyLowes account when you use your MyLowes card. You can then customize it even further by assigning that color to a room in your Home Profile, so you never get confused about which
Check out more about the new MyLowes program on YouTube at youtube.com/v/7DG9x15d6z4 L
In the first month of rollout, over a million customers signed up for the MyLowes program!
43 39
It Pays to Go Mobile SEO

by Michael Martin, Covario
obile has been the next big thing for what seems like more than a decade now. But with 15 percent of all search traffic emanating from mobile devices, mobile has become a big deal. Big enough that being good at it can drive incremental Internet sales and foot traffic for marketers with both online and offline presences. One of the most effective ways to capitalize on mobiles emerging status is through mobile search engine optimization (SEO). The basics for search engine optimization (SEO) for desktop devices have been standardized for many years with updated tactics around this core as search engine algorithms change. But clarity needs to be attained in how mobile differentiates from desktop search in order to do mobile right.
It pays to go mobile. Below are ten actionable insights:

1. Segment Mobile User Agent detection for feature phones, smartphones and tablets. 2. Set up a Google Places page and Bing Business Portal for each brick and mortar business location. 3. Have site strategies for feature phone, smartphone and tablet rendering. 4. Make sure there is a page for each business location and properly optimize them for mobile. 5. Ensure smartphone and tablet specific rendering on the same desktop URL. 6. Create feature phone rendering on an m.subdomain or /mobile subdirectory. 7. Declare the correct mobile DocType for each feature phone URL. 8. Use microformats to better delineate the correct address and phone number for each business location. 9. Utilize Mobile XML sitemaps and submit them search engines for feature phone URLs. 10. Use HTML5 on the desktop site to replace or supplement the business mobile app strategy.
Google is dominant in desktop search, powering approximately two out three search results in the U.S. However, it is even more so in mobile, where it drives more than 95 percent of the searches.
Google is dominant in desktop search, powering approximately two out three search results in the U.S. However, it is even more so in mobile, where it drives more than 95 percent of the searches. This is helped in large part due to Google being the default search engine for the iPhone, not to mention that Googles own Android is the dominant smartphone operating system worldwide. Mobile search across Google and the other search engines is really not one entity, but segmented into three different search result types. Generally, the different mobile search results are based on device type, which include: feature phone, smartphone and tablet.
Feature phones still represent more than half of all wireless phones used in the U.S., but only one-tenth of the traffic within the 15 percent of search that is conducted on mobile devices. These feature phone devices include Internet-enabled, non-WebKit browser phones that are generally dependent on a keypad and scrolling for navigation. These include the Motorola RAZR and pre-BlackBerry OS 6 phones. The search engine results for these devices are some-
44
what filtered from those shown on desktop results, as Google may remove pages from the results that take too long to load and not have the proper mobile DocType declared within their code. These results often put an onus on displaying the phone number within the results for click to call. Smartphones, on the other hand, are true mobile operating systempowered devices that use a WebKit browser and generally rely on touch navigation. These devices are, for example, powered by Android, iOS, Windows Phone 7, or BlackBerry OS6+ operating systems. The search engine results are nearly identical on smartphones as those for desktops, but usually with more focus on location. Proper touch-friendly smartphone rendering is currently a minimal, but growing, determiner for ranking organic results, as it just recently became a factor in a Web pages quality score within any Google paid result campaigns. Differentiated tablet results in Google are currently only provided to the iPad and Android 3.1+ tablets. These results are more similar to desktop results than those on phones, but with more focus on reviews and videos. With the landscape for mobile search results clarified, what are the SEO action items resulting from this? The knee jerk reaction from cursory investigation of mobile results is that Mobile SEO is not necessary as it is purely a local search play or the mistaken belief that it is better to use a .mobi subdomain for a sites mobile pages. In order to properly capitalize on the growing percentage of mobile searches, true Mobile SEO going beyond local optimization is necessary. Just as the first step to good SEO is ensuring the website is optimized for a good user experience, the first step to Mobile SEO is to mobilize the website and customize it based on the type of mobile device (iPhone, Android, Blackberry, Windows, or feature phone) that the person is using. A case in point is Toolfetch. A top-500 Internet Retailer in the very competitive industrial supplies market led by huge brands with equally
large stores, Toolfetch has built a successful, purely online business through highly responsive customer service having the supplies that customers need when they need them and making same-day delivery the new industry standard. Toolfetch uses a technology that automatically generates mobile pages instantly based on current content from the website and customizes them based on the mobile device being used. This solution has allowed the company to grow mobile search traffic 30 percent year-over-year, with 80 percent of that traffic being incremental to their website traffic. Properly setting up mobile sites for searches from these mobile devices will increase search engine visibility and conversions online, as well as product orders via inbound calls and from brick-and-mortar locations. L
2012
Predicted Trends
Organic search will be less dependent on the link economy with more onus on usability and rendering, especially for mobile devices. Expect to be pushed further into the Mobile Semantic Web 3.0 as sites will have to delineate their code even more and use microformats for advantages in search, which align with greater HTML5 adoption. Business will shift to mobile websites that are app-like using HTML5 and jQuery over actual apps for each mobile operating system, which will provide an SEO opportunity for mobile search.
Driving Digital Donations

Compassion International changes online donor engagement and increases average donation amount by 55 percent
Interview with Robert Carroll, SDL and Dustin Hardage, Compassion International
n the non-profit world where every penny counts, organizations can not afford to miss any potential donations. Stakeholder engagement is key and with more existing and potential donors spending time online, Compassion International is one non-profit that decided to revamp its online engagement strategy. Using one of the leading Web Content Management (WCM) solutions, SDL Tridion, the charity dedicated to fighting global child poverty has seen positive changes on both customer-facing and back-end sides of the Compassion International website. We sat down with Dustin Hardage, Web and interactive director at Compassion International and Robert Carroll, Global Chief Marketing Officer at SDL Web Content Management Solutions to discuss the positive changes of overhauling the site.
amount of donations we could accept at one time. For a non-profit passionate about their cause, there is no worse feeling than knowing people are willing to donate to the cause but at times find it challenging to submit donations because of technical complications.
Are these problems common for non-profits adapting to changing consumer behavior?
Robert Carroll: Unfortunately, yes. With our long and proud history of working with non-profits such as Compassion International and BreastCancer.Org, we have seen many other non-profits fear making dramatic changes to their website and supporting IT infrastructure. They understand the benefits that the upgrade would bring but often are concerned that something might go awry. While understandable, this is also concerning because while the website was once a secondary source of information for consumers or in this case donors, today its the main shop front. Not having a presence in the marketplace place where your customers are gathering and not interacting with them presents missed opportunities that is like throwing money down the drain.
What motivated you to take look at your website and how you were engaging with your donors online?
Dustin Hardage: Compassion International was founded in 1952 to fight child poverty, and over the years our mission grew to supporting a more holistic child development model that includes more than fighting poverty during the childs early years. Our website required an upgrade to reflect our growing mission and we saw it as a great opportunity to make technical, design, and operational changes that support our ministry goals.
What kind of results have you seen since implementing the new platform and launching the new website?
DH: The successes have been two-fold, namely on the donorfacing front and the back-end. On the donor-facing front, our website capacity has increased from handling 1,800 concurrent users to 4,500. Donations can now be made all at once through the shopping cart system, which has increased the average donation amount by 55 percent. Our Search Engine Optimization (SEO) traffic has gone up, and the Web traffic on each section of our site has increased by a minimum of 50 percent. One page that is core to our ministry actually increased by 350 percent! On the back-end of the operation, efficiency has improved significantly. It used to be that our marketing staff was limited to making changes to content based on existing website templates, and the
Were there any particular concerns you wanted to address with the new website?
DH: As our mission expanded to cover more activities and ways donors can release children from poverty, the number of content creators grew along with it. At this stage in our 60 year history, we have nearly 30 authors that manage various information across the website. These people are creative and full of ideas, but our old web content management system was limited by a rigid templated system. Another limitation we faced was our existing website capacity. We could only handle 1,800 concurrent users on the site at any time, which really limited the
46
For a non-profit passionate about their cause, there is no worse feeling than knowing people are willing to donate to the cause but at times find it challenging to submit donations because of technical complications.
IT department would need to be involved in all significant changes. Needless to say that this frustrated both the marketing staff who felt their creativity was stifled, as well as the IT department who wanted to focus on bigger things than making marketing type content-specific changes to the website. The Marketing web team now does their own coding for things like Google Analytics and Google Page Optimizer, and have the flexibility to change content whenever they like. They can test page configuration, conversion, and change the page layout if necessary. Tridion has also made a huge difference for SEO because it gives extensive control that empowers the marketing team to change many page elements that had previously required IT to be involved. RC: Empowering marketers to take charge of online tools and technology is one of the key things we had in mind when we designed SDL Tridion. Compassion International has over 5,000 webpages deployed from one control center and they can upload new information or change existing information from one seamless interface.
2012
Robert's Predicted Trends
CXM: Traditional Content Management will morph into Experience Management. Mobile: This tool will become a channel by itself. All predictions of the mobile usage so far have come true. Multichannel Campaign Orchestration: It is no longer enough to excel in one channel. The customer decides how, when and where they would like to consume information. Organizations need to pay close attention to the orchestration between the various channels to provide the ultimate customer experience. Social Media: Like mobile, social media will continue to grow exponentially and it needs to be included in the marketing mix Predictive Targeting: Customers expect to receive only information thats relevant to them. The better the information, the more likely the chance that they will participate in a(nother) sales engagement. Global/Local/Multilingual: Consumers expect organizations to offer information tailored to niche geographical and cultural markets. Those not engaging are missing out on an untapped revenue source. ABOUT THE AUTHOR S Robert Carroll is CMO of SDLs Web Content Management Solutions division. He is responsible for crafting and executing SDLs marketing strategy including brand, product marketing, sales enablement, press and analyst relations, events, and demand generation programs. Dustin Hardage is the Web and Interactive Director at Compassion International. He is responsible for the organizations Internet marketing strategy, including ecommerce, online advertising, social media, search engine marketing and optimization, & mobile marketing. Compassion International is the worlds largest Christian child development organization that permanently releases children from poverty. Compassion successfully tackles global poverty one child at a time, serving more than 1.2 million children in 26 of the worlds poorest countries.
What are your future plans for the website and online strategy?
DH: Wed like to use the SDL SmartTarget tool to begin to improve on servicing our donors online. By combining it with our current CRM, It will allow us to determine individual donors specific interests so that we can provide them with the most relevant content interests, regardless of where they are on the website. We will continue to focus on the relationships between the donors and the children they sponsor, so we will look into SDLs automated translation as well. Weve always encouraged sponsors to write letters to their children and the children to write back, and since our mission has taken us across 26 countries and more than 1.2 million children so far, were excited about the potential to automate translation. This would really expedite the entire communication process and really help build a stronger relationship with the donors and the children theyre sponsoring. L
47
The Basic Elements of Customer Engagement:

Location, Location and Location
by John Orlando, Sixth Sense Media
ust as in real estate, marketing programs can increase or decrease in value due to location. The number one rule in real estate is now becoming the number one rule in driving customer engagement and deepening brand loyalty. And because the best way to leverage a customers location is through mobile, location-aware marketing is the catalyst for many marketers to take the mobile leap -- with some extremely impressive results. Location-based marketing technology is a valuable tool for marketers because of its ability for improving the way businesses can advertise, communicate and stay competitive globally and hyper-locally. The reality is that businesses are just catching up to the sophisticated ways their customers are communicating and getting information. Ninety-six percent of the U.S. population has a mobile phone and EMarketer projected U.S. smartphone users would reach 73.3 million by the end of 2011, representing 31% of the total mobile user population. In 2014, its forecasted that mobile internet usage will overtake desktop internet usage. Already in 2011, more than 50% of all local searches are done from a mobile device. I cant overstate this enough. Loyalty marketers future successes rely on mobile and location. So how far along the line are you at making your mobile customers even more loyal? Beyond driving customer engagement, location-based marketings biggest advantage is that it captures customers valuable attention at the right time and place. Location-based marketing feeds lucrative impulse buying, for example Buy 2 and get 1 FREE good until 5PM today. Location-based marketing can also foster a stronger one-on-one relationship with customers. And by allowing customers to check-in to a business location and get instant notification of any deals that may be available encourages repeat visits and rewards them for being on location.
There are two basic types of location-based marketing approaches push and pull that can be done either through SMS, display advertising and search. The pull approach is the least desirable option when it comes to connecting with existing customers since its based on useroriginated searches. But with that said, once a connection is made and relevant offers are presented, it can further enhance the users perception of a companys brand. The push approach, specifically SMS push approach, is personalized and proactive. The core element to a push approach is opt-in. Opt-in respects an individual users privacy and preferences, and abides to regulations set out by the MMA (Mobile Marketing Association). Users can determine what type of promotions they want to receive. This approach is perfectly tailored to customer loyalty strategies, and when done right, can be positioned as a benefit to their loyalty program members. Would you like to receive personalized promotional offers when you are conveniently near our locations? Why wouldnt they?
Targeted Objective Setting

Location-based SMS can address very specific marketing objectives such as driving footfall to a specific location, selling more of a particular product or service, and increasing sales during a specific time of the day. For example: Deliver a coupon or a message to ANY mobile phone Deliver detailed product offer when someone is standing in front of the product Offer incentives for location-based activities such as visiting a store multiple times
Getting Personal, Relevant

As loyalty marketers know, building strong relationships with their customers requires the ability to relate to their needs and meet their expectations. Its important to understand that location isn't necessarily an indication of purchasing intent.
48
Location-based SMS is much more effective when your programs are segmented based on profiles and other past customer history. For example, is this customer a frequent purchaser? Havent purchased in awhile? Tends to buy things on sale or online? Has a history of purchasing a specific type of product? These are all sorts of information that can be leveraged together with a location-based SMS offer. Targeted and relevant SMS push offers recognize your customers as individuals and increase your chances for developing long-term relationships. But having the ability to communicate with your customers via a highly personal medium like their mobile phone, layered with the ability for you to know their current location, should never be taken lightly. The more invasive a tactic, the more likely it is to lose a customer for good.
Campaign Ideas
Here are some SMS campaign ideas that have produced successful marketing and revenue results for real-world companies.
Mens Clothing Fashionista [ example 1 ]

Joe is a loyal customer at The Mens Store. While looking at The Mens Store latest catalog, he saw that sending the keyword TMS to a short-code would enable him to receive occasional location-aware mobile offers. Joe opts-in. Offer: Sales Reminder On a Saturday morning while out doing errands, Joe receives a SMS from The Mens Store reminding him that the nationally advertised sale is ending this weekend. He happens to be just 3 miles from his local store. Joe takes advantage of the sale and completes his Saturday errand by dropping into the store. Offer: 20% Coupon On a Friday afternoon Joe receives an SMS offer from The Mens Store for an upcoming sale on cashmere sweaters this weekend. Joe has enjoyed offers for similar items in the past and is curious what the offer will be this time. This offer uses a Virtual Redemption feature of The Mens Store mobile service. The offer has a personalized 5-digit code in it. It informs Joe that the way he gets his special offer is to go to one of his local The Mens Store and text the 5-digit code to the their mobile service. Joe visits The Mens Store on Saturday, opens his phone, and simply replies to his offer SMS with the 5-digit code. He receives back a 20% off coupon. He buys a sweater and uses his mobile coupon.
Location-based SMS is much more effective when your programs are segmented based on profiles and other past customer history.
Driving Loyalty Via Interactivty
Location-aware campaigns can provide two-way interactive engagement via tracking location, enabling customers to respond directly back to an SMS offer, and allowing for redemption of offers that bypass the retail processes. These interactions gamify the campaign and add excitement for the consumer while enabling direct measurement of on-premise campaign participants. Some examples of interactivity include: Virtual Redemption can verifiy that a campaign has succeeded in getting customers into a desired location by tracking coupon offers to the individual customer, verifying their location, and then sending them a redeemable coupon. Just like check-in functionality used in well-known mobile applications, SMS Check-ins enables customers to confirm that they are at the physical store location. SMS Check-ins are well-suited for general awareness campaigns that do not include a discount offer. For example, Check-in and win a chance to get a free sandwich allow marketers to close the loop on awareness messaging and monitor a campaigns performance.
Pocketbook Diva [ example 2 ]

Jane enjoys the LeatherXO luxury brand of leather goods. Jane follows the brand on Twitter and is excited about Springs upcoming product line. Jane sees an opportunity to get exclusive offers with location information through the LeatherXO Mobile service. She opts in. Offer: Launch Event Invitation Jane is pleased when she gets an SMS offer from LeatherXO Mobile service inviting her to the Spring launch event at a mall-based store near her. She plans to attend. Offer: Launch Event Reminder The day before the event, she gets a brand-sponsored offer to receive 25% off on all purchases that day at the special event. She uses this offer. Offer: MyDeals Check-in Impressed by the personalization and shopping benefits of the LeatherXO Mobile Service, Jane starts to take advantage of the SMS Check-in feature. When she was on vacation in Miami, she texted MyDeals to the LeatherXO Mobile service and was delighted to discover they were promoting their summer line and that two premium LeatherXO-only outlets were within 10 miles of her hotel. It was great to be able to get on-demand localized information so that she could go shopping in a big city when she had the time and focus for it.
Planning for Success

Key factors in achieving long-term success in location-aware marketing efforts include 1) the size and health of the mobile opt-in list, 2) providing customers with relevant, personalized offers and communications, and 3) aligning your company goals and objectives with the capabilities of location-aware marketing service. Just as loyalty campaigns vary in their sophistication, business requirements and objectives, so do location-aware marketing services. Some are basic and meet the fundamental requirements, while others offer more advanced capabilities like interactivity, persistent profiling, and location zone tracking. L
Customer loyalty programs will get a big boost by leveraging SMS (short messaging service) communication programs A customers mobile phone number will become more valuable than an email or home address
2012
Predicted Trends
49
BY THE NUMBERS
BY THE N UMB ER S
Recent Industry Research

38%
consumers who switch brands when another brand is on sale [Colloquy]
$134 billion 26 million

PwC's estimated spending on digital goods in 2014 mobile transactions made in the eleven months post launch of Starbucks' mobile payment app.
RETAIL LOYALT Y PROGR A M INSIGHT FROM ACI WORLDWIDE Many loyalty programs dont benefit the consumer and can hurt customer loyalty for the retailer. Consumers who have had a negative experience from a loyalty program
44%
Americans who have received a loyalty program reward or promotion that made them feel valued as a customer
27%
Loyalty program members are enrolled in a program that they dont completely understand
81%
Members report that they havent heard a single word from a loyalty program since the day they signed up
85%
Why did you unfollow me? 58% of respondents said its because you appear automated. Often the best way to get someone to follow you is through retweets. What makes people retweet? Interesting Content: 92% Humor: 84%
-WhiteFireSEO poll on Twitter psychology for marketers
B2B marketers are spending millions of dollars annually on social marketing programs, though nearly 30% are not tracking the impact of social media programs on lead generation and sales.
Pardot Survey Findings
50
LOYALTY FORUM: YOUR VOICE

special feature
What's Ahead in 2012? Executive Predictions & Insights (Contd.)

We see two parallel emphases for loyalty marketing in 2012. On one
hand, it will include more of a focus on enterprise-wide or relationship rewards where customers are encouraged via rewards incentives to have a deeper, broader experience with a financial institution or business entity. In exchange, customers will want loyalty programs to be about me and relevantwhich means offering redemptions that are significant and pertinent to a particular customer segment. This means that a financial institution or business will have to ensure that their programs offer a rich suite of redemptions to appeal to their diverse customer base. As a result customer analytics will be more important than ever as well. Loyalty will be thought of as a goal, not a program, and engagement will be the driver in loyalty programs. Steve VanFleet, CEO and President RewardsNOW technological advancements, and globalization is causing marketers to re-think their craft. Marketers not only have to deliver deeper customer engagement; they are now called to future-proof their business in terms of financial performance, customer relevance, and loyalty. The undeniable macro-trend that undergirds this shift in marketing perspective in the past year or so is Big Data (and its associated ramifications such as Big Analytics, Big Insights, and the like). To this end, here are my top three predictions on marketing and technology for 2012: Analytics ascends into a strategic business capability: Businesses that have a data-oriented culture and use analytics more extensively to drive fact-based decisions, executions, management, and innovation will thrive. High-performance analytics start to take-off: With the volume, velocity, and variety of data skyrocketing, its even more critical to get timely insights needed so that marketers can make quicker decisions in an ever-shrinking window of opportunity. Technologies that co-locate the data and analytics will become more mainstream to achieve marketing speed and efficiency Integrated marketing management becomes more prevalent: Successful multi-channel marketingacross offline, digital, and emerging channelswill necessitate integrating planning, operational, analytic, execution, and experience functions. Technologies that harness, integrate, and exploit data and customer intelligence across these functions for a more holistic marketing process will start gaining traction. Wilson Raj Global Product Marketing Consultant, Customer Intelligence, SAS
20 12
The new landscape of empowered customers, dizzying
Customers are now in charge of marketinghow, when and
where it is consumed. For the most part, marketers arent prepared for this new world. Marketers know that they must engage customers and do so in a coordinated, cross-media manner. Marketers know that customer data and analytics-enabled insights must be applied to customer engagement. Marketers know that old processes wont meet new needs. Those who win in 2012 will refuse to be paralyzed by the intimidation of change of the fear of failure. They will embrace new technology, adopt a new marketing mindset, recognize that old processes cant address new challenges, and thrive through effective, automated and dynamic customer engagement. 2012 will conclude with a rapidly widening gap between those who made the early moves to create a marketing platform for dynamic customer engagements and who as a result are part of the critical customer conversations and those who chose to watch from the sidelines as their customers engage with someone else. John Thomson CEO Saepio
Businesses that have a data-oriented culture and use analytics more extensively to drive fact-based decisions, executions, management, and innovation will thrive.
2012 will be the "year of distribution". While this will be partly driven by the pace of technology advancement in areas like mobile platforms,
social networks, digital wallets, and ecommerce platforms, the real driver will be consumers. Loyalty program members are increasingly looking for their programs to show up where they happen to be, not the other way around. "I want more places to earn my miles" or "Where else can I use my points?" are constant refrains we hear from Points.com users and through our research. Christopher Barnard Co-Founder, President Points.com
51
the inside scoop
WHATABURGER
Q&A with Rich Scheffler, Whataburger Restaurants, LP, Group Director of Marketing.
360 had the L oyalty Whataburgerprivilege to hear from restaurants and learn about how they are showcasing the voice of their customers and employees to embrace a growing Whataburger fanbase. Through social media, a fan favorites menu and a unique advertising campaign featuring real customers and employees, Whataburger is a standout example of how listening to your fans can create a loyal following.
What motivates Whataburger when they reach out to their most devoted fans?
Rich Scheffler: Our customers are the reason for everything we do, from our quality food to our extra special customer service. We are humbled that they make our restaurants a part of their lives.
You recently announced a new advertising campaign. What drove Whataburger to take a new approach in your advertising and marketing efforts?
Our last campaign was very successful and ran for nine years, which is very unusual. We didnt need to change our campaign, as the company has shown consistent growth for more than ten years, we just felt that it was time for a change. It was time to let our customers and our employees speak for Whataburger. This new campaign showcases what makes Whataburger different. It isnt a secret sauce or a recipe locked away in a safe; its our people, who serve customers like guests in their own homes. We also wanted to extend our reach and invite new customers to fall in love with the brand.
52
What have you heard from your customers & employees who participated in the videos?
Our employees have enjoyed the opportunity, and have had many friends and neighbors comment on their stardom. The campaign has really captured the pride we wanted to convey, and given our employees another reason to be proud to work for Whataburger.
recent changes at Whataburger?

The feedback we receive from our loyal fans via social media really does impact our business. For example, we had fans beg us through social media to bring back their favorite sandwich or burger. That feedback played a big part in defining what the four All-Time Favorite sandwiches would be. Also, we have been humbled by the amount of affection we have received from our fans. People are passionate about Whataburgers culture, so we strive to build on this sense of passion and community every day. Our employees do a great job of enhancing this passion in the restaurant, and we want to use social media as a tool to build on the connection people feel before, during, and after the purchase.
When conducting the videos were there any surprising or unexpected insights?
We did have some nice surprises during the filming of our new commercials. We were so pleased at the number of customers who told us that the Whataburger team members know them by name and know each of their orders by heart. We even heard a few stories about employees who helped celebrate customer birthdaysin one case they sang happy birthday in three different languages. It was also nice to hear about the loyal customers who have been coming to the same Whataburger restaurant for more than 15 years. That really hit home to us.
We want to use social media as a tool to build on the connection people feel before, during, and after the purchase.
What drove Whataburger to create the All-Time Favorites menu? What is the goal of its release & was there any customer influence?
Our All-Time Favorites menu brings together the items that we hear about from our customers all year long. In our restaurants, in email, on Facebook and Twitter, our customers were always asking: when are these favorites coming back and why dont we have them every day? This menu was, without a doubt, for them.
What has been the consumer reaction since the new ads started running?
We launched our new campaign with a new menu, which we call our All-Time Favoritesa reintroduction of four of our legendary sandwiches, on our menu together for an extended period. The response to the new menu has been overwhelming. Weve seen a positive increase in sales and fans have posted hundreds of messages of praise on Facebook and offered positive feedback in the restaurants.
Weve noticed that even in the Whataburger news releases, sharing fan quotes and insights is an important part of your messaging. How and why is sharing the customer voice an integral part of your marketing strategy?
Customer loyalty and employee pride have set us apart since 1950, and that pride is part of everything we do. The true voice of Whataburger is our people and we always try to put the spotlight on them; letting them say, in their own words, what makes Whataburger special.
How did you go about the announcement and what has been the response from loyal followers?
We launched the All-Time Favorites menu in conjunction with our new ad campaign, which features customer and employee testimonials. It was the perfect time to showcase the All-time Favorite sandwiches as the ads feature our customersand employeestelling us why the items are so craveable. The new ads also give a behind-the-counter look at team members creating our famous burgers with fresh, high-quality ingredients and a dining-room view of customers reacting as they enjoy their favorite, custom Whataburger menu items.
In 2011, Whataburger developed a Facebook Fan page and in just a few short months had already earned the following of hundreds of thousands of fans. How are you using social media to engage your loyal following?
Whataburger uses Social Media to engage our fans by listening to what they have to say. Our fans are invited to give candid feedback through polls and comments on new products or promotions, and we share that feedback within the company. We also focus on providing our fans with exclusive information on product releases prior to the general public, so they can hear it first. Whataburgers social media presence is a space for fans to connect with the brand, each other and Whataburger employees.
What do you believe is key in building a successful relationship with your customer?
Whataburger is family-owned and operated, and has been since 1950. Today, we consider each of the millions of customers that visit us every year to be part of our family and we treat them in the same model of hospitality set forth by our founder 61 years ago. This hospitality along with our craveable menu, create the loyalty that keeps our restaurants busy throughout the south and southwest.
Whats next from Whataburger?

We are not a be everywhere, tomorrow company. Our goal is to grow through a careful and sustainable strategy, delivering positive returns for the company. By staying true to our core values and guiding principles, Whataburger has grown substantially in 2011 and will continue to open new restaurants in 2012. L
What have you learned from your fans from your social media relationships and how has this information impacted or influenced any of the
53

case study
Who Do You Love? Heating Up the Relationship with High-Value Customers

by Kathleen Diamonon, The Turning Point Group and Pam Lockard, DMN3
or years, the electricity utilities in Texas were monopolies. That changed when the state's legislature deregulated the industry. Before this, a single utility would provide electricity serviceincluding sales, transmission, and distributionto an entire area of the state. One Fortune 500 utility did just that for more than 1.6 million customers. When the utility split, the deregulated part became the area's incumbent Retail Electricity Provider (REP), responsible for customer selling and marketing. The new competitive market now had many new REPs poised to take away customers. It became akin to a dating game. This created fear about customers' exodus to other new REPs. The new REPs looked like the "cute guys in flashy sports cars" to a huge base of neglected customers who never received any love since the marriage began with their former utility. Wooing customers became critical for the incumbent REP. This was a challenge. In the prior regulated market, customer communications consisted of mailing bills and messages about service issues. In the new world, the REP's immediate goal changed to retaining top customers. With no past retention experience, the first ad hoc campaigns lacked a real retention strategy. There was not enough effort around building long-term relationships. An overarching customer retention program needed to overcome: Customer apathy about the product category No customer loyalty An intangible product Lack of company and service differentiation
The incumbent REP asked two marketing firms, the Turning Point and DMN3, to collaborate to help them reach two goals within a year: Reduce high-usage customer churn by 10 percent Create customer communication with at least a 25 percent customer recall Unlike a sale, there was no episodic event to achieve these goals. Customer retention and loyalty are the outcome of a relationship built on trust. This means going beyond the gimmicky discount coupons and non-electricity related promotions. Our client had to get to know their customers deep needs by improving communication content and frequency. They had to create a comprehensive marketing communications program that reflected key insights, offered high-level customer service, and opened a two-way dialogue to communicate customer dissatisfaction. To deepen the relationship with the customer, three questions needed to be answered:
1. Whom do you love? Or, better yet, whom could you afford to love?
We had to determine the definition of a high-value customer and align the organization around it. At the time, if you asked our client which customers were most loved; the answer was high-usage customers. However, an in-depth analysis helped to focus on other desirable traits, such as cost of service and tenure with the company. These additional filters are necessary because a
54
high-usage customer may also be a late-paying customer. So, should the preference be to focus on the high-usage customer who had also been with our client for 20 years, paid on time, and opted for paperless statements? By developing an ROI model and a lifetime valuation approach, we demonstrated the long-term impact of retaining high-value customers. For example, we found that it would take three low-usage customers to replace one high-usage customer.
into customer expectations A 5% improvement in customer database enhancements A 27% customer recall by those who received the DVD (per a follow up eight months after the mailing) A 14% reduction in customer attrition versus the control group The next touch point was a hot-weather DVD to promote paperless billing as a convenient way to go green. The results included: A 5% response rate for paperless billing A 30% recall by customers who received the DVD (per follow up six months after receiving) The first two mailings, (our first two dates in the relationship) were about building credibility, not selling. With the next mailing, we courted the high-valued customers with a priority, customer-care phone number and an Energy Analyzer. Additionally, we gave them discounts on air filters. The goal was to make them feel important. The program results included: A 38% customer recall of the priority, customer-care phone number A reduction in customer attrition by 10% versus the control group The fourth mailing focused on a two-way relationship. We asked clients to tell us if they were dissatisfied. We also asked if they wanted to be contacted by a specially trained representative for follow up. The results included: A 5% response rate More than $200,000 in revenue from the retention of previously dissatisfied customers The program results showed a 10% bottom-line reduction in customer attrition. More importantly, we created a relationship through a variety of communication strategies. Program Conclusions: Make sure you can identify the most valuable customers. Maintain focus on the most valuable customers. Realize that relationships are not built with a single communication. There is no silver bullet that ensures retention. Show customers that you value and appreciate them so that price does not become their only consideration. Be honest and sincere in every communication. L
2. What makes the best customers feel special and valued?

One company-wide misconception was that price was the only reason customers chose and stayed with a utility provider. Once we helped identify the high-value customers, our client needed to become reacquainted with them and to understand their needs and expectations.
The vice president of customer service became the spokesperson. This helped customers perceive the company as someone who cared about their feelings and opinions.
Focus groups showed that the high-value customers wanted offerings beyond price, such as special customer service. They also wanted to talk about something other than cost, such as energy efficiency. This was a new insight and paradigm at the time. The green concept was so new that no renewable/ sustainable product existed. Yet providing an energy-saving product option was important to get high-value customers to look beyond price when deciding whether to stay with their current electricity provider.
3. How do you show the best customers that you really care?
We developed a lifecycle program for our client built on two basic relationship pillars: a.) honest, sincere appreciation, and b.) special treatment. The lifecycle approach created a long-term relationship and not just a feeling you get from only one date. The lifecycle program began with a DVD about practical, low-cost tips on how to use less electricity around the home in winter months. Imagine a company telling you how to use less of their product. To humanize our client, the vice president of customer service became the spokesperson. This helped customers perceive the company as someone who cared about their feelings and opinions. It was critical to reach out to them, especially if they were dissatisfied. The results were: An 8% response rate to the feedback card with insights
2012
Predicted Trends
From Pam Lockard: An increased use of mobile to communicate to all age segments. A higher consumer expectation of transparency on the part of companies with whom they do business. A greater importance placed online customer ratings in the purchase decision. From Kathleen Diamonon: An increasing utilization of social media/mobile apps to drive customer engagement and loyalty. Customer experience roles redefined to be beyond just customer service for companies. A growing importance and integration of customer segments, multi-channel interactions, and return on investment in loyalty strategies and measurements.
55
Bing: Search, Engage, Reward

Loyalty 360 Interview with Bing
the inside scoop
ing is taking a fresh approach to the search experience, offering their user community rewards for using Bing to search and explore the web. In an interview with Loyalty 360, Bing shares the inside scoop on the Bing Rewards program. Below we learn how they have optimized the user experience, how it is engaging users today, and what fans love about Bing Rewards.
Loyalty 360: Many may be surprised to hear that Bing has a rewards program. This is unique for a search engine, how long has the Bing program been in existence?
Bing: We just celebrated our 1-year anniversary on September 22nd, 2011. Its been really exciting to see the program grow and evolve over the last year, and create a loyal, vibrant community around Bing.
How many members are enrolled in the program today?

Since launch, over 1 million users have signed up and have earned over 500 million credits toward great rewards including charitable donations, movie tickets, Microsoft Points and sweepstakes entries for items such as vacation packages and entertainment systems.
What is the program objective?

Were still pretty new to a lot of people, so we have two main objectives with the Bing Rewards program. One, we wanted to deliver a premium Bing experience that helps users discover and learn about the great features that can help them get done the things that are most important to them. Features like our travel price predictor and showing search results Liked by your friends on Facebook are pretty amazing and unique to Bing, so we want to make sure our users know they are there and how to use them. We also wanted a way to reward our most consistent, loyal users with some additional perks through the ability to earn and redeem credits, as a way of saying thanks for choosing us over the competition.
How does Bing keep users engaged in the program and with the search tool?
Certainly the ability to earn credits for great rewards is a good incentive for continued engagement with the program. But what weve found is that the more users are exposed to new and existing features, and given the opportunity to engage more directly with our brand through Facebook, Twitter, etc., we see their commitment to Bing increase as well. Its really about creating a value exchangein exchange for choosing Bing, we provide additional value through credits, user education and engagement with the brand, and we do this across a variety of touch pointsoffers, missions, emails and our social channels.
How does the program work?

Bing Rewards members can earn credits in a couple of ways. First is through basic searching. A member can either sign in directly to Bing from any of the latest browsers, or install the Bing Bar (for Internet Explorer browsers only), which gives users quick access to search, Facebook feed, news and more, as well access to the Rewards program. As a user searches, they earn credits. Second, we have daily offers, which members can discover by clicking on the Rewards ribbon icon within the Bing header or toolbar. These offers generally point out a useful feature of Bing, or point members to other ways to engage more deeply with Bing. Finally, we recently launched a member center called Bing Central, which includes missions that provide a fun way for users to explore how best to use Bing for all their needs around entertainment, shopping, travel and more.
How is Bing integrating social networks into their loyalty and engagement strategies? How do you approach these communication channels (i.e. Facebook vs. Twitter) differently?
Social networks are a big part of our loyalty and engagement strategy. As with the Rewards program, Facebook, Twitter and other social channels allow us to drive a dialogue with both potential and existing users. Were able to educate them on all that Bing has to offer, and also give them insider access to many of the things were doing as a brand. Additionally, the power of social networks is not just about a brand talking to its base, but also cultivating the dialogue between usersreally allowing individuals to become stewards of the brand in their own right and help to scale the engagement efforts.
56
What new trends or technologies today have had the biggest impact on the Bing Rewards program?
The trend around the gamification of everything has had a big impact on the program and how we think about the engagement with our members. We want to make it fun and rewarding to learn more about Bing and how to use it to make decisions, big and small. Additionally, increased sophistication in targeting and CRM capabilities has allowed us to create a more customized experience for our users.
Its also about being transparent and allowing co-participation in the brand. The more you encourage two-way dialoguebetween the brand and users, and between users themselves, the better the overall experience will be for the users. Your engagement as a brand can have just as much impact on the user experience as does the product itself.
What do Bing users love most about the Bing program? What do you personally appreciate most about the program?
Our users start with loving the rewards, of courseits always nice getting something for free. But then you start to see that they love finding out more about Bing featuresand then they start telling their friends that Bing has a lot to offer, in addition to the rewards, which is really great to see. I personally appreciate the opportunity to engage our best, most loyal customers in such a targeted, 1:1 mannerreally helping them get the most out of Bing, and then seeing these users go out and become stewards of the brand.
Many successful loyalty programs today are collecting customer data and using it to develop actionable insights which help influence the customer relationship. How does the Bing program data help to improve the overall user experience?
Because so much of the program is focused on user education, we are able to get some great insights around what features of Bing resonate with our users, which we can then include in our broader marketing activities. Weve also learned a ton about the user lifecyclewhat is the right time to introduce a specific offer, what are the right loyalty triggers along that lifecycle and how do loyal members begin to co-participate in the brand and drive advocacy. All of these insights have had an important impact on the program itself, our relationship with the broader set of users and the overall product experience.
How are todays emerging trends impacting Bing and their plans for the future? Any news or exciting offerings/updates to the program that you would like to share?
We do have a couple of exciting updates rolling out over the next few months. One in particular that launched just recently is Refer-a-friend, which give a little extra perk to users who refer friends to Bing Rewards. Weve already seen amazing uptake of this offer and were looking forward to seeing our community of loyal Bing users grow as a result. L
What do you believe is key in creating the ultimate user experience?

Not to be completely unoriginalbut its about putting the customer first. Really understanding what they need and how they want to use the product, vs. how we think they might want to. Weve made a lot of changes in the Rewards program (and certainly in Bing all-up) based on customer feedback, both in terms of how people use the Rewards program, and what benefits are associated with it. For instance, back in April we launched the ability to access Bing Rewards by signing directly into the browser, no toolbar required. This was directly related to our users feedback.
Your engagement as a brand can have just as much impact on the user experience as does the product itself.
57
LOYALTY FORUM: BOOKS
Loyalty Reads
Brand Rituals: How Successful Brands Bond with Customers for Life
By Zain Raj
Spyglass Publishing Group | 2011
Savvy business leaders and smart marketers realize that the 20th Century model of brand marketing no longer works in todays digital-led economy. Marketing today requires a clear change in perspectivefrom just driving acquisition of new consumers to a prioritized focus on retention and loyalty of existing customers. In Brand Rituals: How Successful Brands Bond with Customers for Life, Zain Raja recognized leader in the marketing and strategy spaceposits that companies and their brands have the ability to drive significant business impact by creating a bond with their most loyal customers. Raj calls this a Brand Ritual, a deep abiding relationship that customers build with brands, which becomes an integral part of their lives.
The book discusses how its no longer about consumer beliefs; its all about customer behavior. It challenges the five existing marketing myths that no longer serve us and provides a clearly defined four-stage approach to a Brand Ritual:
1. get the initial transaction with a New Value Equation 2. magnify consumer attraction by being digital at the core 3. build connections with relevant innovations and experiences 4. create a bond by aligning on core values
A higher number of bonded customers is not only possible, but absolutely necessary if you and your company want to create sustainable brands that defy competitors for decades.
Books to Know About Now

Value Creation The Power of Brand Equity
By Ron Strauss and Bill Neal
South-Western Educational Publishing of Cengage Learning and AMA | February 2008
The Brand Bucket: Make Your Marketing Work

By Barnaby Wynter
Management Books 2000 | September 2010
Why is it that some companies exhibit long-term financial growth while their competitors show erratic or declining performance? Value Creation - The Power of Brand Equity, a new book by Ron Strauss and Bill Neal, attempts to answer that allimportant question by providing a framework that empowers CEOs, CFOs, CMOs, investors and other stakeholders to better understand and manage their firms most valuable asset their brands. This book vividly describes the role of values and how those values are communicated to the marketplace through brand performance. When a firms values are aligned with their brands promise, value is created in the form of brand equity, and that brand equity can be leveraged to drive sustainable competitive advantage and superior financial performance. Because measurement and brand performance tracking are key, the authors demonstrate a measurement system that allows the brand owner to gauge brand value and brand equity and diagnose a brands strengths and weaknesses in the marketplace. Everyone who reads this book will develop a much deeper understanding of brands and brand equity: how they create meaning and value, and how they can be leveraged to improve long-term financial performance.
In 1985 SAAB Automotive commissioned a large piece of research to establish how people bought motor cars. The resulting work led to the creation of The Brand Bucket , a six-step decision-making model designed to turn potential customers into longterm customers. The approach turned out to be so successful that it has since been rolled out and applied to over 470 businesses and organisations worldwide. In the last 10 years the author has enhanced this core methodology with a number of other working tools, bringing in all the elements of the New Media and interactive marketing techniques to create a unique marketing methodology for the 21st century approach to marketing. Every company is staring at its order book looking for ways to improve it. This book shows them how. The Brand Bucket provided us with a renewed focus and mission. Julie Molloy, Marcoms Director, Bookham Technology plc
58
The Impulse Economy: Understanding Mobile Shoppers and What Makes Them Buy
By Gary Schwartz
Atria Books | November 2011
We live in a world where our mobile devices have become extensions of ourselves. We depend on them for instant connections to entertainment, social media, news, and deals. The phone has become our ticket, loyalty card, and catchall wallet. Networks are faster, phones are smarter, and the mobile shopper is ready to spend money now. What can a business do to maximize the mobile buying power of the new impulse consumer? Gary Schwartz has written a groundbreaking book that outlines the history of the mobile industry and shows just how businesses can build up their mobile platforms to maximize online sales. He'll explain: How to minimize barriers between the shopper and a sale. How marketers can connect and, more important, reconnect with loyal shoppers. The technology available nowand what's coming soonand how to pick a solution that will deliver results. But like Blink or Freakonomics, this isn't just a book for businesses. It's also an eye-opening look into the ways our economy is changing every second of every day. Gary Schwartz analyzes a phenomenon that's modifying people's actions and challenges our assumptions about our behavior as consumers. Anyone interested in the ways our behavior as shoppers is changingand what we can do to better harness this opportunitywill find this book to be essential reading.
The First NFC-Enabled Smart Book!
1,000 copies of the book will be stickered with a RFID chip allowing for any Near Field Communication (NFC) enabled phone to simply tap and engage with the books content.
UnMarketing: Stop Marketing. Start Engaging, Revised & Updated

by Scott Stratten
John Wiley and Sons | February 2012
For generations, marketing has been hypocritical. We've been taught to market to others the way we hate being marketed to (cold-calling, flyers, ads); yet we're all aware that no one likes to be marketed to. Potential and current customers want to be listened to, validated, and have a platform to be heardespecially online. This book shows people how to create a mindset and systems that perpetually attract the right customers. Instead of teaching the tired method of Push & Pray method (pushing out marketing messages, and praying people buy), UnMarketing focuses on the Pull & Stay technique (pulling your market towards you and staying/engaging with them, so when they have the need for your product/service, you're the logical choice).
Smart Business, Social Business: A Playbook for Social Media in Your Organization
By Michael Brito
Que | July 2011
The Superpromoter
By Rijn Voegelaar
Palgrave Macmillan | January 2011
Many organizations today have already evolved into social brands. They may be active on Twitter and Facebook; they may have corporate blogs and communities and they are trying hard to engage effectively with the social customer. However, behind the firewall, chaos, anarchy, and conflict reign. In Smart Business, Social Business, leading enterprise social business consultant shows how to build an internal framework based on change management that will lead to success with social media: one that will make external engagement more effective, meaningful, and sustainable. Michael Brito systematically identifies the internal culture, process and technology obstacles to longterm success with social media, and offer best practice solutions. He discusses a wide spectrum of issues, offering actionable intelligence and helping decision-makers build strategies and plans that deliver value. Topics addressed include change management, organizational models and dynamics, internal communications, collaboration, governance, metrics, training, employee activation, policies, technology integration, workflows, social CRM, and much more. Drawing on his own experience working for Silicon Valley companies, HP, Yahoo! and Intel, Brito presents dozens of examples and case studies. Using this book, companies can begin to transform their organizations from just a "social brand" to a fully collaborative and dynamic "social business.
The infectious enthusiasm of the superpromoter is vital to companies as it creates growth in customer numbers and sales. Moreover, super promoters are the ideal co-creators and motivate personnel. Ultimately struggling with his alter ego, the anti promoter, he determines the reputations of companies. The superpromoter can be a customer as well as an involved employee, or a citizen defending a specific governmental policy. They are the invisible supporters of companies and governmental bodies, behind the screens, who create success. In The Superpromoter: The Power of Enthusiasm, Rijn Vogelaar explains how you can deploy superpromoters to make an organisation more successful. He describes a new vision on marketing, product development and management in general. Now is the time for companies to stop focusing only on complaining customers and dissatisfied employees and to start concentrating on their enthusiastic friends, the super promoters. Organisations experiencing this evolution will, at a lower cost and with much more positive energy, leave their competitors behind or even render them irrelevant.
59
Sprint Loyalty & Engagement

A Loyalty 360 Q&A with Melinda Parks, Director of Marketing and Kim Whitehead, VP of Customer Loyalty, Sprint
Melinda Parks
Kim Whitehead
n 2011 Sprint phased out their Premier loyalty program, a difficult transition for any marketer to tackle. In an interview with Loyalty 360, Melinda Parks, Director of Marketing and Kim Whitehead, VP, Customer Loyalty for Sprint share the challenges overcome, plans for the next generation of Sprint loyalty, and how Sprint engages employees to empower them in the customer relationship building process.
customer newsletters. We provided a dedicated microsite with FAQs, hosted two live online chats and were actively engaged in online forums and social communities, provided dedicated call center agents to answer customer questions and were active in online forums and social communities. Another commitment we felt strongly about was ensuring our customers had a grace period to continue using their Premier benefits. At a minimum, most benefits like our accessory discount and anniversary rewards continued another 90 days. And, for those customers eligible for the Premier annual phone upgrade benefit, we extended the grace period a full year.
Loyalty 360: What lead to the decision to phase out the Sprint loyalty program, Premier? What were your considerations from a client perspective in making that decision?
Sprint: This was not an easy decision for Sprint, but in order to continue investing in the areas that customers find the most beneficial such as affordable unlimited data plans, advanced, high-tech devices that run on a state-of-the-art network and an ongoing focus on strong customer service, we found it necessary to bring the Premier program to a close. Our commitment to customers was to ensure we were transparent when talking about the reasons that drove the program close and were proactive in helping them understand what the close meant to them individually. We used multiple ways to help ensure our message reached everyone. We mailed targeted letters to customers and included notification in their invoices. We prominently announced the program close in our
Exiting a program can be a formidable challenge. What were some of the hurdles faced during the program phase out and how were these overcome?
We have a very large Customer Care and Retail agent
60
team and we needed to ensure they were well informed and prepared to address questions and concerns from our customers. Having a consistent message and being transparent with agents and customers about what drove the change helped tremendously. We didnt have one story for agents and a different story for customers. We knew we couldnt control how a customer felt about the decision to exit the program, but we could ensure they were well informed, understood why we did it and received consistent information from our agents regardless of channel.
Advocates monthly to hear their feedback. They advise us on topics of keen interest to customers, provide feedback on messaging and new concepts and candidly set us straight when they feel we are off-track.
How does Sprint engage and involve employees in the customer engagement and loyalty building process?
For us, engaging customers starts with engaged employees. We have several programs that encourage our employees to connect 1on1 with customers. Thank You Thursdays is a program developed by an individual in marketing who believed a simple hand-written thank you would be appreciated by our customers. He started by inviting employees to join him one Thursday a month in unused cafeteria space to write the notes. Since then, the entire company has gotten involved. They still hold letter writing sessions on Thursdays, but letters are also written during staff meetings and team builders across the company.
What are Sprints current goals for engaging and building loyalty with customers? How are these influenced by what Sprint learned from the Premier program?
Our loyalty strategy has always encompassed more than the Premier program. We have a three-pronged approach to customer loyalty that includes 1) keeping customers well informed about the things critical to their experience at Sprint, 2) inviting them to engage with us in a variety of ways, and 3) showing our appreciation for their business and especially to those long-time customers. We will continue to deliver on those pillars, but rather than within a formal program where some customers were in and others were out, our focus will be on engendering loyalty among our entire customer base.
For us, engaging customers starts with engaged employees.

Three other programs also invite our employees to get involved with customers: 1. Employees Helping Customers allows employees who encounter a customer with an unresolved issue to submit the customers information to a dedicated team of Customer Care agents for resolution. This helps our employees feel more confident in talking about Sprint in their community because if they find someone who has a problem, they have an easy way to connect that customer with a special team who can help them. 2. Employees Thanking Customers has been going on for a few years. The program provides employees with special accessory discount cards they can hand out to Sprint customers they meet in everyday life i.e. notice someone holding a Sprint phone waiting in line at grocery store, a service person who comes to repair the furnace or another parent at their childs sporting event. The idea is to deliver a personal surprise and delight and thank you to our customers. 3. Employees Nominating Customers allows employees to nominate any customer for one of ten $50 gift cards we draw for each month. The nomination includes a description of why the customer deserves to win. Common themes in the nominations are how a customer has been loyal to Sprint for many years or how the customer helped their friend sign up with Sprint.
What are some of the tactics and initiatives planned to support customer engagement and loyalty in place of Premier?
In 2012, we will continue our efforts to educate and engage customers with their device. We will showcase the wireless lifestyle through real people, events and life stories. We will continue to deliver a host of Just Because perks that our customers can only get from Sprint, including access to special events, sweepstakes and opportunities to be the first to try our latest devices. Our Premier online community is migrating to an all-customer community where we will continue dialogue directly with customers about topics and issues important to them.
How will Surprise and Delight offerings be integrated into customer experience initiatives?
In 2011, we delivered a variety of surprise and delights, often targeting long-tenured customers. We invited our best customers to throw out the first pitch at major league baseball games. They waved the checkered flag at NASCAR events, and we sent a couple of Chicago customers to the taping of Oprahs last showamong other perks. We will continue our surprise and delight offerings in 2012 using customer segmentation and insight to be highly relevant.
How is Sprint using advocacy to engage fans and loyal customers? How will the advocate voice be influential in the continued development of Sprint offerings outreach?
Earlier this year, we invited a group of advocates to participate in a special program. We rely on their advice and insight to inform our priorities, strategies and tactics. We meet with the
What are Sprints plans to differentiate itself from its competitors in 2012 and beyond?
Apart from the efforts mentioned above, we are focused on how we can better recognize our long-tenured customers. As an industry, we see opportunity in this space and will focus there. Also, continuing our relevant, real and open dialogue with customers will help differentiate Sprint. L
61

the inside scoop
Taking Customer Relationships to a Higher Level

by Seth Hall, VP of Customer Service at Philadelphia Insurance Companies
oyalty goes beyond a simple transaction. Loyalty is about providing a connection between a customer and a brand. It is about building a relationship whereby a customer knows their business partner will be there to support them and to provide the needed service. At Philadelphia Insurance Companies (PHLY), we are taking our customer relationships to the next level. The executive level. The Executive Sponsor Program matches PHLY executives at a Vice President level or higher with two or more insurance agency executives or policyholders. Our top 25 leaders have all been with PHLY for at least 10 years. More than half of them have been with us for over 20 years. The Executive Sponsor Program highlights this consistency which builds loyalty and confidence that well deliver. Philadelphia Insurance Companies provides property and casualty insurance to more than 80 niche business markets including nonprofits, fitness and wellness, and sports and entertainment, as well as liability insurance for several professional fields. Our founder started his company by selling specialized insurance to the deaf community 50 years ago. It is with this foundation that we continue to strive for innovation and provide a high level of customer service. The Executive Sponsor Program (ESP) began last year when our CEO challenged us to think about doing business differently. The challenge was to come up with ideas that would help us succeed in a very difficult market. In order to be successful, we had to set yesterdays bar a few inches higherwe needed to be smarter, faster and create more differentiation for our customers. We determined that by setting up this ESP, we can create this differentiation through our ability to provide our top agents and policyholders with an overwhelmingly positive and proactive service experience. 32 PHLY executives communicate regularly with 63 independent insurance agents and four of our policyholders. In addition to the benefits of our customers experience, the program can also provide ancillary benefits to our executives who dont necessarily have day-to-day interactions with our key agents and policyholders. This program is now a mechanism for personal growth as company executives now reach beyond their typical daily responsibilities and develop an understanding of the significance each relationship can hold in the service experience.
Most organizations appreciate and anecdotally understand the significance of loyalty. They understand that loyalty programs have a proven ability to increase transaction frequency and customer lifetime value. The hardest part is developing these loyalty programs that can tangibly help move the needle in a positive direction as it relates to loyalty. This program required commitment from all levels of our executive management team. After only three months, the Program was credited with securing a six-figure deal. Now six months in, we can already chalk up a significant sale due to a relationship sparked through this program. The Executive Sponsor Program is another great service that makes it a pleasure to work with PHLY, shares Morgan West, Jr., President of the Property Casualty division of Seattle-based agency Kibble & Prentice. "I appreciate having the opportunity to provide feedback directly to PHLYs leadership, and look forward to providing PHLY with solid information to continue moving forward together. Attributing sales as a direct result of this program is certainly nice; however, it isnt the main objective. The key is to strengthen our relationships with our key customers. It is all about creating the right environment to help solve our customers challenges both proactively and reactively. The ESP is intended to help tangibly showcase to our customers just how much we value our partnership. There is nothing more powerful than having our CEO, President or CFO pick up the phone to proactively check-in with our customers. We have received great support for this program both internally as well as from those that are active participants. The comments that I typically hear are that our customers are incredibly surprised that during a hectic year, our key executives would take time out of their day to call them and ensure things are on track. The Executive Sponsor Program is one way in which we at Philadelphia Insurance Companies think we can differentiate ourselves in the marketplace. It started out as a simple answer to a challenge; how can we continue to tactically build valuable and lasting relationships with our customers? Our goal is to exceed customer service expectations and we believe this program is already helping us do just that. L
2012
Predicted Trends
Voice of the Customer Programs will continue to evolve and gain traction; Social Media will continue to be an area of focus as organizations will grapple with how to best integrate this vast amount of data; Organizations will be forced into building servicing options for all of the various touch points. Companies in 2012 will need instant messaging capabilities, phone, email, text, etc. I believe in-sourcing will be another trend in 12. Overseas outsourcing has yet to deliver the benefits that were promised; that in combination with the service backlash will force companies to rethink their outsourcing initiatives.
62
20
LE
12
HIGH-TOUCH, HIGH-TECH, HIGH-IMPACT: How to Build Holistic Relationships that Drive Customer Loyalty
Marketers know that building sustainable customer loyalty is a journey that drives long-term, profitable growth. But, they want to know why and how to embark on this journey. The 5th Annual Loyalty Expo 2012 will give them the answers. Presented by Loyalty 360 The Loyalty Marketers Association, Loyalty Expo 2012 will be held March 18-20 in Orlando, FL. During this not to be missed, three-day conference, attendees will have the chance to tap into the leading thought leaders in marketing to learn about the critical challenges facing brands and walk away armed with the expert insights, tools and techniques companies need to make the journey to loyalty. A thought-provoking agenda is filled with workshops and interactive sessions from Sears, Golfsmith, Navy Federal Credit Union, Nicor, Green Mountain Coffee and many others. Peer group discussions will compliment these sessions and drill down to teach executives how to implement an impactful voice of the customer, high tech/high touch initiative to build and sustain strong relationships with their customers, employees and partners. To explore the issues most on their minds, marketers will have the unique opportunity to participate in peer-only roundtable sessions. The roundtables have been quite popular at our past events, and the number of sessions and breadth of topics explored continue to be valuable addition at Loyalty Expo 2012. The next few pages are a preview of what youll learn at the show.
Interested in attending? Register and learn more at loyaltyexpo.com!
63
LOYALTY EXPO 2012 PREVIEW
2011 LOYALTY EXPO KEYNOTE SESSION
Latest Findings in Loyalty Research: What Does it Mean for Marketers in 2012
presented by Mark Johnson, President & CEO - Loyalty 360; Tim Suther, Chief Marketing Officer & Senior Vice President - Acxiom & Pamela Prentice, Chief Researcher - SAS
Armed with the knowledge amassed during the last year, marketers are likely to call 2012 The year of customer engagement. Despite the explosion of (or perhaps because of) the daily deal space, marketers realize that customer loyalty, versus acquisition, is critical for driving sustainable growth. Whats on the horizon that will drive customer engagement and loyalty this year? In this interactive session, Mark Johnson, CEO of Loyalty 360, Tim Suther from Acxiom, and Pamela Prentice from SAS will share their thoughts on whats on the horizon in the world of customer loyalty. They will also explore their respective new research that gets under the hood of key issues impacting customer retention and loyalty including how data and analytics can drive loyalty and the behavioral, qualitative and quantitative characteristics of customer loyalty trends.
Mark Johnson
President & CEO, Loyalty 360 Mark is the President and 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.
Tim Suther
CMO & Senior Vice President, Acxiom Tim Suther is the Companys Chief Marketing Officer and Senior Vice President. Tim joined Acxiom in 2005 and is responsible for the Company's global marketing, strategy and business development activities.
Pamela Prentice
Chief Researcher, SAS Pamela Prentice has over 30 years of experience in the field of market research in the corporate arena and as a college professor. She specializes in deriving insights from qualitative and quantitative information to help address key business issues.
64
LOYALTY FORUM: BEHIND THE BRAND, EXPO SPECIAL
Zain Raj
CEO, Solution Set
President Chief Executive Officer Z ain is thePartnership,andintegrated performance of the SolutonSet MediaWhiz an marketing company, that represents some of the nations most recognized brands. His first book, Brand Rituals, How Successful Companies Bond Customers for Life, will be published in early 2012. Zain will be speaking at Loyalty Expo 2012, where he will discuss how the four stages of creating a brand rituala deep, abiding relationship that customers build with their brandscan help drive significant business impact for businesses in this new economy. Abridged article. Our interview with Zain was packed with insightful tips, marketplace reflections and best practice advice for todays marketer. Read the full interview with Zain Raj on Loyalty Management Online.
How did you get your start in the industry?

In my last year of college, we were offered a new subject called advertising. As a economics major with a CPA career in mind, I thought it would make for a fun class to break the monotony of the finance-oriented classes I was taking. Well, I fell in love with the business. Decided to interview at a couple of advertising agencies and on November 1, 1984, started my first marketing job at InterPublicity, a small advertising agency in what is now the second largest city in the world. Its an easy date for me to remember because it was the day after Indira GandhiIndias trailblazing prime ministerwas assassinated. I was so focused on making good on my first day that it never occurred to me that everything in the nation would probably be shut down. Despite curfews and widespread rumors of possible conflict, I showed up at the agencys office: enthusiastic, energetic and ready to work. I think this made a good first impression on my new boss
also saw consumers changing the way they defined their brand relationships. I was able to recognize how customer behavior was becoming more important and more sustainable in building brand preference than was consumer attitudes alone toward the brands. This is why I created the Brand Ritual approach. I have been speaking about it, using it and evolving it since. A little over a year ago, I decided to capture my thoughts in a book. And, here we are.
Who would you say has been your biggest supporter in putting the book, Brand Rituals together?
It has been fantastic to see how almost everyone I know and work with has gotten behind me on this project. Clients, colleagues, friends, and my family. If I had to pick my biggest supporter, it would be my wife, Lubaina. As the saying goes, behind every successful man is a woman. She has been a rock through the process.
Who has been your biggest professional influence?

There hasn't been one person. As Sir Isaac Newton said, If I have seen further it is by standing on the shoulders of giants. I have had the honor and privilege of working with some of the most talented colleagues, clients and partners. I have learned something from all of them.
What inspired you to write a book?

In the late '90's as I was helping dot-coms create brands, I began to see the cracks in the foundations of the basic rules of brand-building that had been in play since the 1960s. In those heady days, we were building brands in months. We saw businesses grow from infancy to global scale in a couple of years. We
What do you hope people will take away from this book?
Brand marketing should no longer be just about consumer beliefs; it should be all about customer behavior.
Brand marketing should no longer be just about consumer beliefs; it should be all about customer behavior.
66
All brand marketing must address the needs of the customer: showing how the brand is different from others in the market, so it can obtain sustainable transactions. The goal of the exercise is a behaviorto be precise, buying somethingnot just a change in attitudes. A consumer who feels good about a brand but isnt buying itis of no immediate or real value to the business. This is new ground. Weve maintained for years that the key to making consumers buy from us is making them like us. In our new time-starved, sound-bitedriven world, thats not necessarily the case. The payoff of creating brand rituals is that customers feel there is only one choiceour brand. They will insist on it, even investing some of their own limited time to make sure they find it when they want it, and do so again and again.
framework to meet todays evolving marketplace?

As marketers, we need to move our customers up the behavioral progression from habits and routines and to a brand ritualbecause thats where they become bonded to our brand. Rituals are distinguished by extremely high levels of involvementand that involvement is two-way. Just as in other important relationships in peoples lives, the principals must be able to interact capably and for their mutual benefit. That interaction, in turn, becomes part of the enriched brand experience, adding a layer of personalization to the brands basic offering style. And as the experience is repeated, as the number of interactions grows, the bonds that define the relationship are strengthened.
Rituals are distinguished by extremely high levels of involvement and that involvement is two-way. Just as in other important relationships in peoples lives, the principals must be able to interact capably and for their mutual benefit.
How do you believe the world of marketing has changed?
Marketing is being pushed by the same forces as other parts of the business. CMO's have to do more with a lot less. Less budget and less headcount. This is exacerbated by all the new channels and approaches available to them. Were entering new and largely uncharted territory in the way we identify, position, manage, and evolve brands. Well do better in exploring this brave new world if were focused on the challenges ahead of us rather than the baggage behind.
What single element is key in establishing a bond with customers?

It is to align your brand's values with values your customers hold dear. Why is this important? In the world of brands today, there is a significant level of commoditization and homogenization. Most every brand in every category has the ability to deliver on the customers needs adequately. They all provide the same features and attributes. They all are comparably priced. They are all conveniently available. Because of this parity, customers are looking for a different way to decide how they will affiliate with and which brands they will allow into their lives. This is no longer a rational decision. It is an emotional one. The one way that they decide on the emotional quotient of brands is by looking at the brands values and how they act within their ecosystem.
Any predictions for what we should expect to see for the continued influence of digital in the world of tomorrow?
Putting on my prognosticators hat, I see two major trends here. First, digital wont take over the marketing world. Consumers live in the real world. They want to interact with brands: to experience them in stores, for example. Winning marketers will understand this and cultivate a multichannel approach for serving customersand let the customers determine which channels are important. Second, technology will continue to be the biggest driver of change. This goes way beyond digital and social media. Technology genuinely puts more power into your customers hands. They will use it to be informed about, stay close to and immediately respond (positively and negatively) to your brand. And you as a marketer now have access to more tools to slice, dice and analyze the data that customer responses are giving you. That means part of your job is to befriend your inner geek so you can listen to what they are saying, and then use this to better understand and manage your brand. L
The loyalty industry today is multi-faceted, how are you defining the many faces of loyalty?
Call me a contrarian. I think theres really only one face of loyaltyand thats the customers face. Its our job as marketers to understand the many different types of faces our best customers have. Then we need to make certain were offering them loyalty programs that are innovative and a logical extension of our brand. And one of the best techniques we have for doing that is encouraging a dialogue with them and evaluating the implications of the behavioral data that they provide to us.
What would you suggest should be the number one consideration for brands in establishing a new business
67
Brand Rituals: How Successful Brands Bond with Customers for Life
Brand marketing should no longer be just about consumer beliefs; it should be all about customer behavior. Weve maintained for years that the key to making consumers buy from us is making them like us. In our new time-starved, sound-bite-driven world, thats not necessarily the case. The payoff of creating brand rituals is that customers feel there is only one choiceour brand. They will insist on it, even investing some of their own limited time to make sure they find it when they want it, use it, and do so again and again. In this presentation, Michael Grasso will share how TXU leverages behavioral marketing principles to differentiate the brand in a highly competitive, deregulated energy category. Zain Raj will challenge the existing marketing myths that no longer serve us and present a clearly defined four-stage approach to creating a Brand Ritual. 1. Getting the initial transaction 2. Magnifying consumer attraction to your brand 3. Building connections with relevant innovations and experiences 4. Creating a bond by aligning on key values.
Michael Grasso Chief Marketing Officer, TXU Energy
Zain Raj President & CEO, SolutionSet MediaWhiz Partnership
Driving Your Bottom Line with Mobile Loyalty, Marketing and More
In 2011, Forrester Research predicts that marketers and merchants will start investing in cohesive mobile marketing and commerce strategies. For many, the question is how? Come learn how Lettuce Entertain You (LEY) is using mobile marketing (messages, coupons, comp cards, etc.) and mobile gift to increase store traffic and engage with guests in and out of the restaurant. Doug Dwyre, President of Mocapay, and Michael Lynch, Director of Loyalty Marketing & Market Research at LEY, will provide insight to the following during the presentation: Why do mobile marketing and loyalty make sense for any size of merchant? What should a merchant consider with mobilizing their marketing program? How can merchants use mobile comp cards for customer recovery? How do you get customers to sign up for mobile programs? What are some of the challenges LEY faced when transitioning to mobile? What has customer feedback been? Are you seeing physical cardholders switching to mobile or is it a majority of new users?
Doug Dwyre President, Mocapay
Michael Lynch Director of Loyalty Marketing & Market Research, Lettuce Entertain You Enterprises
1 12/8/2011 2:18:49 PM
DBG-Ad-2011_v2.pdf
65
LOYALTY EXPO 2012 PANEL
Beyond the Demographic Group: Using Technology to Build Smarter Customer Segmentation that Leads to Better Retention and Returns
presented by Jen Millard, CRO - Truaxis; Charles Wetzel, CEO - Buxton Analytics; Al Montalvo, Director of New Sales & Emerging Channels - The Body Shop & Richard Last, Lecturer, New Digital Retailing - University of North Texas
Jen Millard
CRO, Truaxis
Jen is recognized industry expert with 20 years of experience as a retail operations executive. She specializes in consumer and channel segmentation, and the convergence of technology and retail innovation that improves retail operations and the customer experience.
Charles Wetzel
CEO, Buxton Analytics
Charles is the president and CEO of Buxton, the industry leader in customer analytics, advising more than 1,900 clients in the retail, healthcare, consumer packaged goods industries and the public sector on how to identify and market to their core base.
Al Montalvo
Director of New Sales & Emerging Channels, The Body Shop
Al has been the Director of New Sales and Emerging Channels for The Body Shop since 2009. In this capacity he advanced the companys vision of expanding The Body Shop brand beyond the 300 US retail boutiques.
Richard Last
Lecturer, New Digital Retailing University of North Texas
Richard is currently lecturing at the University of North Texas where he leads their new Digital Retail major, a unique program among U.S. Universities. Mr. Last has over 20 years of experience in Digital Retailing.
Customer reward and retention strategies have been stuck in the past. The lack of precision is impacting customer satisfaction and preventing optimal program incomes. What do next-generation loyalty programs need to move forward? Scalability and precision. A panel of industry experts practitioners and marketers will share their experiences, insights, and best practices on new innovations that use data to intelligently identify customers and tailor products that cultivate their long-term loyalty and advocacy, all while reducing bottom line operating costs and increasing top line revenue growth. Attendees will walk away with turnkey knowledge on strategies to increase customer for engagement and harness their full potential to drive additional growth.
70
ADVANCING LOYALTY
ADVANCING COMMERCE
Give your customers a superiority complex.
Offer the exclusive rewards and benefits that keep cardholders happy and loyal.
Provide your customers with exceptional service experiences wherever they go, with comprehensive cardholder solutions from MasterCard. Our benefits and reward programs can help you increase customer spending confidence, usage, and loyalty. And your customers can enjoy exclusive access to superior global service when they need it most. Its the kind of treatment that leaves everyone feeling a little more important.
Learn more at mastercard.com/loyalty.

Allant 2011 MasterCard. 10/4/2011 10:02:35 AM ad_loyalty 360_b.eps
MasterCard and the MasterCard Brand Mark are trademarks of MasterCard International Incorporated.
We understand the VALUE of LOYAL customers

H ere s wh a t o u r c us tomer s s ay a b out us ...
...Allant had the highest percentage of clients demonstrating extreme satisfaction across a broad range of categories...
Performance, Value, Flexibility, Strategic Contribution Score Average
5
Allant
Competitor Average
Allant delivers exceptional marketing performance through multi-channel marketing solutions driven by best in class analytic, technology, marketing strategy and program management capabilities. Visit us at www.allantgroup.com to learn what we can do for you.
Source: The Forrester WaveTM: US Database Marketing Service Providers, Q1 2011, Forrester Research, Inc., January 11, 2011 (rankings based on rating scale from 0 to 5)
DATABASE MARKETING
INTERACTIVE MARKETING
ADVANCED ADVERTISING
The Spillover Eect - Driving Customer Loyalty through Engagement

presented by Dr. Gary Rhoads, Professor of Marketing - BYU & Barbara Porter, VP Customer Service & Business Development - Nicor National
In a slowing economy, companies are missing a huge opportunity by not focusing on employees as a way to increase customer loyalty and engagement. The Spillover Effect shows how increasing employee engagement has a direct effect on customer engagement, which leads to increased sales and profits. Companies with high levels of engagement for both employees and customers are roughly twice as effective financially as those that excel in only one form of engagement, as measured by total sales and revenue. Dr. Gary Rhoads, loyalty expert and co-founder of Allegiance, will present the benefits and drivers of engagement and the specific employee characteristics that connect with customers. Barbara Porter of Nicor National will share her experience in implementing a system to monitor and measure employee engagement and correlate it with customer engagement. She will also share how she was able to document results, including an increase in sales revenue and a reduction in cost of sales due to increased employee loyalty and productivity.
Professor of Marketing, BYU {and co-founder of Allegiance}

Gary is a professor of marketing at Brigham Young University and holds the Stephen Mack Covey Professorship awarded by the Center of Entrepreneurship. As an active researcher in entrepreneurial marketing strategy, Dr. Rhoads' work focuses on identifying marketing tactics that lead to start-up success.
Dr. Gary Rhoads
IN THIS PRESENTATION, YOU WILL LEARN: Why employee engagement is critical to improving customer loyalty The drivers of employee engagement and how it influences customer behavior How Nicor Nationals positive internal culture directly impacted customer satisfaction Methods to track and measure employee and customer engagement trends Using customer, employee, and operational data to drive revenues and profitability
Barbara Porter
VP Customer Service & Business Development
Barbara Porter is responsible for a 250-agent Call Center that serves the warranty, energy management, and HVAC needs of the companys customers. Under her leadership, the Call Center team has earned the JD Power Call Center Certification for 5 years in a row.
72
How to Create Loyalty (and the Brands That Are Doing it Best)
presented by Robert Passikoff, Ph. D., Founder & President & Amy Shea, Executive Vice President, Director of Global Brand Development - Brand Keys, Inc.
Regardless of the platform used for outreach, one truth remains: an increase in customer loyalty will show up at the register. But loyalty has two sides: creating it and keeping it. Brand Keys, a global leader in loyalty and engagement metrics, will demonstrate why understanding the unarticulated ideal consumer holds in a category is critical to unlocking the emotional and rational desires that cause consumers to engage with brands and to become loyal and profitable customers. Brand Keys Managing partners, Dr. Robert Passikoff and Amy Shea will share the most recent results of the 2012 Customer Loyalty Engagement Index, encompassing 85 product and service categories, including airlines, cosmetics, social networking sites, retailers, hotels, and technology brands, and addressing 600 specific brands, including Apple iPhone, Microsoft, T.J. Maxx, Toyota, Progressive Insurance, Amazon, Dominos, and Verizon.
Robert Passikoff, Ph.D. Founder and President, Brand Keys, Inc.
Amy Shea Executive Vice President, Director of Global Brand Development, Brand Keys, Inc.
Which brands do attendees at the Loyalty Expo think have the most loyal customers?
Compare your guess for the first-place brands against Brand Keys' 2012 findings from its annual Customer Loyalty Indexa national study of loyalty and engagement in over 85 categories and 600 brands, according to the brands own customers! From these 10 categories (Airlines, Banking, Packaged Coffee, Cosmetics, Credit Cards, Midscale Hotels, Major League Sports, Movie Rentals, Pizza, Toothpaste), pick the brands you think have the most loyal customers. Those who get all ten first-place brands correct will be entered in a drawing to win a Kindle and a set of two books that offer an in-depth exploration into how to create and continue loyalty; Predicting Marketing Success: New Ways to Measure Customer Loyalty and Engage Consumers With Your Brand, and The Certainty Principle: How to Guarantee Brand Profits in the Consumer Engagement Marketplace. The short survey can be found at loyalty360.org/loyaltysurvey To be eligible to win, you must provide your contact information in the survey and be present at the Brand Key's session. Major findings from the 2012 Brand Keys Customer Loyalty Engagement Index will be announced at Loyalty Expo March 18-20 2012, at the Rosen Shingle Creek Hotel, Orlando, along with the winners of this contest.
73
Loyalty Program Optimization

presented by Jonathan Kletzel, Principal, Travel & Loyalty & John Kryczka, Managing Director, Actuarial Insurance Management Solutions Practice - Pricewaterhouse Coopers
Loyalty program membership in the U.S. has continued to increase at double digit rates over the past three years despite the lagging U.S. growth. Customers are overwhelmed with a variety of choices and it is difficult to distinguish your program among the many competitors. The challenge is to provide customers with a world class loyalty program which identifies and rewards customer behaviour while optimizing profitability. In this session, we will discuss the benefits of implementing a currency management capability. Improved measurement of redemption costs, better monitoring/tracking of customer behaviour, dynamic decisioning, and advanced marketing tactics (e.g. behavioural economics) can lower the overall cost of redemptions while delivering a higher perceived value to the consumer. We will also discuss the benefits of ongoing liability modelling to improve program decisions.
Jonathan Kletzel Principal, Travel & Loyalty, Pricewaterhouse Coopers
John Kryczka Managing Director, Actuarial Insurance Management Solutions Practice, Pricewaterhouse Coopers
COME NETWORK WITH OUR SPONSORS & EXHIBITORS

SPONSORS + E XHIBITORS
74
at US 2012 IT VIS EXPO 1 40 TY YAL OOTH LO B
Ring in the New Year with the full suite of
SVS Loyalty Solutions.
Grow Your Business Improve Customer Retention Increase Sales for 2012 and Beyond!
Our marketing list has doubled in the last six months.

Geoff Alexander, WowBao
Its time to make your sales & marketing mobile.

Mobile marketing. Mobile comp. Mobile gift. Mobile loyalty. Learn more at www.mocapay.com
Contact SVS to learn how to retain and grow your customer base with our state-of-the-art loyalty platform. Call 502-326-4600 or visit us online at www.storedvalue.com.
4120 Dumont St Cincinnati, OH 45226
20
LE
12
REGISTER NOW
start your journey march 18th
march 18 - 20, 2012 | rosen shingle creek hotel | orlando, f lorida | loyaltyexpo.com INTERESTED IN SPONSORING OR EXHIBITING? contact Erin Raese: erinraese@loyalty360.org

Loyalty Management 1st Quarter 2012 Issue

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Loyalty Management 1st Quarter 2012 Issue

Uploaded by

Copyright:

Available Formats

Volume 4 Number 1

January 2012 powered by Loyalty 360

Strengthening Customer Relationships through Loyalty Programs

Loyalty Expo 2012 Preview

Who Do You Love? Heating Up the Relationship with High-Value Customers

Does your loyalty program neeD an upgrade?

Guess who just got an awesome new smartphone!?!?!

Loyalty Management LOYALTY360.ORG 2012 BBY Solutions, Inc.

LOYALTY FORUM: IN EVERY ISSUE

Loyalty Management JANUARY 2012

YOUR BUSINESS RESULTS DELIVERED OUR INSIGHT

We see relationships di erently. Visit us to learn more.

TECHNOLOGY, TRENDS & REWARDS

BEST BUSINESS PRACTICES

Loyalty Management JANUARY 2012

LOYALTY 360 ON THE WEB

Have a department whose primary focus is Customer Retention and Loyalty

Plan to develop a Customer Retention and Loyalty department

Report an annual budget of $2M+ for retention marketing programs

TOP TRENDING CHANNELS FOR LISTENING TO THE CUSTOMER

Loyalty Management LOYALTY360.ORG

The NEW loyalty360.org

Featured Articles Found Exclusively @ Loyalty Management Online.

Loyalty Management NOVEMBER 2011

FROM THE EDITOR

Welcome to 2012 and our 3rd anniversary issue of Loyalty Management!

Welcome new Loyalty 360 Members:

we're here to guide you along the way.

Loyalty Management JANUARY 2012

Director, Deloitte Melanie Shreffler

BryanPrior to his current role, Sutowo led projects Wang

Loyalty Management LOYALTY360.ORG

LOYALTY FORUM: YOUR VOICE

What's Ahead in 2012? Executive Predictions & Insights

While social media has been at the top of all loyalty

Loyalty Management JANUARY 2011

Your Voice (continued)

We all talk about the age of the customer; I think its

Safelite AutoGlass, the nations largest provider of vehicle

Loyalty Management LOYALTY360.ORG

Beyond the like: SocIal loyalt y

LOYALTY FORUM: BEHIND THE BRAND

Loyalty Management LOYALTY360.ORG

What more can we expect from Southwest in 2012 and beyond?

Behind the Brand: Jonathan Clarkson (continued)

Who has had the most influence in your life?

What is your personal customer loyalty philosophy?

What inspires you?

Loyalty Management LOYALTY360.ORG

Direct Marketing from

Proces sing Ser v ices

R isk & C ompliance

Cus t omer & C hannel Managemen t

Insigh t s & Op t imiza t ion

2012 Fiserv, Inc. or its affiliates.

Loyalty Management JANUARY 2012

LOYALTY FORUM: 360 INSIGHTS

Customer Retention & Engagement Remain Top Challenges for 2012

Marketers will work to glean intelligence from social media feedback.

Customer engagement is the journey, loyalty is the destination.

Loyalty program is seen as critical element of life cycle management.

Mobile coupons will go mainstream.

We will see a focus on social media ROI.