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How to Compete for Loyalty

The case used to be that companies instituted loyalty programs to reduce competition. Now loyalty programs drive competition. Credit card companies will not only let you configure your terms, they will also let you put any picture your want on the card. Ability to customize = loyalty.

Marketing ROI: Is Customization an Unreasonable Loyalty Value?. 2008-May-7, by Robert Passikoff

...looking at the 57 categories and nearly 400 brands Brand Keys measures in our Customer Loyalty Engagement Index—we found that the average percent-of-contribution "customization" makes to product and service engagement, adoption and loyalty (and, therefore, profitability) is currently 18%, or nearly five times what the value was when it was first measured in 1997. ... It's something most consumers take for granted today. Of the 57 categories that make up the 2008 Brand Keys Customer Loyalty Engagement Index, the top 10 where customization has become one of the largest brand differentiators are: Automobiles Athletic Footwear Online Wireless Cell Phones Hotels Restaurants Parcel Delivery Coffee Providers Clothing Catalogs...

How to Take Care of the Goose

Is this company called Reward Paths saying that U.S. mid-sized companies apply short-term, seat-of-the-pants solutions? I'm shocked, shocked. ... For too many medium-sized companies, marketing is about driving sales and cracking those golden eggs this quarter, and not about nurturing a nice flock of golden-egg laying geese. When you establish any marketing program, especially a loyalty program, you should be thinking about how customers will relate to the program after they've been using if for five years or more.

COLLOQUY: Reward Paths enters U.S. loyalty marketplace. 2008-May-1, from press release:

Reward Paths notes that while large U.S. corporations serving consumer markets have been able to establish and afford substantial investments in rewards, miles and points programs for their best customers, the mid-size U.S. corporation, especially those serving business-to-business markets, has often been unable to secure the same capabilities and expertise at affordable costs. As such, they have relied upon undifferentiated discount programs or undisciplined and under-analyzed incentive campaigns to implement similar strategies for their best customers. Reward Paths will change that by bringing a compelling, turn-key, and affordable presence to the U.S. loyalty and rewards marketplace for the mid-market.

How to Evolve Loyal Customers by Experimenting

While the Picasso/Cezanne analogy seems to annoy people, Malcolm Gladwell's new presentation on loyalty building shows great insight. He contrasts a Picasso-like desire for immediate results with a Cezanne-like commitment to testing new ideas and "taking a journey" with your customers. He's right about one thing: customers don't expect you to be perfect, they just expect you to show a commitment to them.

1to1 Weekly: Webview: British airways Takes a Cue From Cezanne, 2008-Feb-18, by Elizabeth Glagowski

Experimental innovation (Cezanne) examples, such as Apple computers, HBO's The Sopranos, or even the Grateful Dead, deliver a lasting connection to customers and fans. "Their journey took a small audience with them, and as a result it's a relationship that's enduring and evolved," Gladwell said. In many cases the brands and customers mature together. "You want to allow customers to grow with you and build strong bonds." Unfortunately, that's not how most businesses operate, he said. In today's measure-happy climate, companies tend to throw ideas away if they don't produce immediate results.... Gladwell argues that patience is critical. "You will lose out on 50 percent of successful creativity with a 'Picasso' strategy only," he said. "We need to adjust our expectations of when we think something works." By creating a space within your organization for experimental innovation with customers, companies can balance short- and long-term innovation to allow for both types of creativity while building lasting loyalty.

How to Help your Subscribers Find the Right Fit

Just because someone is your customer doesn't mean they want to subscribe to your electronic newsletter. Nevertheless, you can dramatically improve your subscription rate if you provide newsletters which are perfect for the device your audience uses to read it. For instance, if your readers are using older displays, then having a narrow format is crucial. If your readers are very mobile, they may be reading on a Blackberry and prefer lists of text links to images and paragraphs. NextStage Evolution has just completed major research which says although relevancy and cultural connections are important, the ability to match the information portal comes first.

MarketingSherpa: How to Design Your Newsletters, 2008-Jan-30 (interview with Joseph Carrabis)

The Information Portal -- where people read your messages -- has the biggest impact (36.7%) on whether they take the action you desire. This chart underscores a key idea that recent EmailSherpa articles have highlighted: Surveying your list to see what type of device readers use to view your email is definitely worth a shot. That’s right: viewing on an iPhone, a BlackBerry, a Mac or a PC affects how they will be influenced by your message more than any other factor. Being able to segment your list according to receiving device could be a boon to your response rates.

How to Be on Your Customer's Side

Loyalty programs that only reward you when you keep increasing your spending feel pushy. For decades, the grocery industry sent us coupons based on what they wanted to push. But now with the help of dunnhumby, Kroger sends me and others coupons for the stuff we need to run our lives. They are more loyal to us so we can be more loyal to them.

Fortune: How Kroger uses a small British firm to target customers - Nov. 27, 2007. by Matthew Boyle

About three years ago, Thomas got something in the mail from Kroger, her longtime grocer outside of Cincinnati, which caught her eye. It was a pack of coupons, but not like coupons she had seen before. For starters, unlike the one-size-fits-all discounts in the newspaper, these coupons were for products that she actually bought often, like the veggie burgers her husband likes, while others were for items she might want, like those Kudos snack bars that she once shunned as too pricey and now buys regularly. It's gotten so that Thomas actually looks forward to those quarterly mailings from Kroger.

How to Suck in the Fans

If you want a model loyalty program that will show you how to suck in the fans of your product, look no further than the Dairy Queen Blizzard Fan Club. At Promo Live, they shared the fact that nearly 1.4 million members have played their online games in the past 3 years, and the latest promotion, Blizzard Sweet Sounds, is ratcheting up success with 3 million plays so far. Even more than a great web site and email newsletter, they have a great hook...an offer on every Blizzard cup to register at the web site and get a two-for-one coupon at your next purchase. Of course, you'll also get to enter your birthday, vote on your favorite flavors, etc.

How to Understand your Customer

When you have a clear system in place, you can update and evolve the system, but you don't just keep changing with the times. Everyone expected the publishers of one of the most successful email newsletters, Daily Candy, to cross platform--to build a shopping portal, to go RSS, to send mobile alerts, but that's not what their customers signed up for!

Here's what I signed up for with Daily Candy: something pretty, light and engaging in my inbox every morning.  I'm not planning to shop but to just see what's new and cool, taking a little break from my hum-drum existence.

Advertising Age: A Single-Platform Player Surviving in a Multiplatform World. 2007-Sep-3, by Abbey Klaassen: They have eschewed other line extensions, such as TV shows and print titles in favor of launching local and lifestyle-targeted versions of the newsletter....They're not even destination sites; the largest, DailyCandy.com, falls below Nielsen/NetRatings' minimum reporting guidelines of 500,001 unique visitors for all months but October 2006....said Catherine Levene, chief operating officer at New York-based Daily Candy..."What every company needs is a strong relationship with audience and marketing partners."...Its various editions today boast a collective 2.5 million subscribers (900,000 unique) and has spawned a crop of imitators.