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How Hyatt, Starbucks, and Domino's layer their loyalty programs for a rich customer experience

Here's the BEST article we've found about the evolving landscape of loyalty. It's short, includes valuable examples, and summarizes HOW we can build a first-class loyalty system without confusing our customers. 

Retail Touch Points: A New Approach To Brand Loyalty: How To Stand Out In The Experience Age, 2018-Mar-9 by Katherine Parsons and Darren McColi of SapientRazorfish

But what is “real loyalty” and how can a brand tailor programming to catalyze it? Following our extensive proprietary research, we explored the context behind why and how the approach to loyalty is shifting, analyzing brands on the forefront of loyalty programs that garner results and distilling our findings into actionable suggestions for brands to incorporate into their own strategies.... 

Much of Hyatt’s earn/burn model is tablestakes for the category: earn points for staying within their network/partners and redeem points for discounts/free nights, etc. However, we see a slight shift in the mechanics of the program that nods to approaching loyalty more broadly. The very notion of Hyatt’s “World of Understanding” campaign seemingly speaks to the shift we need to make, from loyalty living within organizations’ programs or departments to understanding the customer and seamlessly and naturally fitting into his or her world.... 

Starbucks blends loyalty, convenience and services through product- and experience-related benefits such as customized beverages, free upgrades, members-only happy hours, seasonal “surprise and delight” offers and “jumping the line” perks....

Domino’s rewards the spending behavior they want to encourage by giving loyalty members a free pizza for every six digital orders placed totaling $10 or more. Loyalty members also are rewarded based on engagement—those who spread their love for Domino’s on social media are eligible for up to $10,000 each in store profits! 

Based on their recommendations, here are the guidelines for developing a loyalty system in our businesses. 

  1. Think of the customer as a partner in the experience.
  2. Don't structure rewards based on what it's easy for the company to provide--share rewards that mean something to the customer.
  3. Being loyal is about staying connected, which requires consistency and two-way communication channels.
  4. Loyalty is not a program, but a plan to develop and maintain interactions with our customers. It involves every member of the company, and it should have built-in flexibility. 
  5. The best customers are not the biggest spenders but the brand advocates, and they should be invited into our inner circle. 

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W+K's Colleen DeCourcy's optimism: we're lucky to be in a post-advertising world

Last month Colleen DeCourcy, chief creative officer of ad agency Wieden+Kennedy, gave a presentation about building 21st-century brands to the Interactive Advertising Bureau. The title is "Welcome to Optimism: Brand Building in a Post-Advertising World." This idea that all the rules have changed is a familiar theme for any industry that's evolving quickly. 

I have always been fascinated by the process and results of innovation. I'm not sure innovation is something we can actually manage. Often we seem to be barely holding on for the ride. I do think that DeCourcy and W+K have put together a point of view that rings true, and their expression of these ideas in impeccable. 

"Size [of the company] is no longer your friend. It's hampering reinvention to match the shape of the market."

Think about that in context of Facebook. Then she says...

"Any move that isn't in the direction of nimbleness, emotional intelligence, transparency and collaboration, is building in the wrong direction."

If true, it would mean that the Zuckerberg approach, which is to manage the use of Facebook from the top down, with little transparency, is pretty hopeless. 

"What we have learned is that to build anything on top of what we have now is a fool's errand."

The speech contained many more fascinating ideas, and I recommend a quick read

More quotes: 

Disruptive innovation is one of the most misunderstood concepts in modern business. It's rooted in just one thing: more people having access to tools that used to be available only to people with lots of money or skill.... This one thing is the biggest thing we need to remind ourselves of every day.

More delivery, less friction.
That's the challenge we ALL have in front of us in the 21st century.

We moved from a market of things to a market of systems. 

Fear is the enemy of innovation.
I try to practice non-attachment. We all should. 

data is a form of empathy (their boldface, not mine)

The one big learning? You gotta be willing to break your process. 

The creation of a community that works in concert with the brand gives the whole endeavor a larger purpose in society. That matters.

The new W+K prescription for brand building: 

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New view of "reader loyalty" at the Houston Chronicle and other single-market newspapers

At the Houston Chronicle and other newspapers, recognition has grown that subscription growth is underpinned by "reader loyalty." Reader loyalty is different from customer loyalty (which would traditionally be measured by subscription renewals). Reader loyalty reflects higher usage of the publisher's site, and it's often connected to email newsletters. Finally, we are starting to see content being tuned to the loyal reader, instead of traffic. Whether or not this leads to greater profitability for local newspapers... remains to be seen. 

Digiday: In an era of loyalty, newspaper publishers focus on time spent and frequency, 2018-Feb-19 by Max Willens

At Hearst Newspapers’ two largest ad-supported sites, SF Gate and Chron.com, the focus has shifted from unique visitors to growing the share of readers that visit at least 10 times per month. As of last summer, The Boston Globe now pays more attention to what kinds of stories convert subscribers and what that subscriber base reads, rather than focusing solely on top-line audience size.... 

At the Seattle Times, the pageview retains some importance for the ad side, but the newsroom is more focused on tying the activity to the outcome, said Sharon Chan, vp of innovation, product and development at the Seattle Times. Local politics and sports have driven the strong conversions in the past, so in spring 2017, editors worked with consumer marketing and ran tests – putting more content on the homepage, upping the frequency of their posts, adding or subtracting video – to figure out which increased subscriber conversion rates.

The Times recently updated an internal dashboard that shows which articles lead to the most digital subscription conversions. Now, the entire newsroom can access its contents, and the paper’s editors are encouraged to take responsibility for driving conversions with their coverage. The dashboard is the Times’s latest step in a major push to grow digital subscriptions, which increased 55 percent in 2017 to over 33,000. 

Last summer, the Hearst-owned SF Gate, an ad-supported complement to the San Francisco Chronicle’s paywalled site, began focusing less on pageviews than on growing the share of readers that visited the site 10 times per month because those people are 25 times more likely to become a subscriber than someone who doesn’t, Hearst Newspapers’ president of digital Rob Barrett said. Growing loyal readership also drove more pageviews overall. 

Twenty-First Digital founder Chowning said prioritizing loyalty has moved local publishers away from national news content that’s likely to get a lot of reach on Facebook and more toward content that clearly articulates the publisher’s value. The Seattle Times, for example, has concluded that it takes 25 times more visits from Facebook to convert a reader than it does to convert a reader visiting their site via its newsletters. “We’re not going to get away from Facebook,” Chan said. “But we want to do things smartly.”

Digiday: How Hearst Newspapers changes its paywall to drive reader loyalty, 2018-Mar-5 by Max Willens

The new paywall replaces a system where editors chose which content was paywalled and which wasn’t. Under the new system, first-time readers can consume as much content as they want, and the amount they consume dictates when they hit the paywall and if or when they are shown a subscription offer.

“The whole approach is: ‘I want to win your trust,’” said Esfand Pourmand, svp of revenue at Hearst Newspapers Digital.

The subscription offers that engaged readers receive will be framed differently (though the cost will be identical). For example, sports fans might get an offer oriented around staying up to date on a team they follow, while the out-of-towner would get one telling them that a subscription will keep them connected to the goings-on of the market. The audience segments, which the papers also use for lead-generation campaigns designed to grow newsletter subscribers, are revised on a monthly basis, based on how much content a paper’s readers have consumed. 

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Content imprisonment

Occasionally I lose sight of a link I wanted to save because I shared it directly on Facebook or Twitter. Letting others own our content is deeply flawed. The new development of "decoupled" or "headless" content management systems and content containers gives me hope. 

Here are some interesting links about this topic

Austin Startups: Why modern marketers and digital producers are going headless, 2018-Jan-18 by Michelle Greer

WebInkNow: Content Neutrality From Amazon, Apple, Facebook, & Google More Important Than Net Neutrality, 2017-Dec-6 by David Meerman Scott 

Scripting News: Anywhere but Medium, 2016-Jan-20 by Dave Winer

Dries Buytaert: To PESOS or to POSSE? 2018-Feb-6

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Why, why, why... a strategy for focusing innovation to what matters most

#MonkeyFirst refers to the strategy of focusing on the biggest challenge of an innovation project. ("If you want to get a monkey to recite Shakespeare on a pedestal, you start by training the monkey, not building the pedestal.")

"Why, why, why" is a strategy for identifying the big challenges. 

Inc.: Google's Genius Productivity Hack Will Change How You Innovate, 2018-Jan-14 by Greg Satell

Talia Milgrom-Elcott of 100Kin10 points out that we have to change the way we approach problems. "You have to keep asking 'why?' Keep asking why and you start to see connections that lead to root causes that have enormous leverage and that's where you need to focus your efforts," she says.

And that's why taking a #MonkeyFirst approach is so important. Tackling the hardest problems first forces us to ask better questions and those questions can lead to vastly different approaches. Some of these will be blind alleys that lead to nowhere, but others will be game changers and permanently shift our ability to compete.

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Loyalty versus fealty

When I became more interested in marketing to customers instead of attracting new customers, I began to study the concept of loyalty. I wanted to understand what motivates people to be loyal and how their behavior can change over time and circumstances. I've come to the conclusion that loyalty can improve our lives, making support easier to find and decisions easier to make. 

Reciprocal benefits for both parties in a loyalty relationship are key. We find it difficult to be loyal to someone who has been disloyal to us. However, simple tit-for-tat behavior is not loyalty. Loyalty implies trust and commitment that enriches a relationship. Family members have a private history that builds loyalty (or not). When people make sacrifices for one another, then loyalty gets stronger. 

Fealty, or guaranteed faithfulness, demands supportive behavior from the follower toward their leader across all circumstances. We don't expect this is business, and we shouldn't in politics, either. Coerced loyalty is a nice name for blackmail, but someone who demands fealty will not hesitate to use it. 

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