Consider Rockets coach Mike D'Antoni... Loyalty and routines

The story of Mike D'Antoni and Starbucks is entertaining, and I'm glad Jake Fischer asked D'Antoni to explain it because it brings up some of the complexity of loyalty. Visiting Starbucks is a daily morning obsession with D'Antoni, wherever he travels. He admits that he's less in love with the coffee than the routine. 

As a great coach, D'Antoni understands the value of good routines. Sometimes that's exactly why we need more loyalty in our life. Not because the product or service is perfect, but because it fits and enhances our life. Let's be loyal for our own benefit. 

Sports Illustrated: Mike D'Antoni: For the Love of Starbucks, 2017-Nov-9 by Jake Fischer

A daily ritual emerged, reading the USA Today in between bites of his pastry and scribbling in the paper’s daily crossword puzzle. “I could not wait to wake up and go get my routine going.”


Marriott Flywheel project is integrating social into customer journey management

A huge challenge for marketers is integrating social media activity into the CRM. It's not enough to have links to the social media profiles. We need to be able to tap into the data stream coming from those profiles. Here's an excellent story about how Marriott is innovating around this challenge. 

AdExchanger: Marriott Brings Customer Hospitality To Inhospitable Digital Media, 2017-Oct-19 by James Hercher

Marriott began working on Flywheel with Facebook last year to map its 100-million-member loyalty program to Facebook targeting signals, like travel searches or when people are in an airport. Andy Kauffman, who developed Flywheel and will be promoted to Marriott’s SVP of global marketing optimization beginning in January, said he hopes to extend Flywheel into Marriott’s broader marketing and operations....

For instance, Marriott’s loyalty team, its brand marketers and a team tasked with filling empty rooms could all be disconnectedly chasing the same people.

Flywheel has helped Marriott’s marketing department de-emphasize the objectives of specific teams by providing a more comprehensive view of customer identity.

The new approach “starts and stays with the individual and should map to what we understand about that person,” Kauffman said.

Whether someone is a rewards member or has previously downloaded the Marriott app and even details about previous stays and hotel preferences should all dictate the sequence of marketing, he said. And that’s only possible when Marriott can hold a single view of identity across media.

Facebook has hosted Marriott’s Flywheel efforts so far, but the brand wants to apply personalization and tracking beyond the social platform.


Hooked on Starbucks? That app's probably not going to save you money

When Starbucks was spreading across the country, I was really excited about its culture and the way it makes it easy for people to hang out, but I could never get used to the coffee. "Dark roast" always tastes burnt to me. And they serve everything too hot for me to drink in the first 15 minutes. I still go when a friend really wants to meet there. 

Anyone interested in understanding innovation in loyalty programs should sign up for their rewards mobile app. Just be aware that it's among the most manipulative in the business. I'm not sure who is more dedicated to milking their customers: Apple, Amazon or Starbucks.  

I really enjoyed this Lifehacker article, and I will probably bring my own cup the next time someone wants me to meet them at Starbucks. 

Lifehacker: The Ultimate Guide to Paying Less at Starbucks, 2017-Oct-23 by Nick Douglas

Wean Yourself Off Frappuccinos

They’re the least bang for your buck, says Consumerist. To satisfy your sweet tooth, add syrup to a basic drink. Multiple shots of syrup cost the same as one shot.

Bring Your Own Cup

If you use your own cup, you get ten cents off, no matter the drink size.

Don’t Use the Drive-Thru

The drive-thru has to charge you for every add-on, says Consumerist. But face-to-face, baristas can give you extras for free....

Use the App With Caution

Order your drinks through the app and earn loyalty rewards. But if you’re the type of person easily tricked by an upsell—if, say, you’ve ever spent money in Candy Crush—the rewards system will backfire. Starbucks will dangle “extra” rewards points in front of you if you buy baked goods or promoted drinks. Don’t be a sucker.


Zadok Jewelers upgrades technology for better customer experience

Independent retailers like Zadok are finding it easier to provide the same level of CRM and customer service as the big chains. 

Press Release

Mi9 Retail, a leading provider of omni-channel retail software, is pleased to announce that Zadok Jewelers has selected the Mi9 Retail end-to-end jewelry suite to modernize and enhance its operations. This fully integrated, cloud-based solution includes Mi9 Mosaic POS, Clienteling, CRM, Mobile Inventory Management, Order Management, and Repairs. It also includes Mi9 Intelligence, the advanced analytics and business intelligence solution built on the Mi9 retail data warehouse.

Zadok Jewelers has been celebrated as Houston’s premier luxury jeweler for over 40 years. As a sixth and seventh generation family-run business, Zadok Jewelers is one of the last independent jewelry stores in the nation. Their Houston showroom is among the largest in the country, and their loyal customers span the globe.

Zadok decided to migrate their existing system to the newest Mi9 Retail platform to take advantage of its mobile POS, CRM, and modern clienteling technology to foster increased sales and an even greater customer experience. The addition of role-specific dashboards and the advanced analytics in Mi9 Intelligence will enable the company to be even more agile and responsive to market and customer needs. This BI platform gives Zadok Jewelers access to data-driven insights that are typically only available to the largest retailers...


Nordstrom leverages more advantage from its mobile app

I used to think that websites are pivotal for customer experience, but for retailers, mobile apps are clearly displacing the web site. Shopping for clothing and anything with a high-touch component moves the pivot point to mobile, where a user can be interactive online and in the store at the same time. Nordstrom is pulling ahead by addressing this issue. 

&THEN: At Nordstrom, mobile plans integral role in connecting in-store and online experiences, 2017-Sep-6 by DMA (Direct Marketing Association)

“We realize that customers want to shop on their terms,” Shea Jensen, senior vice president of customer experience at Nordstrom, told GeekWire. “Reserve & Try In Store is a way to help make the shopping experience easier for customers who like to touch, feel and try on items before buying them. We hope it helps combine the convenience of shopping online with a quick and efficient in-store experience.”

As noted by RetailDive, an app-using Nordstrom customer can set a preferred store, browse items available in that store, and then select “Reserve & Try In Store” to confirm a time to find out how the clothing looks and fits.

Nordstrom allows up to 10 items to be reserved through “Reserve & Try In Store” and notifies a customer within two hours (during store hours) by text message when items are ready to try on, according to RetailDive. The clothing is held in reserve until the store closes the next day.

“The combination of our physical and digital assets represents a competitive advantage,” Blake Nordstrom told Wall Street analysts. “Our local-market assets — our stores, salespeople, product and services — are the core of our brand and play an important role in engaging with our customers. Nearly 80 percent of customers who shop with us across multiple channels began in our stores.”

Nordstrom has seen positive results from its digital assets. In the second quarter of 2017, the retailer reported slightly more than $1 billion in online sales, up 21.2 percent from the same quarter last year. Overall, online accounted for 27.4 percent of sales in the second quarter, up from 23.4 percent in the year-ago period. 


How Amazon is priming the pump at Whole Foods: get ready for a gush of new loyalty tactics

When growth stalled at Whole Foods, investors demanded management changes, but CEO John Mackey's job was saved by Amazon purchasing the company. To get growth flowing again, Amazon will prime the pump initially with lower prices at Whole Foods, then try to pump members of its loyalty program, Amazon Prime, into the store. In a press release, Amazon stated, "... Amazon Prime will become Whole Foods Market’s customer rewards program, providing Prime members with special savings and other in-store benefits." 

So there's good news for loyal Whole Food customers (lower prices), and good news for loyal Amazon customers (rewards extended into Whole Foods). So, what does this mean for the grocery industry and its loyalty programs?

In one word: pressure. Kroger has been a major innovator in retail loyalty programs, and now they will have to match wits with one of the world's most aggressive companies. Walmart has generally avoided loyalty programs and may be driven to deeper price competition. Everybody else will probably be forced to change quickly as loyalty shifts. 

Advertising Age: Amazon 'Primes' Whole Foods for More Visitors, 2017-Aug-25 by Bloomberg News

"Prime customers are very suggestable and leadable, extremely loyal and spend a lot more at Amazon than others," Levin says. About 63% of Amazon customers in the U.S. have Prime and they spend $1,300 a year on goods from the retailer, compared with $700 for non-members, CIRP estimates. They purchase from Amazon 25 times a year on average, 11 more visits than non-Prime customers. The company won't say how many Prime members it has, although CIRP put that number at 85 million in the U.S. as of June 2017, about a quarter of the country's population....

About 60% of Whole Foods shoppers are already Prime members, CIRP estimates. This still leaves millions of new members to lure through those new in-store deals and the loyalty program.

..."It's an opportunity for Whole Foods to capture more wallet share of its best customers, provided the program has the right components and you really get rewarded for shopping at or visiting Whole Foods," says Sucharita Mulpuru, a retail industry analyst. Amazon's new physical bookstores have Prime tightly integrated into store transactions and they have a distinct pricing structure for Prime customers, she notes.

"It doesn't even make sense to purchase in an Amazon bookstore unless you have Prime," Mulpuru adds. "I doubt they'll be quite that drastic with Whole Foods but I do think they'll incentivize shoppers quite a bit to associate their Prime account with their Whole Foods transaction."

Wise up to Verizon Up

Verizon Smart Rewards was a disappointing program from the beginning, and in reaction to customer feedback, Verizon is launching a new program called Verizon Up. 

When the Smart Rewards program was launched we noted that Verizon's chief technology officer was actually quoted as saying Verizon's goal was to accumulate lots of behavioral data about their customers. So the goal was not so much customer retention as customer exploitation??

The new program, Verizon Up, speaks to customer preference for simplicity as well as experiential awards such as concerts and music. However, it restricts the customer tightly in three areas... 

  • In order to participate, we have to be the Verizon user who pays the bill. Other members of a family plan are not able to participate. 
  • The only way to sign up is to place the Verizon app on your mobile phone. 
  • The reason for having to sign up through the app is that you also have to sign up for the Verizon Selects 'share ALL my mobile, apps and browser usage data with Verizon and anyone it deems a partner' program. 

Verizon says you can opt out of Verizon Selects later, but we're sure most people will never think to do so. 

As Verizon is listening closely to customer feedback, I suspect that family members will be picked up eventually, although not at the same level of rewards.

Verizon Up is based primarily on the amount you spend with Verizon Wireless. Reward credits are issued for each $300 spent and would appear to expire in 60 days. That would make participation in the program challenging for us because we work hard to keep our monthly bill down below $300 a month. 

So there's one final remark that I'd like to make as a Verizon customer. The basic customer experience with Verizon is quite good. They've provided many unexpected benefits over the years to keep us loyal. We are not planning to switch, but we won't be participating in this rewards program (which isn't being marketed as a loyalty program, thank goodness). 

Android Police: Verizon Up is the carrier's new rewards program, replaces Smart Rewards, 2017-Aug-1 by Ryne Hager

Part of this new rewards program feels like a knee-jerk response to the marketing success of T-Mobile Tuesdays, but I am not sure that it offers quite the same value. Just last year T-Mobile handed out free stock in the company to its customers. As of now, that's a $60 value that might have even exceeded one's total monthly bill with T-Mobile. A $5 Starbucks gift card for $300 spent isn't quite the same sort of value.

The Verge: Verizon’s new rewards program lets it track your browsing history, 2017-Aug-2 by Chaim Gartenberg

But, as noted by Brandon Robbins on Twitter, the new program comes with a pretty big catch: you have to enroll in Verizon Selects, a program that allows the company to track a huge chunk of your personal data. That includes web browsing, app usage, device location, service usage, demographic info, postal or email address, and your interests. Furthermore, that data gets shared with Verizon’s newly formed Oath combination (aka AOL and Yahoo), plus with “vendors and partners” who work with Verizon. Which is kind of a long list of people who have access to what feels like a fairly significant amount of your data.

Fortune: Lady Gaga Partners With Verizon For Ticket Giveaway, 2017-Aug-7 by Aaron Pressman

Verizon Up... seeks to simplify giving benefits to participants and focus the very best offers on Verizon's best customers. At the [Lady GaGa] shows, Verizon customers will even have their own special seating section. Only a limited number of tickets will be given away, and participants will have to compete against each other for them at designated times in the rewards app. Other rewards will include tickets to NFL games and other major events, as well as lesser items such as several free months of Apple's Apple Music or HBO Now, or 20% off a return flight on JetBlue. Starbucks and Panera Bread are also partners.

Verizon Press Release:

“We spent a lot of time speaking to customers who were telling us they were frustrated with existing reward programs on the market,” said Diego Scotti, Chief Marketing Officer, Verizon. “They didn’t want to spend time tracking or accumulating thousands of points in exchange for trivial items. They wanted rewards that have real value and were rooted in experiences,” said Scotti. “That’s how Verizon Up came to life, it’s digital only, simple to use, rewards are constant and relevant, and it connects you with brands and access to experiences you know and love.”

Fortune: Lady Gaga Partners With Verizon For Ticket Giveaway, 2017-Aug-7 by Aaron Pressman

But Scotti says customers will be able to opt out of tracking. "For us, privacy is really, really important," Scotti says. Customers will have "choice and control," he says, and will be able to decide not to allow Verizon to collect their personal tracking data. "If you sign up to the Up program and then you say 'you know what, I don't actually feel very comfortable with you having this data' you can actually opt out and still be in the program."

From the Verizon customer site (log in required): 

Verizon Selects helps personalize your experiences and make advertising you see more useful across the devices and services you use. To do this, the program uses information about your web browsing, app usage, device location, use of Verizon services and other information about you (such as your postal/email addresses, demographics, and interests) and shares information with Oath (formed by the combination of AOL and Yahoo). Verizon Selects also helps personalize the rewards you see in Up.

Verizon protects your information and does not share information that identifies you personally outside of Verizon other than with vendors and partners who work for us.

Participation in Verizon Selects is required to enroll in Up. You can update your Selects privacy choices at any time at


Walgreens builds loyalty by improving customer experience

The Walgreens "Balance Rewards" program is now 5 years old but stays on the leading edge of technology, creating innovative customer experiences such as "refill by scan" for the smartphone. They are doing an exceptional job of merging digital and in-store shopping, with over half their app users enjoying the app while in the store. In either the app or on the web site, customers can use "Pharmacy Chat" to maintain their relationship with their pharmacist. They also encourage employees to become users of the technology, getting faster and more sophisticated feedback on new features. 

"Balance Rewards" has 150 million registered members, of whom 85 million are active. That huge base makes it easier for them to perform testing by releasing features in stages. 


How UGG is delivering an experience of gratitude in their loyalty program

Many of the least effective loyalty programs feel like a whip the brand is applying to get customers to buy more. The Great Loyalty Reset Report from 500 Friends/Merkle contains many fresh insights, but I find this insight about conveying a customer experience of 'gratitude' is the most compelling. How do we show our customers continuous gratitude? 

Loyalty 360: Most Consumers Focus Loyalty Program Attention on Five Retail Brands, 2017-Jul-6 by Jim Tierney interview of Sara Hogan, director, growth marketing, for Merkle Loyalty Solutions Group

Why is there such a disconnect between loyalty program managers and consumers?
Hogan: Fundamentally, I believe that brands see loyalty programs as a revenue generator and consumers see loyalty as a way for a brand to thank them for their business. This creates a significant disconnect. While the program manager has more consumer data available than ever before, meeting consumer expectations is becoming an increasing challenge.

From The Great Loyalty Reset 2017 report: 

Engaging with your customers is difficult if you don’t know who they are. Connecting with customers is incrementally more challenging if their purchases and brand interactions tend to occur only at limited times of the year.

At 400,000+ members strong, the UGG Rewards program is successfully addressing both challenges – and simultaneously positioning the iconic boot/fashion brand for a market increasingly influenced by younger consumers, social influence, online recommendations and built-in, seamless loyalty.... 

Today, the program not only enables and simplifies data collection, it rewards consumers for providing it. At sign-up, the rewards program now captures basic data about customers – name, age, location, mobile number, email and optional information, such as birth date.... They earn points when they sign up, link social media accounts, post on Twitter or Pinterest, create or share a wish list, or post an online review, for example. 


Penney's new loyalty program shows the pressure of shopping behavior

While we would appreciate having the loyalty of our customers without paying attention to the competition, we have to admit our customers almost always know what our competition is doing. A study recently published by McKinsey & Company makes it clear: in women's clothing, 82% of purchases are shopping driven, not loyalty driven. Read more about shopping behavior in many categories. 

Dallas News: J.C. Penney tries to capture the best of Kohl's in new loyalty program, 2017-Jul-10  by Maria Halkias

The department store chain studied the hospitality and travel industries and its retail peers, while asking customers to rank features that were most important to them, said Sherina Smith, vice president of loyalty and customer relationship management.

"Customers didn't like having a limit on how many $10 rewards they can earn or that points expired," Smith said. "That's not a way to drive loyalty." Penney lifted a cap on the number of $10 rewards shoppers can earn in a month. Those rewards are good for 60 days. Members-only prices and shopping events have been added where shoppers can earn rewards faster.

Penney's rewards customers shop and spend more than twice as much as the retailer's other customers, and 66 percent of Penney's sales comes from rewards customers, Smith said. The goal also is to increase the number of Penney credit card holders, she said, which is now about 40 percent of its customers. In the new program, Penney credit card purchases earn twice the points of other types of payments.