Wise Marketer sponsor Maritz Motivation Solutions, a leading provider of loyalty programs to major companies and brands, has introduced decision sciences to the loyalty space, providing marketers with next generation insights to predict consumer behavior. Decision sciences combines traditional data analytics with behavioral science to uncover leading indicators so marketers can “read between the lines,” predicting customer defection before consumers even know they are thinking of disengaging, said Barry Kirk, vice president of loyalty solutions for Maritz Motivation Solutions.

While Maritz utilizes its expertise in neuroscience across the company, the company’s application of decision sciences specifically to yield insights in the loyalty space is new, Kirk said. Decision sciences integrates cutting-edge machine learning and behavior science to understand consumers at a far deeper level, he said. Money quote:

“Maritz decision sciences is the next evolution of loyalty analytics. Traditional analytics treats customers as rational actors, who make every decision on a cost-benefit analysis. We know this simply isn’t true. Brand choices are always a combination of rational and emotional drivers. With decision sciences, we help marketers intervene and retain customers before they have mentally checked out.”

Machine learning is a form of artificial intelligence (AI) that enables analytic systems to learn progressively as they are fed increasing amounts of data, yielding an ever-richer understanding over time. The company’s decision sciences offering combines this AI-driven analysis with Maritz’ years of experience in the field of neuroscience and behavioral economics, interpreting the data in the context of human behavior, to help marketers predict how consumers will behave next.

“Traditional predictive models used in today’s loyalty programs often fail because customers are humans, not robots. Our new decision sciences group sets apart our loyalty solution, LoyaltyNext, allowing us to see ahead and design experiences based on what program customers actually want and what they are most likely to do,” said Jesse Wolfersberger, Maritz Motivation Solutions’ senior behavioral economist.

Services offered by the new group include:

• Strategic Design Assessments: Decision sciences analysts evaluate the structure of your program and make data-driven recommendations.
• Predictive Modeling: Using cutting-edge machine learning tools, decision sciences analysts create algorithms which predict customers most likely to engage, disengage, spend, defect, or any other behavior pertinent to the program.
• Conjoint-Based Research: Provides a window into customer preferences and their likely reaction to multiple program change scenarios.
• Persuasive Design Labs: Expert-facilitated experiences through which marketers are able to apply data and behavioral sciences tools to quickly iterate evolutionary changes to a loyalty program.
• Dynamic Segmentation: Using advanced clustering methodologies, decision sciences analysts segment your customers based on behavior, allowing for targeted communications, custom strategies, and a more efficient marketing spend.

This content is sponsored by Maritz Motivation Solutions. For more information on partnering with Maritz Motivation Solutions, visit them here, subscribe to their loyalty marketing blog, follow them on Twitter or call 1-877-4-Maritz (1-877-462-7489).

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Customer loyalty is arguably more important in business-to-business (B2B) industries than it is in consumer industries. That’s because, in B2B firms, the 80-20 rule is sometimes the 90-10 rule: the top 10 percent of your customers can account for 90 percent of your profits. The good news: by identifying the key purchasers and influencers in your client organizations and then building relationships with them that mimic relationships in the consumer world, you can increase the retention, yield, and lifetime value of your best customers. That’s the message from David Harwood, co-author of the Essential Guide to B2B Loyalty, published by the Wise Marketer. You can subscribe to the Guide here.

By David Harwood

 

Loyalty marketing was born in the consumer world. When American Airlines launched the AAdvantage programme in 1981, the frequent-flyer program was so revolutionary that it literally changed marketing overnight. For the first time, a company used a customer database (the airline reservation system) to segment, reward, and recognize best customers for their loyalty. The AAdvantage program also introduced the concept of rewarding the airline’s most valuable customers through both hard benefits – frequent-flyer miles that could be redeemed for a free flight – and soft benefits – upgrades to first class for high-value members. The idea that consumers respond to both reward and recognition with increased loyalty, born in the airline industry, soon spread to every consumer sector. Today, these principles form the foundation of the loyalty marketing discipline.

At first glance, reward and recognition would appear to be an ill fit for the world of B2B marketing. B2B business-client relationships are often more complex than those in the consumer world. Instead of marketing to a single customer, B2B marketers are often dealing with a connected web of relationships: in some cases selling directly to small business owners; in other cases, selling to purchasing managers within large companies, who must in turn answer to department heads with their own preferences; and in others selling to end-users indirectly through distributors or channel partners. In such a complex environment, how can loyalty marketing help?

For the most part, business-to-consumer relationships are simple and direct: the business advertises its products and services, the consumer makes a purchase, and the business can then begin a direct relationship with that consumer. In the B2B world, actual buyers are often hard to identify, and relationships can be both direct and indirect. B2B marketers must therefore engage in detective work to uncover the buyers and influencers within their client accounts. Here’s a primer to the five basic types of B2B customers and the keys to building relationships with them:

• End Users: If you sell direct to small business owners, then identifying your best customers and rewarding them is relatively straightforward. If you sell primarily through partners and distributors, or primarily to larger companies, then identifying your actual buyers can be difficult. A B2B loyalty program can encourage your buyers to raise their hands and ask to be identified.
• Purchasers: If you sell into larger organizations with procurement departments and purchasing managers, then you’ll need to know who they are. These purchasing managers may have leeway to choose you, or they may be bound by contractual purchase agreements. Identify these purchasers and then reward and recognize those who demonstrate loyalty to you.
• Influencers: Influencers are your “hidden” customers – they’re IT directors, senior corporate managers, and other mid-level corporate executives who exert a profound influence on the purchasing decisions of your clients. A value proposition based on content marketing can help you reach this group – just make sure you encourage identification, so you can market to them on a one-to-one basis.
• Distributors: Many B2B companies sell their products indirectly through wholesalers and distributors. These distributors often have a choice between stocking your products and your competitor’s products. A loyalty program designed to reward and recognize your key distribution clients can provide an effective way of building relationships with them – and shifting their spend to you.
• Partners: Larger B2B companies often align with strategic channel partners that help them enter new markets or geographies. While many channel partnerships are negotiated at the C-level, you can often work with your channel partners to extend your loyalty program into their markets. Make them an explicit partner in your customer loyalty efforts, and your partners too will reward you with their loyalty.

The answer our earlier question: loyalty marketing can help you build stronger and more profitable B2B relationships. The key to success is to find those purchasers, managers, and influencers within your client accounts and then leverage the tools of loyalty marketing to reward and recognize them for their loyalty. First, put a value proposition on the table to encourage them to raise their hands and identify themselves. Next, start a conversation with them, and then leverage the resulting insight to segment them according to value and potential to your business. Finally, leverage the tools of loyalty marketing to foster profitable behavior change. By uncovering the consumer inside your B2B accounts, you can build customer loyalty that lasts a lifetime.

David Harwood is founder and CEO of Reward Paths in the US and Incentive Solutions in New Zealand and Australia. This article is excerpted from “The Essential Guide to B2B Loyalty,” written by David Harwood and Rick Ferguson and published by the Wise Marketer. You can subscribe to the Guide here.

 

 

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Over the past few decades, businesses and brands have come to understand the importance of charitable giving to customer loyalty. Research shows that consumers – particularly younger ones – are loyal to brands that support causes they believe in. The difference between corporate giving efforts of old and today’s more nimble giving platforms is the ability to place control of corporate giving in the hands of your best customers, and building loyalty with them by facilitating giving to the causes that matter to individual customers. The future of corporate social purpose is one-to-one – and no company understands how to facilitate one-to-one giving better than KULA. For this month’s sponsor spotlight, we ask KULA CEO Alan Goldstein how companies can best leverage the future of one-to-one giving.
Q. Tell us a little about KULA, and about the company’s mission.

Goldstein: KULA was founded in 2011 as a loyalty platform that allowed loyalty program members to donate loyalty currency to the cause of their choice. Our first client was JetBlue, and over the years we delivered solid giving programs for clients such as Coca-Cola with MyCoke Rewards and Kellogg’s with their Family Rewards program.

When I joined KULA in 2015, my task was to help the company scale the platform. We looked at our business model and ask ourselves, how can we help the most? Our focus then turned naturally to the causes themselves. From the biggest causes to small non-profits and local schools, every cause needs help raising funds. Traditional fundraising takes a lot of time, effort, and volunteers. How can we leverage our loyalty platform to help causes raise money, while at the same time benefiting the brands we work with?

Focusing our efforts on the causes themselves led us to create a platform specifically designed to help them raise money more easily by facilitating loyalty points donations and shopping activities that provide cash-back donations. It’s a much easier way for non-profits and schools to raise money. Because our platform is free for causes to implement, it delivers return in lower cost per dollar raised.

For the brands we work with, we can help them drive acquisition by sending them new customers to shop in exchange for donating a portion of their spend to the causes they support. And we can drive loyalty by helping their loyalty program members facilitate giving through currency donations. It’s a frictionless ecosystem that benefits causes, consumers, and brands alike.

Our mission now is to become a leading channel for marketers by being the number one fundraising platform for causes. In essence, we’re creating a new marketing channel for brands that we call “cause loyalty.”

Q. It’s interesting that you use the phrase “cause loyalty” to describe this ecosystem. How do you see cause loyalty as a tool to help brands drive customer loyalty?

Goldstein: Traditional cause marketing is simply a brand supporting a cause. Most consumers understand that brands do this – but that support is primarily a function of corporate social responsibility. It’s not a marketing plan. “Cause loyalty,” in contrast, is a marketing channel that allows brands to build a relationship with their customers based on facilitating giving to the cause of their choice. You’re building a connection point with your customers based on a strong emotional appeal, and that connection point can help you build real loyalty with them. It used to be that brands couldn’t write checks to 1.5 million individual causes. Kula does that every day.

Cause loyalty can also help facilitate relationships throughout the purchase cycle. Because our database includes over 1.5 million 501c3 causes and 120,000 schools, participating causes can drive consumers to brands that facilitate giving through our platform – that’s a real acquisition effect, and it helps the brand begin a real relationship with that consumer based on something other than a discount offer or promotion.

Q. How does cause loyalty work within the context of a loyalty program?

Goldstein: For loyalty program operators, cause loyalty can help build engagement within the program by facilitating lower-level redemptions that actually have real value and meaning to members. Most loyalty programs today have liability on the books from millions of unredeemed points, and much of this liability is driven by members who never earn enough points to redeem for a reward of meaningful value. Meanwhile, most research shows that the most effective way to build program engagement is to help members redeem for something meaningful within the first few months of membership. Our platform solves both the liability and engagement problems – members may not care about redeeming for trinkets or a few dollars off their next order, but they do care about donating a few dollars to their local school. Over time, and with many local members participating, those simple redemptions can lead to the construction of a new school playground.

That simple act of giving, facilitated by our platform, can lead to real program engagement. Knowing that every time a customer shops with you, a few dollars will go to that school that’s so important to them, keeps them engaged with you brand in a way that a few dollars in cash-back rewards, or a few points in their points bank, can’t match. The “double bang” of earning a meaningful reward quickly and donating to a personally relevant cause leads to real program engagement.

Q. What are some effective tactics that brands can use to help drive that engagement?

Goldstein: We believe that the best time to engage a member in cause loyalty is when they join your loyalty program. By giving a new member the opportunity to pick a cause of their choice, then the member will be more engaged with the program right away. One of the most obvious causes of member disengagement is a member who earns points in the program but then never redeems them. By encouraging them to support a cause right away, they’re more likely to keep your program top of mind. And if you include such tactics as auto-redemptions – opt-in and we’ll make a regular donation on your behalf, then the member will be even more engaged because they know those lower-level points balances are going to support a cause they believe in.  And as the donations roll in, the cause can associate the donations to the brands who make them.  This makes their supporters more likely to repeat purchase.

Another great tactic is to reach out proactively to members with low points balances when those points are nearing their expiry date. Instead of offering them a magazine subscription, offer them the chance to contribute to a worthy cause. This tactic allows you to take a negative program experience – expiring points – and turn it into a touch point that builds engagement and may even reactivate a lapsed member. It gives you the opportunity to build a sticky relationship.

A third tactic – and our platform now facilitates this option – is to encourage members to round up their redemptions with a donation. When a member redeems for a big-ticket reward, very often there is a small points balance left in their account. We can offer this member a code to enter online at Kula to donate the remaining points to the cause of their choice.  Not only does this keep the program liability down, it’s also another great way to reinforce your program’s value.

Q. How do you see cause loyalty evolving in the next few years?

Goldstein: We are moving to activity-based earning: Act, earn, and donate. Ask your members to take a survey, test a product, or even achieve a fitness goal tracked by a wearable device. When you complete the action, you earn points to donate to your favorite cause. This ability to earn while doing changes fundraising, and it changes the value of data to brands. In fact, the ability to supplement your segmentation via data from our platform is really a value add to brands – if you know that school fundraising is important to a high-value customer, or that they probably love dogs because they donate to an animal shelter, or know they have a family because they donate to family-oriented causes, that’s valuable data that your competitors won’t have.
We’ve also talked with brands about running a specific sub-brand loyalty program dedicated to cause loyalty. You’ll be able to build a community within your program of like-minded members that are highly engaged with you. We’ve also talked about a non-currency coalition program that allows causes to link directly into loyalty programs that facilitate donations via receipt scanning or another mechanism. Each brand would own its customer experience while benefiting from the cross-shopping and other valuable data integrated into our ecosystem.

We believe that cause loyalty has a great future. Research shows that younger consumers are very cause-oriented and seek out brands that support those causes. While young people are rallying around causes, government funding of those causes is drying up, so there are a lot of causes out there in need of support. Most consumers are time-starved and can’t volunteer as much, so they end up just writing a check, if they even have the time or financial resources to do that. Kula’s platform removes the friction of giving by allowing them to shop and earn with their favorite brands. It really is a new marketing channel, and a thriving ecosystem that benefits consumers, brands, and causes alike. We’re proud to be able to deliver on that promise.

Alan Goldstein is CEO of KULA. This content is sponsored by KULA. For more information, please visitwww.kula.com.

The post Spotlight Q&A: Alan Goldstein, KULA appeared first on The Wise Marketer.

Over at Hotel Executive, commentator Allison Ferguson highlights one of the most critical misses in hotel loyalty programs: the inability of operators to use program data to personalize rewards, demonstrate empathy, and create memorable moments that build real relationships. Demonstrating customer memory is arguably the most important distinction that hotel brands can create to shift customer share away from online travel agencies (OTAs) and Airbnb – so what’s preventing them from doing so?By Rick Ferguson

Ferguson (full disclosure: Allison Ferguson is married to Rick Ferguson – this article’s author. Her company, 500friends, is also a sponsor of the Wise Marketer) outlines a scenario common to any frequent traveler: no matter how many times you stay at a particular hotel brand’s properties, and no matter how long you’ve been a member of their program, the hotel brand seldom, if ever, demonstrates knowledge or memory of the relationship. This scenario is true even if you repeatedly stay at the same property. With hotels competing for market share with OTAs and Airbnb, using customer data to demonstrate relationship “memory” is the most critical opportunity for hoteliers to succeed. Money quote #1:

“Here’s the problem: While there’s no question that hotels are focused on data, most have yet to demonstrate the ability to leverage that data on a personal level. Hotel companies often do mine the wealth of “big data” in their organizations to optimize pricing, forecast demand, or determine where to locate the next hotel. What often doesn’t happen: the deployment of “little data” to build customer relationships through touchpoints before, during, and after the hotel stay.
“In the age of online travel agents (OTAs) and Airbnb, with consumers enjoying more choice despite industry consolidation, hotel companies must capture and realize the power of customer-centric data to change the conversation. The most effective way to do so: demonstrate “memory” of your customer relationships by using customer data to demonstrate:

• “Personalization – Deliver better offers and promotions to me and personalize my experience
• “Empathy – Anticipate what I might need when I’m traveling
• “Memorable moments – Create moments that build anticipation for future stays

“Without this ‘persistence of memory’ in the value exchange, it’s difficult for a brand to demonstrate commitment to its best customers. And without that demonstration of commitment, it’s difficult to build sustainable loyalty.”

To leverage loyalty program data to deliver on this commitment, Ferguson recommends the following solutions:

• Personalization: Deliver personalized recognition, rewards, and recommendations to members based on their travel behavior and stated preferences.
• Empathy: Use data both during the booking process and at the property level to anticipate guest needs and respond them – often before the guest even thinks to ask.
• Memorable moments: Ferguson illustrates that a memorable moment doesn’t have to be a complex one.

“Sometimes it’s not how sophisticated your data use is, but how simple. A single piece of past stay history, for example, can create a simple but memorable check-in experience. One example: a simple “yes” or “no” flag on the PMS indicating a past stay at a hotel. If “no,” then I get the standard welcome with the request for ID and credit card. If “yes,” then I get a “Welcome back” greeting, and perhaps a surprise-and-delight reward. The result: a small but memorable moment.”

These lessons are, of course, applicable beyond the hotel industry. Demonstrating memory is of critical importance to any customer relationship; it’s how you encourage a customer to move beyond transactional loyalty to something closer to advocacy. Customer data is the fuel, and your loyalty program is the engine. No reason not to fire it up and get moving.

Rick Ferguson is Editor in Chief of the Wise Marketer Group.

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Ellipsis specialise in Customer Experience Management and Loyalty. We help our clients become customer centric, because we believe getting this right is crucial to creating value.

Our name represents the essence of what we do: we help our clients complete their unfinished understanding of the customer. We use a combination of consulting and best-in-class technology to deliver an exceptional end-to-end service.

Our Services:

Our services are built around your program needs, from initial design to implementation and optimisation. Services include:

• Customer strategy
• Data & systems diagnostics
• Customer journey mapping
• Customer segmentation and profiling
• Voice of customer programs
• Loyalty program design
• Lifecycle marketing strategy
• Financial modelling and reporting including Return on Loyalty®

Whether you are just beginning your journey to customer centricity, or already on your way, we can help at any stage.

To learn more contact us. We’d love to help you so please get in touch.

You may also like to follow us on LinkedIn and Twitter

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Loyalty marketing is undergoing a period of revolutionary change – change that will require a new generation of leaders to evolve the industry to leverage today’s powerful analytical tools to build strong relationships with best customers. In this month’s sponsor spotlight, we ask new Maritz Motivation Solutions president Drew Carter about the transformation of loyalty from a marketing program to a strategic imperative that sits at the center of both the brand promise and the customer experience. His message: Watch out, because the pace of change will result in both unprecedented challenges and unmatched opportunities in the decade to come.
Q. Can you tell us a little bit about your background, and what attracted you to join Maritz Motivation Solutions?

Carter: For the past six years, I’ve been at AlixPartners working with companies on digital transformation by helping them move from intuition-based to data and insight-based business decisions. One of the biggest levers available to companies seeking revenue growth is marketing – in all its flavors, from brand marketing, to transaction-level marketing, to employee engagement and sales force effectiveness. The work I’ve done for clients to improve marketing effectiveness typically focuses on all elements of performance-based marketing, including loyalty programs. I’ve also helped clients understand how to incorporate data science and machine learning into their marketing strategy to drive growth.

That’s the arena where Maritz Motivation Solutions competes. When I spoke with Steve Maritz and got to know the company, three aspects of the business strongly attracted me. First, Maritz offers a world-class software platform that drives relationships with more than 100 million customers and can serve as the foundation for operating complicated loyalty programs on a global scale. Second, I was impressed with their client base of marquee brands that add value to the business. Third, Maritz’s ability to execute on strategy is unmatched: our decision and behavioral science teams can drive ROI better than anyone, and our creative groups are first class. These abilities enable us to be both a turnkey solution provider and a strategic partner to our clients. At the same time, there’s so much market share available and so much white space for us to help clients activate additional value from their marketing efforts. This combination of capabilities and opportunity is exciting, and I’m happy to be a part of it.

Q. What are the major challenges you see brands facing today in trying to earn customer loyalty?

Carter: A loyalty program should start with a brand positioning. In the past, I’ve seen companies identify an economic challenge and think that a loyalty program might be the solution. The CMO assigns someone to create the program, and that person proceeds to check the boxes: we’ll have a points program, we’ll give away stuff, and we’ll be done. The result is something like what happens with kids playing the telephone game – by the time the company gets to the program execution stage, they’ve lost their way, and the program design is divorced from the economic challenges that created the need for it in the first place.

In contrast, successful loyalty programs are more than a collection of marketing tactics; they’re a core part of the company’s brand and its reason for being. These programs marry the brand promise to customer relationships to deliver both message consistency and an experience that delights customers in every way. Instead of just checking boxes to create a simple transaction-based loyalty program, create a program that sits at the heart of your experience delivery. Instead of a loyalty program, create a loyalty experience. Doing so requires a long-term vision, and some folks need some help transforming what might be a decent loyalty program into something that fulfils that vision. That’s where we come in.

Q. Rewards have always played a significant role in the loyalty equation. Do you see them remaining as part of the tool set?

Carter: Here’s an analogy. Most of us have had experience in digital marketing metrics – take media mix modeling, for example, in which you’re measuring the impact of both traditional and digital media together. One of my clients was a credit card company engaged in only digital media mix modeling; they decided their display ads were ineffective and killed them, and in the middle of my analysis I see an entire data set go dark. But when we looked at the whole integrated system of digital marketing, we could see the halo effect of those display ad impressions right in the middle of our model and quantified a five-to-one impact. So we turned them back on.

In my opinion, digital marketing gives you false sense of precision, and I think the same thing is true of rewards. We’ve relied solely on rewards in the past because the results are easy to observe and we can measure their impact on behavior. If you rely solely on rewards to drive behavior, however, then you don’t really get a full view of the customer – you only get a glimmer. Today, we need to place rewards in their proper context as one part of a holistic loyalty experience. We will always want to reward our best customers, but doing so will require us to evolve our understanding of rewards – to move beyond traditional models of rewards, and to incorporate new models to measure their impact – to maximize their ROI.

Q. How big a role do you see decision sciences playing in the future of customer loyalty?

Carter: Ray Kurzweil said that we always underestimate the pace of technological change, and I think that’s true of decision sciences as well: the pace of change will continue to surprise us all. I used to run a decision sciences shop at one of my former companies. We built predictive models based on machine learning, things like trying to understand who was most likely to buy a car in the next 90 days. In most cases, we can be fairly accurate, but traditional decision science stops at the point of prediction – at that point, you resort to testing a mix of marketing offers to see what works.

With the accelerating abilities of AI and machine learning, we’ve now converted so much of corporate decision-making to algorithms, to the point that we think traditional decision science has made us omniscient – but we’re not, because in many cases we still don’t know what to do about the predictions we’ve made. Now, we’re about to see a rapid evolution of decision science coupled with behavioral science, and this combination will transform marketing. We’ll be able to understand not only what behavior we’re likely to see from our customers, but what to do about it. We’ll develop a heuristic approach to predictive analytics to understand what levers work best to drive customer engagement – and it will be like igniting nuclear fusion.

Q. How will our traditional approaches to loyalty marketing need to change to address these challenges?

Carter: As I think of it, loyalty marketing is a subset of customer experience delivery, or CX. One of the first steps to transformation is to stop being transactional and short-sighted in loyalty program design, and to align your loyalty experience delivery with your brand promise. I was at a client meeting recently in which the internal team was very excited about offering customers a $25 voucher on their birthday. When I asked the program champion, ‘Is this tactic really what you’re excited about?’ she had to admit that the answer was no. Transformation requires us to step away from building transactional loyalty programs and thinking of them as part of the holistic customer experience. Stop assigning loyalty marketing – one of the most potent marketing systems we have – to transactional-minded thinkers, and assign it to a true customer champion. Embark on this journey now, and in ten years you’ll be amazed at the transformation of your business.

This content is sponsored by Maritz Motivation Solutions. To learn more about Maritz, please visit them here.

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This month and all through October, we’re launching our Wise Marketer Spotlight series of white papers with the launch “Loyalty 3.0: The Future is Now” by rDialogue CEO Phil Rubin. To whet your appetite, we’re publishing this white paper preview to give you a taste of Phil’s insight. To download the complete white paper, go here.

By Phil Rubin

With advances in mobile marketing, big data. and Internet of Things (IoT), customer marketing has reached a crossroads:  Continue the status quo, or take a new approach. An increasing number of customer-centric brands emphatically opt for the latter road. The new Loyalty model starts with a 180° turn: rather than customers proving their loyalty to brands, it’s time brands demonstrate their loyalty to customers.  Call it the “Amazon-ification” of loyalty marketing.

Customer-centricity is not new to Amazon. It was explicitly shared in the company’s shareholder letter in 1997, after it went public.  It’s also worth noting that back then Amazon had just achieved a record $115MM in revenues and recognized that “www” stood for the “world wide wait.” Amazon set a clear go-forward strategy, obsessing over how to meet the (then latent) core customer need for immediate gratification and simply making it easier to buy things. They set about building their business to meet this core need from their logistics footprint to their checkout process.

Over the past 20 years Amazon, has done three things that are fundamental to Loyalty 3.0. These three things are essential best practices and requirements for any loyalty marketing strategy:

1. Make customer-centricity an explicit and consistent business strategy. Leadership, starting with the CEO, must be steadfastly committed to customer-centricity.
2. Use data aggressively to deliver relevance, recognize customers and, in turn, make it increasingly easy for them to do business with you.
3. Recognize that customer loyalty drivers are much more than just financial. They are experiential. Think IoX (Internet of Experiences), not IoT.

None of these three things fall in the category of rocket science.  They are common sense, and reflect what you might think of as a “Golden Rule” of loyalty marketing:  treat customers the same way you want and expect to be treated.  Remember, Peter Drucker said that the purpose of any business is to create customers. Hence, it is essential that retaining customers is necessary to achieve organic growth.

We have adopted the term “Amazon-ification” for this approach as we believe it embodies the core of both the definition of loyalty marketing – paying attention to customers and acting accordingly – and what we as humans seek from those we invest with in relationship building.  We want and appreciate others thinking about us as it makes us vested and likely to think similarly about them.  It is the same way with brands.

No one is going to catch up with what Amazon has spent two decades doing and continues to do. Rather than trying to follow Amazon and its specific strategies, brands need to understand the loyalty drivers in place and apply them to their own businesses. Loyalty 3.0 is what we believe will facilitate a brand-centric mechanism to establish a new business paradigm that brings the brand and customer together in a mutually-beneficial relationship. But don’t take our word for it; try it yourself. Loyal brands, companies with leadership that without exception prioritize the customer as part of a business strategy, create loyal customers.

Phil Rubin is CEO of rDialogue. To download the full white paper “Loyalty 3.0: The Future is Now,” click here.

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For most loyalty programs, the biggest consideration is the construction of a compelling rewards offering. The reasons are obvious: The promise of a meaningful reward is what draws a consumer to consider your program and drives their continued engagement, while the rewards budget is the largest budget outlay for any program. In this spotlight article from Hinda Loyalty Group, Gregg O’Neill and Theresa Thomas outline the best practices for balancing reward engagement with the financial health of your loyalty program.

By Gregg O’Neill and Theresa Thomas

In the early days of loyalty marketing, managing reward portfolios was easy; we printed catalogues, mailed them to program participants, and hoped they didn’t redeem. Today, the advent of technology, mobile devices, data analytics, and savvier consumers have made the loyalty marketer’s job much more challenging. These complexities can, however, be offset by partnering with a rewards provider who offers a wide array of rewards coupled with data-driven personalization. When seeking a rewards provider, look for a partner who understands these key best practices:

Know your customers.

Some program operators attempt to make their loyalty programs all things to all people – but understanding differences in generation, gender, income, education, family size, and other data points is critical to successful rewards design. To build a compelling rewards portfolio, seek a partner who can marry general merchandising practices with data from past program performance – specifically, total redemption historical data. Use promotions to highlight new rewards; observe where members are browsing, “wish listing,” and redeeming; and use that data to refine your strategy. Such rewards analytics are essential to program success.

Be transparent.

Today’s savvy consumers can quickly break a loyalty program’s code – so be transparent in your earn and burn strategies. The first activity of an engaged loyalty program member is to calculate how quickly she will accumulate enough currency to reach the first redemption level. Your best customers typically look to earn a reward within the first 90 days – so design accordingly, and openly communicate the earn velocity early. When building your earning velocity rules, balance product profitability with a compelling case for participation.

Balance aspiration with engagement.

Once members have broken the “velocity code,” the next step on their journey is to select their reward wish list. This selection may be based on need, whimsy, or emotion – and it will change over time. Encourage members to build their wish lists, track earning activity towards their goals, and push targeted offers based on their browsing history. Most consumers dream big and select the trip to Hawaii or the 75-inch OLED TV; after 18 months, they instead redeem for the high-end food processor when theirs breaks down, and they’re equally happy with their choice. Most importantly, every time they use their rewards they’ll think of you – the program sponsor. Providing a balanced portfolio of aspirational and engaging rewards will power this journey.

“Amazonify” your rewards portfolio.

Today’s consumers expect an Amazon-like experience when they shop online. When they’re browsing your rewards site, that’s what they’re doing – shopping. That means they expect an Amazon-like experience: Intuitive searches; broad product lines in appealing, relevant categories; and a personalized portfolio driven by data analytics based on their profiles and web browsing activity. Automating the digital experience is only the first step, however; you must also incorporate strategy by curating a reward catalog specific to your program objectives. You don’t need a million items in your reward catalog; rather, curate a targeted assortment of rewards that catch your members’ attention while meeting your revenue and cost goals.

Manage your cost per point.

Managing your Cost Per Point (CPP) – the cost of rewards redeemed divided by the number of redemption points – is critical to program financial health. Important variables to consider include program maturity, accumulated point balances, vertical market, competitor programs, split tender offered, points expiration, and point burner campaigns.

Your vertical market, in particular, can drive costs up or down based on the perceived value of in-kind rewards. Airlines and hotels offer seats and rooms as rewards, for example, but also drive program revenue by supplementing travel rewards with non-core rewards that encourage them to pay cash for their seat or room. Reward credit cards, meanwhile, often offer cash back, but lose the allure of tangible rewards that foster brand stickiness while offering a lower CPP.

New loyalty programs should operate a fiscally conservative rewards strategy: Start with 60-80 basis points ($.008) until you have 18 months’ worth of redemption data to formulate a longer-term budget. Control costs by focusing on in-kind, merchandise, digital downloads, and gift cards. Add more expensive travel and experiential rewards later, and limit expensive device rewards to key marker brands such as Apple and Bose.

More mature programs should offer rewards in the 80-120 bps range by adding more attractive electronics, travel, and experiential rewards. For elite tiers, reflect their value to the business with rewards in the 250-300 bps range, including high-end travel, concierge services, and top-shelf electronics. You can also control costs by offering sweepstakes, auctions, and contests that drive engagement while reducing program liability.

Build an engaging redemption experience.

Building an engaging redemption experience is also critical to managing CPP. That experience begins with marketing campaigns and promotions that drive engagement while encouraging redemptions that control budget and reduce liability. Redemption tools that reduce friction, such as one-click, checkout, cart personalization, and expedited delivery can also drive engagement – but may add cost unless you charge for them or restrict their use to top-tier members. The reward delivery experience is also critical to engagement; personalized, hand-written notes, branded packaging, and on-time delivery creates a positive redemption experience that will jump-start the cycle of earning and redemption that leads to long-term loyalty.

Loyalty practitioners have many levers at hand to control program budgets while delivering an engaging rewards experience. Effective rewards design is both art and science, marrying the historical redemption data of your rewards provider with your own customer analytics. Seek a rewards provider with the experience to deliver on this promise, and together you will deliver a loyalty program journey that builds sustainable and profitable relationships with your best customers.

Theresa Thomas Vice President Strategic Solutions at Hinda Loyalty Group

Gregg O’Neill is Business Development Director at Hinda Loyalty Group.

Gregg O’Neill is Business Development Director and Theresa Thomas Vice President Strategic Solutions at Hinda Loyalty Group. This content is sponsored by Hinda Loyalty Group. For more information about Hinda Loyalty Group, please visit them here.

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Tim Tyler is Managing Partner for Ellipsis & Company

In most developed markets, funding for credit card loyalty programs is most often tied to the card’s interchange fee – the fee paid by merchants accepting the card to the card issuer. This widespread practice of linking interchange to loyalty funding has seen interchange fees mostly or wholly funding credit card reward programs – an especially important practice given the increasing reluctance of merchants to pay issuers for points. Given this reality, how can looking at market differences in interchange rates help card marketers understand how much loyalty funding is enough, and how we can do more with less? In this month’s Spotlight, Ellipsis & Company managing partner Tim Tyler helps us navigate the credit card loyalty landscape.

By Tim Tyler

In a recent discussion about credit card reward funding, Iain Turnbull from National Australia Bank told me, “There is not enough interchange in the United Kingdom to run the credit card loyalty programs we have historically. There is just enough interchange in Australia. Somewhere between the two is an interchange threshold critical to how credit card loyalty programs reward customers.”

In some developed economies, regulators have forcibly reduced interchange, while self-regulation has reduced it in others. Because interchange rates have become more transparent, it is now possible to infer a market’s budget for credit card loyalty programs – and this transparency affords us a unique opportunity to explore differences in credit card loyalty program marketing based on differences in overall budgets. Around the world, therefore, there is a large-scale test underway of the effect of falling loyalty program budgets on the marketing, structure, and generosity of a whole class of consumer loyalty programs. The results of that test will, at the very least, tell us something about how marketers innovate and react to budget stress.

In our market research, we divided credit card loyalty marketers into four primary categories: Very low interchange markets such as the UK, with 0.3% interchange due to EU regulations; Low interchange markets such as Australia, with 0.5% interchange due to central bank regulation; “regular” markets such as New Zealand, where interchange varies but is generally higher than Australian rates; and high interchange markets such as the U.S, with approximately 2.4% interchange. We then looked at how credit card marketers in each market were working with their respective interchange to fund and market loyalty programs. Here’s what we found:

The United Kingdom (0.3% interchange): Rewarding “whole bank” relationships
With limited funds but a good mechanism for reward available in the credit card product, UK banks place more emphasis on the cardholder’s overall relationship with the bank. Points for mortgages, points for direct deposit, points for direct debits… there is a broadening of the product base used to fund loyalty within the bank. Increasing the depth of product holdings and engagement, for example, seems to be the aim of banks such as Natwest and Santander. Other banks implement higher annual fees, higher interest rates, and points earning caps to compensate for lower interchange; Capital One, on the other hand, simply withdrew its rewards cards from the UK, saying the proposition was unsustainable.

Australia (0.5% interchange): Pretending while cutting
The picture in Australia is complicated by the presence of the Qantas Frequent Flyer program, in which points are earned on 35 percent of all credit card spend. Issuers have cut the richness of their loyalty programs by as much as 62 percent in some cases, but do not want to lose the big-spending air points collectors from their portfolio. To compensate for these cuts, banks have continued to promote their programs, and have released travel-specific cards that offer travel benefits in lieu of points. They obfuscate while increasing fees, tightening earning caps, and increasing the points cost of rewards. This risky strategy could see cardholders abandon these programs through boredom.

New Zealand (medium interchange): Disruption and innovation
In New Zealand, there has been a period of voluntary restraint on increasing interchange, but that restraint has not shielded the market from interesting times. Two years ago, Air New Zealand changed its relationship with the Bank of New Zealand and withdrew the popular Global Plus Airpoints card; Air New Zealand is now aggressively building a network of retail partners to build a robust Airpoints coalition program that will compete with the existing national coalition program Fly Buys. As a result, other issuers are revitalizing their proprietary programs, and there will be lessons for us all in an environment where loyalty budgets are still rich enough to influence cardholder choices.

USA (2.4% interchange): Everyday spend rules
With loyalty program funding this rich, US card marketers focus on getting their cards to the front of the cardholder’s wallet. They do this by reinforcing habitual use of everyday shopping. High earn rates for card use in supermarkets, gas stations, and drug stores are common, with large issuers willing to subsidize rewards in these categories well above the 2-plus percent interchange. The venerable US market also features a large number of co-branded and affinity cards, with retail brands hungry to share substantial card returns with issuers.

Are there lessons that jump out in this quick comparison? A few for your consideration:

• For very low interchange markets, stress wider banking relationships to increase program budgets via other business units helping to fund the program.
• For low interchange markets, consider ways to counterprogram against “stingy” reward programs, or consider following UK banks’ lead by evolving toward “whole bank” relationships.
• For medium interchange markets, follow the New Zealand model of revitalizing proprietary programs to compete against frequent-flyer programs and coalitions.
• For rich interchange markets, reinforce habitual use by cardholders through everyday spend rewards to keep your card front of wallet.

In each of these markets, issuers are experimenting to determine how much funding is enough while trying to do more with less. To innovate, marketers should continue to learn through observation, share ideas, and look for successful case studies outside your native market. We’ll continue to share our findings with you.

Tim Tyler is Managing Partner for Ellipsis & Company. This content is sponsored by Ellipsis & Company; for more information, please download their white paper here.

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It may seem obvious to say so, but surprising a customer should be different from just exceeding their expectations – it’s not so much about delivering a better service than expected, but rather giving them something entirely unexpected.

By Adam Schaffer, Managing Partner, Ellipsis & Company

To best incorporate Surprise and Delight (S&D) in your loyalty strategy we would make three key recommendations:

1. Use Surprise & Delight as an alternative reward mechanism, to prevent costly feelings of entitlement

Expectations can lead to entitlements, and research suggests¹ that especially in competitive or commoditised industries, rewards programs can be undermined by this sense of privilege. S&D offers a strategy to reward best customers without creating entitlement.

Kimpton Hotels’ Karma program provides an interesting example of an operator who has built S&D into their program, using social media to find opportunities to personalise their customers’ experiences (check out this video to see more).

2. Apply a ‘test and learn’ approach to using Surprise & Delight

In addition to circumventing issues of entitlement to rewards, S&D can work well across a range of marketing strategies, including as an apology.

In response to long wait times at their call centre for Elite customers, Expedia sent $100 coupons to 90% of Elite members and did nothing for the other 10%. Those who didn’t receive the coupon decreased their spending by between 10% and 20%. But those who received the coupon actually increased their spending by 5% to 6%, despite the poor customer experience².

3. Surprise & Delight works differently with different customer types

The effectiveness of ‘Surprise and Delight’ depends on what type of loyalty mechanism is in play between you and your customers.

A study by Marketing Science Institute³ points out that customers are loyal because of 3 intrinsic behavioural mechanisms:

• Habit: memory based loyalty, formed from consistent and automatic spending patterns, notably in customers whose usage does not change over time.
• Dependence: rational loyalty driven by a cost-benefit analysis of switching costs, particularly in customers with a wide product holding.
• Relationship: social and emotional loyalty, built on the trust that arises through multiple interactions typically in long-tenured customers.

To look at the impact of ‘special benefits and experiences that go beyond the core offering’ the team then tagged customers to each of the 3 mechanisms in a telco’s database, and identified 4 customer segments that each responded differently to a surprise offering of 2 months’ free service – making a good guide to who should be the recipients of Surprise & Delight investment:

• Loyalists: have high levels of all 3 loyalty mechanisms. These customers are the best targets for S&D as the gift signals that you still care and are not taking their loyalty for granted. Churn dropped 5.1% following the offer, although there was no expansion of their business.
• Dependents: have a broad product holding with you but low ‘habit’ and ‘relationship’ levels. You need to be careful with these customers, defection rates did drop 5.3% but the likelihood of them expanding their business also dropped by 8.6%, perhaps because they were nervous to add to their dependence – so best to combine S&D with socially-oriented activities to build trust.
• Sleeping Dogs: these customers are mainly bound by ‘habit’. Be careful about waking these customers up with a gift as they may play (they expanded their business by 1.9%) or bite (defection increased 3.3% as well). Better to wait until ‘dependence’ and ‘relationship’ grow.
• Sceptics: these customers have low levels across all of the 3 loyalty mechanisms, so don’t engage! They viewed the offer with suspicion – perhaps assuming it was to compensate for an inferior product, and increased their churn by 5.8%

The conclusion here is ironic… it looks like the effectiveness of Surprise & Delight depends on the extent to which your customers are already loyal!

Summary

In summary, we can say two things about Surprise & Delight strategies:

Firstly, S&D is about more than exceeding customer expectations: it can be used to reward customers without creating costly feelings of entitlement, and even to rescue high value customers after a poor service experience.

And finally, we should be careful which customers we choose to surprise, if we want to be sure we are delighted with the result!

Ellipsis specialise in Loyalty Consulting and Customer Strategy. We help our clients become customer centric, because we believe getting this right is crucial to creating value.

Website: www.ellipsisandco.com
Twitter: https://twitter.com/EllipsisandCo
LinkedIn: https://www.linkedin.com/company/ellipsis-&-company

References:

1. Wetzel, Hammerschmidt & Zablah, 2014 (http://journals.ama.org/doi/abs/10.1509/jm.12.0167)
2. Science Behind Why Surprise Rewards Work, Colloquy, 2014 (https://colloquy.com/resources/pdf/magazines/20140325-mag.pdf)
3. Henderson, Steinhoff & Palmatier, ‘Consequences of Customer Engagement…’, 2014 (http://foster.uw.edu/wp-content/uploads/2016/07/5_Henderson_Steinhoff_Palmatier_2014.pdf)

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There is a discussion to be had on loyalty for the CPG industry; is the concept of a packaged goods brand having its own loyalty program still seen as an insurmountable summit? How have the historical barriers to loyalty establishment changed, if at all? In today’s landscape, consumer behaviors are shifting as rapidly as the approach brands take to marketing. The amalgamation of innovative technologies and proven strategies means that CPG loyalty programs – which were once denigrated as unwieldly and impractical – are finally beginning to blossom. Is it time for your brand to begin adopting loyalty? With 1^st quarter 2017 CPG sales $3 billion lower than during the same period in 2016[1], can your brand really afford to ignore the discussion? If this sounds like foreboding forecast, we have good news: there’s a lot to be excited about in the realm of CPG loyalty. Let’s look at three reasons why the promise of packaged goods programs could revitalize the industry.

1. “Scale” is what’s really on sale

CPG brands don’t often have access to POS systems; in fact, this is one of the major barriers to getting a CPG loyalty program off the ground. POS integrations for a CPG are unwieldy, implausible, or downright impossible. It is simply too daunting a task for a brand to validate or recognize purchase this way. Up until recently, the only other solution was to alter packaging. For example, printing a separate code on each package, which consumers could use to enter online to collect and redeem points. This was a model that Kellogg’s employed for their Kellogg’s Family Rewards program. What they found, however, was that pin-on-pack mechanics didn’t sit well with consumers or their brand. Consumers found it difficult to read and enter codes, and the heavy machinery behind the scenes that managed the operations and costs for printing a pin-code on qualifying packaging became burdensome. For these reasons, Kellogg’s adopted a technology solution that created scale immediately; they leveraged our receipt processing system, called SnippCheck, that allowed consumers to simply snap a picture of their purchase receipt and submit on the KFR site. Regardless of the eventual solution your brand decides on, keep in mind the most important thing you can buy from your vendor – the opportunity to scale your initiative.

2. Rewards to rock your world

What’s more exciting than rewards? Everyone loves to win, everyone loves “stuff”, and yes, everyone loves anything that’s new. In the world of rewards and loyalty, these three concepts are at the heart of what’s making the world turn. Loyalty programs have always been at the forefront of bringing the most innovation to the rewards landscape for brands, but these developments have always been associated with huge programs with limitless overhead for experimentation, infinite budgets, and millions of program members. The great news for consumer packaged goods brands is that this is no longer strictly the case. Smaller programs can build in more expansive rewards profiles, offer more choice, and bring more inventive options to consumers that are hungry for what’s trendy. The decline of discounts means that value-add rewards bring a colorful palette of options that can be tailored to suit any demographic (a recent KPMG survey revealed that 80% of consumers prefer rewards that connect and build a personal relationship with the brand over mere discounts).[2] The universal appeal of technologies like smartphones means that digital rewards will be a mainstay of any CPG loyalty program; this carries a double-edged benefit, as aside from being relevant to consumers, digital rewards are inexpensive in bulk. Pushing beyond the boundary of digital rewards enters a world that many brands have never even encountered; from novel tech integrations such as earning rewards with wearable devices to trendsetting coalitions with companies like Lyft and Airbnb, there is a universe of possibility that promises to forever shape loyalty program rewards for CPG’s.

3. Keep a Positive “Data-tude”

What is the true role of today’s marketer? Arguably, to perfect their brand and shape it according to the market environment to the best of their ability. But a different set of skills now falls into the mandate of savvy marketers: business development, future growth, and customer awareness, all led by access to powerful data. The importance of data is not lost to anyone in the industry. 79% of marketers reckon data analysis has become more important, while 74% believe brand strategy plays a bigger role for them than it did five years ago.[3] In fact, discussing “big data” at this point is almost a tired cliché. However, what is less obvious is the differences in data, and how to prioritize which information to collect. Consumer sensitivity is the name of the game right now; shoppers are becoming more vigilant about protecting their identities and warier of brands that try to pry into their lives. All these circumstances are actually creating the perfect storm to let CPG loyalty programs really shine. Let’s break it down: loyalty is synonymous with trust and rewards; a long-term connection between brand and consumer establishes a co-sharing environment where consumers derive tangible benefit in the form of rewards, and brands can examine the robust data profiles of consumers over an extended period of time. The very nature of a loyalty program means that a brand can see how a consumer evolves and changes, and can therefore personalize their offerings to cater to ever more specific facets of their demographic. Finally, a loyal consumer is a trusting consumer; they see their favorite brand as a benevolent presence in their lives and will share data without even batting an eye. These reasons are why loyalty data is superior to data from shorter term strategies such as promotions.

—————–

As with any innovation, initial challenges and obstacles will inherently arise. This should not deter CPG brands from entering the loyalty realm; in fact, now more than ever do CPG brands need to begin building loyalty with their consumers, as first movers and early adopters stand to reap huge benefits and gains. The challenges that face brands looking to initiate loyalty programs are surmountable with the right blend of creativity, strategy, and technology. Under this perspective, the right loyalty partner becomes an integral component of loyalty program success for CPG brands. Ultimately, putting the pieces together correctly will result in a winning program that keeps your consumers engaged, excited, and, of course, loyal.

[1] http://www.nielsen.com/us/en/insights/news/2017/dissecting-the-decline-factors-that-shifted-the-us-grocery-landscape-q1-2017.html

[2] https://www.granbymarketing.com/power-rewards-incentivise-customers-right-way/

[3] https://www.marketingweek.com/2016/05/09/importance-of-brand-strategy-data-and-customer-experience-have-grown-at-highest-rate-for-marketers/

This article is presented, and sponsored by Snipp Interactive.

The post Three Reasons to Get Excited About CPG Loyalty appeared first on The Wise Marketer.

When cryptocurrencies first made an appearance, they were so far ahead of their time that most people had difficulties to really grasp the concept.  Now, nearly ten years after bitcoin was first introduced, more and more of us are realising its potential, particularly as an investment vehicle, where bitcoin has almost become the digital equivalent of gold.  Whilst many are wishing they had invested earlier, it is not too late to explore the opportunity, and with Loylogic’s latest innovation one can do just that even with their points and miles.

As we strongly believe that there should be no difference between the shopping potential of a regular cash shopper and what member should be able to purchase with their loyalty currency, we were eager to open up yet another unique redemption opportunity.

To this effect, we developed this new reward option, in which loyalty program members can redeem their points or miles in exchange for bitcoins. It is presented in a seamless user experience fully integrated into the members’ loyalty program platform. Aligning with the ongoing trend and currently bright looking future of virtual currencies, the conversion to bitcoin is only the first step of many more to follow.

But why is this so powerful and unique for the loyalty industry?

One of the great advantages of cryptocurrencies is that their conversion can be processed in real-time without any further wait, an aspect that other loyalty currency exchange options are lacking today.

Furthermore the exchange from one loyalty currency into another is generally expensive with a member paying extra for this redemption luxury. This is not the case for the Bitcoin exchange redemption feature.

The biggest novelty with this, however, is that for the first time members now can make a real financial investment including, of course, the typical risks and benefits associated to any type of capital investment. Since its first life program launch, for example, the converted bitcoins have in average encountered an over 200% appreciation. Consequently the perceived value of the used loyalty currency by the member appreciates at equal measure and with it positively impacts the member’s satisfaction and connection to their program enabling this.

We are very much looking forward to further develop and enrich this special feature, as its creation in this truly untouched loyalty terrain supports Loylogic’s strong vision that providing choice to program members is the key driver for loyalty success. Offering unparalleled flexibility and investment potential with this unique reward option makes Loylogic succeed once more in its constant quest of ultimate redemption power and freedom for its clients’ members.

Loylogic has been shortlisted as a finalist for the Mega Award 2017 in “Excellence in Loyalty” for their innovations in cryptocurrency and loyalty.

Vera Martocchia, Global Marketing Director at Loylogic.

About Loylogic

Loylogic is the world’s leading innovator and creator of points experiences, insights, commerce and engagement. By tantalizing members with more choices and arming programs with insights on behavior – anticipating both present and future needs – we deliver powerful solutions that amplify engagement and build loyalty.

Founded in 2005 with offices around the world and a global content network of more than 500 merchants and 2,000 online stores offering millions products and services, Loylogic, the new paradigm of points-based e-commerce and e-payment solutions, is the partner that the world’s leading loyalty programs trust with making their points and miles loved more. For more information please visit loylogic.com.

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For the first time, cryptocurrencies are seamlessly integrated into loyalty programs.

The conversion of points to Bitcoin, first of all, connects your traditional loyalty currency with the current generation of cryptocurrencies and, what could eventually be the future of what loyalty currency platforms could be based on.

We want to delight our clients and their members with unlimited possibilities. Bitcoin, as a first-time investment option, does exactly that.

This is a testament of one the core values at LoyLogic, which is innovation.  And it also aligns with our mission to make loyalty program points loved most.

Learn more at LoyLogic

This content is presented in conjunction with, and sponsored by LoyLogic.

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By Carlos Dunlap-Beard

Carlos Dunlap-Beard is VP, Loyalty Solutions & Business Development at Snipp Interactive

Loyalty Marketing that leads to Customer Engagement remains top of mind for CMOs, Brand Managers and other marketing professionals. That’s good. What’s not so good is the fact that it has been on their minds for many years running, but the progress towards meaningful, measurable customer engagement has been slow within most organizations.

As a general rule in business and in life, what you are accountable for and measured against usually maintains a higher position on the priority list than objectives that are softer or nice to have. It would be in my best interest to shed 30 pounds; however, no one is holding me accountable for doing so and besides potential health concerns, there are no consequences if I maintain my current level of chunkiness. But finalizing the program design for a new client and getting this article to Snipp’s marketing department by the deadline, well let’s just say the former is a bad way to begin a new relationship and will erode trust, while the latter floods my inbox, makes me avoid eye contact with certain colleagues and probably gets my manager involved. I don’t need either of those consequences.

With that being said, I’m deeming 2018 The Year of Accountability!!!

1. Implementing measurement and usable CRM Tools

There is a great deal that goes into this bucket. Everything from Reporting & Business Intelligence to Big Data & Campaign Management to Multichannel Marketing & Technology Integration is at play here. Success won’t be achieved by the organization with the most tools, but instead by the organization that makes the most out of the tools they have. For instance, if a retailer can distinguish my transactions from my neighbors by identifying us at the point of sale and has a MailChimp account, then based on my recent and past purchases, that retailer can send me a thank you note combined with an offer for a complimentary product to support my recent or past purchases. A similar note can be sent to my neighbor with offers based on her past behaviors. And to understand the impact of the message and offer, all the retailer has to do is to track whether or not I returned to purchase the featured complimentary product or responded to any other element of the offer.

Once that process is solidified and running efficiently, the retailer can add more dynamic elements to make it more automated and efficient.

At times, organizations don’t act because they want the 100% solution before implementing the strategy.  Most of the time, a 75-80% solution will do the trick, plus it can be tweaked and enhanced periodically via process and efficiency improvements.

2. Retaining, expanding and growing existing customers finally edges out acquisition

For far too long we have known that retaining and growing customers is less expensive than new customer acquisition; however, companies continue to  direct a disproportionate amount of their marketing funds to acquisition efforts. 2018 is the year we finally flip the script on marketing allocations and focus on where the most significant opportunities reside… with existing customers. According to research by Invesp, a conversion rate optimization company, 44% of companies spend more marketing dollars on customer acquisition, while only 40% of companies have an equal focus on acquisition and retention even though 70% of the respondents agreed that it’s cheaper to retain than acquire a customer. Not only is it cheaper, but existing customers are 50% more likely to try new products from trusted brands and will spend 31% more than new customers.

As we enter the new year, we’re also going to begin a new way of approaching customer engagement and business growth. Through an emphasis on omni-channel and scalable technologies to either enhance existing loyalty programs, or turning a new leaf and developing loyalty from the ground up, tech solutions are the name of the game in 2018. Snipp has helped both longstanding loyalty players and brands in burgeoning businesses create impact amongst their existing customer bases.

3. Employee training, recognition and empowerment is the spark that lights the fire that turbo charges the Customer Engagement Revolution

So many times great strategies have died during the execution stage of the project. Think about your own experiences as it relates to showing up in store, online or via phone to respond to an offer only to be let down because the company representative isn’t aware of the offer or understands it differently than you. Man, that sucks!

Although that does happen, it’s usually not the fault of the frontline associate. It’s usually a communications SNAFU and a lack of training. This is the dawn of Cultural Loyalty within companies, with an emphasis on employee communications, training, empowerment, and incentives. The overall goal for the organization and its newly enriched associates is to understand, drive and strengthen customer engagement. This can only be accomplished if those who interact with the customer most are aware, capable, and motivated.

As Richard Branson frequently quotes: “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”

What Branson has known and implemented successfully across his Virgin enterprise, will be a big contributor to companies that differentiate themselves in 2018.

4. Implementing and demonstrating a culture that cares.

Global, environmental, cultural and cause perspective is critical to today’s consumers. Organizations that ignore these factors will be challenged to stay relevant with an increasingly knowledgeable, empathetic, and vocal consumer.

Corporate philanthropy, green strategy and treatment of employees is almost as important as having a competitive or superior product. Consumers want to know that companies care as much about others as it cares about itself. For this reason, organizations like TOMS, WeWood and Warby Parker will continue to be relevant, positively impact the world and make profits. That’s one heck of a combination.

And finally, don’t be afraid to imbue these positive attitudes into the program itself. Loyalty strategies that help engage conscious consumers on the frontier of sustainability resonate strongly. Snipp has worked on a plethora of loyalty programs that actively promote sustainability efforts, including tying into charity programs and environmental causes.

5. No more excuses.

It’s 2018. Although there are constant technology updates and totally new inventions debuting every day, there is very little regarding customer identification, behavior tracking and engagement that can’t be accomplished right now. Whereas some “grandfather” industries – Airlines, Hotels, Credit Cards – are looking for much needed evolutions in their outdated Loyalty Programs, categories such as Consumer Goods and Manufacturing, are just beginning their journeys into Customer Loyalty and Engagement.

Regardless of the industry, the technology exists to enable an evolution or open pathways and opportunities that were previously non-existent. In the early-to-mid 2000s, every financial institution was investing millions of dollars to launch their own proprietary credit card loyalty and rewards program. The conditions were ideal and the opportunities to influence consumers to use your card over another bank card was plentiful. Those programs generated millions of dollars of incremental profits.

Fast forward to 2018 and the conditions are perfect for Consumer Goods and Manufacturing with both B2C and B2B. These industries are no longer beholding to retailers or a research study to learn more about their customers. In the past, trying to free yourself from the clenched fist of the retailer meant tinkering with now-outdated solutions such as pin-on-pack. Novel technologies such as Snipp’s receipt processing solution, SnippCheck, means that your CPG brand can offer a tech-centric program that not only validates purchase, but is fun for the consumer to engage with. Now a strategy can be implemented to accomplish several goals, such as: end-user identification, data capture, social sharing/tracking, brand education, purchase tracking without POS integration, channel interactions, emotional monitoring, advocacy, and lifestyle inclusions. The toughest part for most organizations will be focus because there are plenty of squirrels that can create a distraction.

With the aforementioned in mind, as marketers who want to get smarter and be more relevant to customers and employees, all we must do is to settle on objectives, commit to a strategy, listen to customer feedback, enhance strategies/tactics as appropriate and measure outcomes to know where we can improve. That’s how we hold ourselves accountable. That’s how we make meaningful, measurable progress towards our goals.

Cheers to 2018!

Carlos Dunlap-Beard is VP, Loyalty Solutions & Business Development at Snipp Interactive.

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Think online shopping and payments, and you most probably think of the stereotypical image of credit card details being entered onto a checkout page. However, in a surprisingly large number of markets, this isn’t the case. Whilst credit and debit cards are prolific in many regions, there are just as many others where they are not. Within the world of ecommerce, paying online without directly using your payment card is known as using an alternative payment method, or APM. The growth in the use of APMs is an important trend that the loyalty industry should be following. There are over 300 APMs in use globally. These range from bank transfer-based systems such as iDEAL in the Netherlands or Sofort in Germany, to direct mobile carrier billing systems such as Boku, to e-invoicing services like Klarna.

By Akif Khan

In addition, there is another class of APMs that specifically rely on the customer having a payment card, but which provide a mechanism whereby the customer’s card details do not have to be given to the merchant – examples include PayPal, AliPay and ApplePay. PayPal is often regarded as the king of APMs. With over 200 million active users and accepted at over 750,000 online merchants, it has come a very long way since being voted one of the 10 worst business ideas of 1999*.

What the ubiquity of APMs clearly demonstrates is that there is an appetite for customers to pay online using the method which best suits them. Some are happy to just enter their payment card details. Others are wary of doing so, and hence use a service like PayPal or AliPay, which still charge the payment to their card, but avoid the need to share sensitive card data with the merchant. Some may prefer to avoid using payment cards altogether or perhaps simply don’t have one. That is why online banking solutions like iDeal or Sofort work well for them. Whereas increasing numbers prefer using a service like Boku and simply have their purchase charged to their mobile phone bill.

What these all have in common, though, is that they – quite naturally – rely on the customer having funds either in their bank account, or associated with their payment card. There has been a lot of hype in recent years about customers using different kinds of currencies altogether. Perhaps the most obvious example has been bitcoin. The idea of people using a digital currency like bitcoin to simply shop online is appealing, and there are many merchants today who accept bitcoin payments on their websites. However, for a number of reasons including price volatility and ease-of-use, it’s quite likely we won’t be seeing bitcoin used for everyday online shopping anytime soon.

There is, however, another alternative currency out there today that has the potential to reshape how customers shop online: loyalty points. From airline frequent flyer programs to credit card points programs, the vast majority of us are members of, on average, six different loyalty programs. It’s estimated that over 16 trillion – yes, that’s trillion – points are issued annually. Many of those points are redeemed as intended, for example when members use their points to buy flights, or redeem with the programs’ online reward shops in exchange for premium luggage or the latest noise cancelling headphones. However, many of these points also just sit there dormant in member accounts. In fact, our calculations suggest that over 48 trillion – yes, that’s still trillion – points are sleeping unused in member accounts globally.

Why is this? There are number of reasons. I’m sure all of you can relate to the situation of having some points in an airline program but not having enough to actually buy a flight. What can you do with them? You’re at the mercy of the airline’s online reward shop, if there is one at all, hoping that you can find something on there to buy with the points that you have, and that you actually want. Some programs offer a fantastic amount of choice for their members in terms of redeeming their points, other programs are more limited. Regardless, there is a relentless drive within the industry whereby members of programs want more flexibility about how they can use their points.

This is a big headache for loyalty programs. All of these dormant points create a growing liability on their balance sheets. Furthermore, if members become unengaged and don’t spend points, then what is the point? (excuse the pun). How can programs offer the choice that members are looking for when their core business is typically managing flights or issuing credit cards? Which brings us back to the APMs discussed earlier. There is growing recognition of the opportunity of letting members spend their loyalty points when shopping online. Not within the walled gardens of the loyalty program online reward shops, but freely and directly on merchant websites. Today Amazon already has its Shop With Points solution in the US where members of leading US credit card loyalty programs as well as members of the Hilton Honors program can shop online with their points at the mammoth retailer.

Tapping into this vein of opportunity, Loylogic has recently introduced its PointsPay solution. A simple payment button that merchants add to their checkout pages – next to Visa, Mastercard, PayPal and others – that lets members of participating loyalty programs make their purchase using their points. If the member doesn’t have enough points, they can top up the payment with their payment card and even earn points by doing so. It’s a win-win-win situation. A win for members as they get much more choice in what they can spend their points on, choosing from the latest and fullest range of products direct on merchant websites. A win for loyalty programs as it keeps their members engaged, minimises the costs of offering reward choices, and drives further earning of points as member satisfaction grows. And finally a win for merchants, who have their brand promoted to millions of loyalty program members and who can tap into a virtual currency that would be otherwise unavailable to them.

The roster of existing APMs clearly shows that consumers will seek the most convenient and flexible way to pay that benefits them the most. Could paying with points online become the next disruptive force in ecommerce payments? There are 48 trillion reasons to think so.

Akif Khan is Head of PointsPay

About Loylogic

Loylogic is the world’s leading innovator and creator of points experiences, insights, commerce and engagement. By tantalizing members with more choices and arming programs with insights on behavior – anticipating both present and future needs – we deliver powerful solutions that amplify engagement and build loyalty.  For more information please visit loylogic.

The post The rise of PayPal and what the loyalty industry can learn appeared first on The Wise Marketer.

When it comes to rewards, an individual’s life stage dictates what drives them.

By Jim Valenti, Director of Merchandising & Replenishment & Raul Garcia, Merchandising Manager

Google “Millennial generation” and you’ll get over 28 million hits. Business began thinking about Millennials long before they first entered the workforce around 2000. And with good reason, they are the largest, most diverse, highest educated and arguably the most connected generation America has ever produced. Their impact on every aspect of every business whether as consumer, partners, employees or suppliers will be monumental.  Leaders ignoring this generation do so at their own peril. In many cases most individuals do not know which generation they fall into but easily will identify as “Self Employed, Work at Home, Empty Nester, Weekend Warrior, Dog Owner”

But when it comes to incentive and loyalty programs, you don’t reward a generation.  You look to engage individuals with an award selection appealing to their personal tastes and preferences.

Every program needs the right awards to engage and inspire their target participants.  But looking at any group only as a generation is far too broad and general to build a compelling award mix.    Life stage is a much more accurate predictor of award preferences.  Life stage looks at the different phases in life.

• Single or Married
• Home Owner vs Apartment Dweller
• Parent of young children or Empty Nester
• Employee or Retiree

People at the same life stage generally have far more in common with one another than those simply of the same age or whose incomes are similar.  That makes life stage a more useful and relevant indicator of reward preferences.

Which of these people would you expect to be most similar?

• A married 27 year-old with a toddler living in their own home in Omaha and working as a manager in a manufacturing company
• A single 26 year-old working for a Silicon Valley startup who lives in a rented apartment.
• A 45-year old middle manager who owns a home in Charlotte and lives with their spouse and two young teenagers.

Although they are separated by a nearly 20-year generational divide and half a continent, the parents with their own homes probably have much more in common with one another than either would have with the lifestyle of the single, Silicon Valley Millennial.

Life stages tend to outweigh generational difference when it comes to incentive awards.

• Homeowners will choose grills, lawn furniture and housewares to make their abode more comfortable, appealing and easier to entertain guests.
• Apartment dwellers with less space may opt for awards creating memorable experiences.
• Parents always relish giving gifts to their children and might be very driven by a bicycle or gaming system for their youngsters.
• Singles may be looking to give one of their rewards as a gift as well, but are more likely to be searching for adult gifts like jewelry for a significant other or perhaps even their own parents.

This isn’t to say generational differences are completely irrelevant. After all, people born and raised in a given time experience a unique set of social, economic and political events which contribute to shaping their generational culture, attitudes and outlook. Millennials, for example, have been described as the first “digital natives”. While this may be very important in understanding how best to communicate with them, it probably has little to do with the type of incentives appealing to Millennials.

The three best pieces of advice we can offer for choosing awards for your next consumer or employee program are:

1. Choose a broad selection of awards appealing to a variety of life stages.
2. Look for memorable rewards.
   • Electronics have great appeal and may become an integral part of the family life.
   • Durable items like home furnishings provide consistent, lasting reminders.
   • Sports items can engage so many diverse individual preferences.
   • Experiential & Travel rewards like concert tickets to major city venue create long-term memories.
3. Make the participant feel special with an award delivery experience recognizing their efforts.
   • Changing the packaging just a little like using a white shipping box or colored tissue paper can make the rewards feel more like a present and accentuate the reward delivery experience.

The Art and Science of Curating an Engaging Rewards Offering

While technology is critical component of the participant browsing, redemption and delivery experience, its ability to simplify presenting more and more awards to participants can become overwhelming.. Many programs today offer participants “millions” of redemption options and tens of thousands of manufacturers.  Touted as the “Amazon” shopping experience, the idea is cast the widest possible net to appeal to virtually any participant taste.

The reality of this retailing shotgun approach to rewards may have a negative impact on the program.  First, by its very nature, this approach includes a tremendous numbers of consumables.  Consumable items have little long-term value and are quickly forgotten. The shopping experience itself becomes a daunting task as participants must navigate through thousands of similar items with only slightly different features at nearly identical price points. Associating the program with quality brand names becomes impossible. The “Amazon” shopping experience values brand proliferation over quality. But that model doesn’t fit our reality as motivators of a specific behavior change for our consumers, employee or B2B partners. A carefully selected offering of a few thousand items in the four main reward categories, Home Furnishings, Electronics, Sporting Goods, and Experiential/Travel will entice 99.9% of your audience, keeping them engaged in your program for the long term and repeatedly coming back to your site.

Download the full eBook here:

Learn more about engaging, inspiring and rewarding incentive program participants at www.hinda.com.

The post Life Stage vs Generational Marketing Strategies appeared first on The Wise Marketer.

Consumers are more empowered than ever, have more choices available to them, and have greater expectations from the brands they purchase from and engage with. In addition to expecting a personalized experience, customers also expect companies to leverage their data to make predictions about their next likely action with a brand.

The recent State of the Connected Customer report by Salesforce polled over 7,000 consumers and business buyers to find out what those customer expectations are and how business leaders can respond to them.

In this whitepaper, CrowdTwist will outline the value of multichannel loyalty programs in their ability to capture data, create stronger insights, drive more personalized experiences, and help brands predict future behaviors.

The post Spotlight: Giving Customers What They Want appeared first on The Wise Marketer.