Category — Loyalty Marketing

Customer service is retail’s greatest missed opportunity. By Spencer L. Hapoienu. Why would anyone who sold products to millions of people through the hazmat-like comfort of a 30-second commercial want to actually engage a consumer one-to-one?

The years between the real Mad Men and 30 Rock have not been kind to mass marketing. One could argue that all marketing men (and women) are mad today because all they talk about is the individual — both retailer and consumer. The new sweet spot is one-to-one … read >>

Using games to engage consumers may not be as engaging as marketers think or as benign as consumers believe, reports Natasha Singer in the New York Times (2/5/12). Samsung, for instance, has a loyalty program called Samsung Nation "that offers virtual rewards to consumers" who Tweet, Facebook or otherwise "talk up Samsung" online. In many ways this can pay off. "Visitors who sign in and become active on Samsung Nation tend to explore our website much more, learning about our company, our products and our content," says Esteban Contreras, a social media manager for Samsung.

However, some consumers, like Kenneth Brown, mostly sees a chance to collect points toward a free television set by Tweeting about Samsung, for instance. So far, he’s posted more than 300 Tweets but attracted only nine followers — perhaps not exactly what Samsung had in mind. Ian Bogost of the Georgia Institute of Technology meanwhile says such games are also invasive and thinks companies should be more forthcoming: "Companies could say, ‘Well, we are offering you a new program in which we watch your every move and make decisions about our advertising based on the things we see you do,’" he says.

Games have also found their way into corporate incentive programs that offer "peer badges for the best team player," for example. The programs are sometimes integrated with "a companywide social network where employees create profiles showing their goals and achievements." The idea is to create "a positive feedback loop in which employees feel recognized for their work, leading to increased productivity." But, again, Professor Bogost sees a downside, noting that virtual rewards can be substituted for cold, hard cash. "This seems to be a move to use no-cost incentives," he says.

Alaska Airlines improved its customer service by measuring “50 different checkpoints” on each departure, reports Scott McCartney in the Wall Street Journal (1/5/12). “There are so many moving parts,” says Ben Minicucci, Alaska’s chief operating officer. “You just can’t tell people to get the airplane out on time.” To meet its standard, flight attendants must be on board 45 minutes before scheduled takeoff, and 90% of passengers have to be on board 10 minutes ahead of time. The amount of time it takes to refuel is measured, as is the time it takes the belt loader to pull up to the plane. The first bag needs to hit the carousel within 15 minutes.

Such discipline is the result of "an operational overhaul in 2007 after several years of dismal reliability," and it placed Alaska Airlines at the top of the list as a "best-performing carrier," as measured by the Wall Street Journal‘s "Middle Seat" scorecard, which "ranks major carriers each year on a number of key measures important to travelers: on-time arrivals, long delays, canceled flights, mishandled bags, passengers bumped from flights and complaints filed with the Department of Transportation. American Airlines ranked last — as it did in last year’s survey — while United and Continental, now merged, "scored almost as poorly as American."

Delta, now integrated with Northwest, meanwhile "engineered a major operational turnaround last year." In 2010, Delta was "second-worst in punctuality and baggage handling … and had the highest rates of canceled flights and consumer complaints … For 2011, Delta ranked in the top three in five of six categories." JetBlue scored both the most frequent and longest delays, with almost "one out of every eight flights … at least 45 minutes late last year." JetBlue says it’s because most of its flights go through winter-weather locales. And Southwest, the only airline that doesn’t charge a fee for two suitcases, "had the second-worst rate of mishandled bags."

Thrift stores "are gradually adding perks that impart a more exclusive feel to the shopping experience," reports Patrice J. Williams in the New York Times (1/1/12). At Housing Works, customers pay an extra five dollars to gain early, "Power Hour," access to its Buy the Bag sale, "where shoppers are handed a bag to fill with previously owned cashmere sweaters, tweed skirts and Italian handbags." The bags otherwise cost $25 each. "For some people, early access and seeing the newest, hottest thing is really important," says David Raper, vice president of retail for Housing Works, a nonprofit that supports HIV and AIDs patients.

The Super Savers Club at The Savers chain, "also known as Value Village … entitles members to discounts. The chain even started a Stamp Pass for the holidays: after 15 stamps, each awarded after donating or spending $5, a customer receives a 30 percent discount on the next purchase." At B-thrifty, outside Washington DC, shoppers purchasing a $100 pre-paid card get an additional $25. Goodwill, meanwhile, introduced a Rewards Card in 2010 that is "not that dissimilar from the one at Barneys."

So far, some 30,000 people have signed up for the Goodwill program in the Greater New York and New Jersey region. "We wanted to stay connected with loyal customers, the people who support Goodwill," says Lauretta Cunningham, senior vice-president of retail operations. Lauretta says the loyalty program is part of a larger effort to provide a better overall shopping experience. "We’re not Nordstrom," she says. "But we have people who feel our service is like theirs." Not surprisingly, thrift stores are doing well in the current economy, "growing five percent in the last year, according to the Association of Resale Professionals."

The table stakes of loyalty are higher than ever. By Lauren de Simone. The other day, I found myself asking a friend a question I’ve asked before … with no good answer: “What do you do with OpenTable reward points?” She just looked at me blankly. “I don’t know,” she said, “but I have a million of them.” Me too. “You think I’d get some special treatment or something but I don’t … at least none that I’ve noticed,” she added. Me too.

As a marketer, this troubles me. Here’s a brand, with a database of engaged consumers of some discretionary means, and their loyalty program is unclear, unrewarding and leaves at least some of its “loyalists” feeling unappreciated … The fact is, there are two types of loyalty: 1) brands you love and 2) brands that love you — or want something from you. The former is the kind of brand loyalty you feel and the latter is a loyalty program you’ve paid for … read >>

Emotional connections stir brand passions and seal consumer loyalties. By Brad Bryen. We all know the value of a loyal customer. We also know the 80/20 rule — marketers invest heavily in their most-loyal customers, who in turn drive up to 80 percent of their brand’s value. As a recent Conference Board survey of top CEOs confirms, driving brand loyalty has never been more important. According to the survey, CEOs see brand loyalty ranking first among management concerns.

Why? Because increasing the size of a typical brand’s top-tier customer base by just five percent can drive a 25 percent to 100 percent increase in profit. Increasing a brand’s base of loyal consumers requires brand commitment — the engaged, active selection and re-selection of your brand by consumers. Committed consumers will go out of their way to find your brand. They are less price-sensitive when given the choice between your brand and others … read >>

Keep customers faithful with the best total brand experiences. By Allen Adamson and Katie Ryan. We’re not sure if it’s the era in which we live, but we have more respect than ever for the folks whose automobile bumper stickers proclaim, Semper Fi. For those who may not know, it’s a shortened version of the United States Marine Corps motto, Semper Fidelis, which is Latin for “always faithful.”

Obviously, while the stakes here are not nearly as high, the holy grail of marketers has always been brand loyalty, or keeping customers always faithful. We’re not referring to the quasi loyalty that’s engendered by cash-back incentives, coupons, or discount promotions, but rather the always faithful — come hell or high water or whatever the competition may promise — kind of loyalty … read >>

Does your brand speak for itself? Building loyalty requires it. By Jayne Eastman. A “small-boy story” is a marketing positioning that is so complicated you need to send a small boy along to explain it. It’s lazy marketing — filling up the consumer’s time with so much information and so many product signals that you are essentially asking them to do the hard work of understanding what really is important about your brand and why they should care about it.

Small-boy stories are often the result of a lack of clarity about what is truly important to your target consumers, what will firmly attract and then attach them to your brand, versus what is irrelevant. We have become victims of too much information. We have learned so much about a market, a consumer, a need or a brand’s equity that it all ends up getting jammed into the positioning … read >>

Cultural values are now critical to consumer loyalty. By Robert Rivenburgh. The advent of social media, social responsibility, personal interests in causes beyond oneself — and just, generally, care for others — has suddenly and dramatically catapulted the whole subject of loyalty to a new and significantly more important plateau.

Few would argue that “loyalty” has been more than overworked: as of this writing, a Google search turns up more than 6.5 million pages on the subject of brand loyalty and Amazon lists more than 600 books on the subject. However, no one has come close to equaling or bettering Frederick Reicheld’s brilliant foundational trilogy on loyalty, beginning with The Loyalty Effect, in 1996 … read >>

Re-thinking our post-recession landscape. By Lee Aldridge. I would wager that, within 24 hours of reading the words “loyalty” and “program” in this article, you will independently hear “sustainable” emoted at work. Hypothetically, I’d like to build a construct for you that puts these words together to build something more meaningful: “earning sustainable loyalty” or more properly “sustainably building loyalty.”

A really important part of this will be to execute on the idea using our current talent pools — that is, the people we have on hand. First, let’s take a cook’s tour of where we are now and how we got here … read >>