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LOYALTY

TM

Volume 1 Number 5

November 2009 MANAGEMENT


Powered by Loyalty 360

The
Engagement
Issue
Give Back...
Get Back
The Engagement
Impact of CSR
Engagement
or Loyalty, I’m Happy
does it matter? to be Here!
How Engaged Employees
Improve Your Bottom Line

Engagement Expo Preview


Everyone is talking about engagement. What does this mean to you?
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2 Loyalty Management™ | Loyalty360.org


This Month in
NOVEMBER 2009 VOLUME 1 NUMBER 5 W W W. L O YA LT Y 3 6 0 . O R G

DEPARTMENTS
6 What’s on Loyalty360.org Why Should We Care
8 Letter from the Editor
10 Contributors
What They Think?
LOYALTY FORUM 26
12 Your Voice
“When launching a new rewards program or
marketing promotion, what are the best techniques to
get employees informed, excited and committed to the
initiative?”
14 Q&A: Ask the Experts
“I’ve heard that there are challenges when valuing
points and managing redemption when dealing with
franchisee’s. What are the best practices that I should be FEATURES
considering?”
24 Engagement or Loyalty, Does it Matter?
16 Behind the Brand/People Mark Johnson
Interview with Phil Rubin, CEO & President,
rDialogue 26 Why Should We Care
What They Think?
18 Behind the Brand/People Carlos Dunlap – Kobie Marketing
Interview with Maurice Johnson, GE Money
30 I’m Happy to be Here!—How Engaged
20 Books
Employees Improve Your Bottom Line
Loyalty Reads
(And Make it a Great Place to Work!)
22 Excerpt from: “Made for Collaborating” Dan Paulson – InVision Business Development
by Rodd Wagner and Gale Muller, Ph.D.

36  e make a living
W
by what we get,
I’m Happy to be Here! we make a life by
How Engaged Employees Improve Your Bottom Line what we give.

30
Give Back...Get Back

36 Give Back...Get Back


Athena Golianis – AGW Idea Group

40 Customer Behavior is Influenced More by


Emotion than Reason
Gallup Consulting

42 Integrated Customer Marketing™


A systematic approach to delivering
customer interactions that create
competitive advantage and drive
shareholder value
David Williams – Merkle

Loyalty Management™ | November 2009 3


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4 Loyalty Management™ | Loyalty360.org


sneak peek
This Month in
NOVEMBER 2009 VOLUME 1 NUMBER 5 W W W. L O YA LT Y 3 6 0 . O R G

Engagement Expo
Sneak Peak 46
In 1967—the answer was
“plastics.” Today, the magic
word is “analytics.”
The New Plastics: Driving Share Through
Competitive Analytics

TECHNOLOGY,
TRENDS & REWARDS
46 The New Plastics: Driving Share Through
Competitive Analytics
Caitlin Schar

57 48 Loyalty Alternatives— Create my own


currency or use theirs?
Erin Raese

49 Online Video Can Be Very Engaging


Loyalty Management Mike Jais – Graphics Plus Inc.
Editorial & Production Team:
Erin Raese – Editor in Chief
Caitlin Schar – Editorial Director
Victor Wilcox, Graphics Plus Inc. – Layout & Design

50
Kathleen Ninneman – Graphic Designer
Graphics Plus Inc. – Print Production

Loyalty 360 team:


Mark Johnson – President and CEO Customers Are
Tara Barkett – Marketing and Account Manager Loyal To Brands, Not
Amanda Chasteen – Associate Manager, Marketing Operations
Jennifer Gunnarson – Marketing & Events Coordinator
Marketing Programs
Julie Hellebusch – Controller Loyalty Marketing Beyond Programs

Contacts:
Article Submissions: Erin Raese (630) 235-8251
Advertising: Caitlin Schar (630) 850-7867
BEST BUSINESS PRACTICES
To subscribe to Loyalty Management visit Loyalty360.org. 50 Loyalty Marketing Beyond Programs
Phil Rubin – rDialogue

53 Building Advocacy Before the Purchase


We Want Your Feedback Doug Fleener – Dynamic Experiences Group, LLC
As a “voice of the customer” focused publication we want to
hear from you—our customers. What would you like to see
54 Measuring Engagement: Simplicity is Key
included in these pages? Share your thoughts on articles and
Bob Konsewicz – Maritz, Inc.
ideas for content. This is your platform.
We would like to hear from you. 56 Loyalty Program Profile:
Rock Bottom Mug Club®
Write us at: Mailbag@LoyaltyManagement.com

Loyalty Management™ | November 2009 5


what’s on loyalty360.org
READERSHIP SURVEY
We want to know what you think of Loyalty
Management. What you like, what you don’t NEWLY LAUNCHED
like and what you want to hear more about.
Your ideas will help to shape the magazine as
we move into the next year of publication!
The loyalty marketer’s community

An Interactive Voice of the Customer Forum

360 Connect was created to glean “voice of the


customer” insight, to attain a better understanding
of the challenges in the market and how best to
address them.

you may have missed … WHITEPAPERS & THIS WEEK IN LOYALTY


Voice of the Customer: Industry Research Report - Increasing Traveler Loyalty Through Interactive Insight-
Insights & trends for today’s VOC practitioners Based Marketing
by: Allegiance by: Greg Hogue

The Changing Face of Card Loyalty Empowering the “Pulse” Throughout Loyalty Marketing
by: Wong Wan-Ling, Insight Consultancy by: Mark Johnson

YOUR VOICE: MINI-POLL


When deciding ones favorite or regular “go-to” shop, restaurant or vendor there are several elements that play
off each other to drive customer loyalty. Please rank the following in order of importance to you, then tell us
why your #1 is most important.

Environment/Ambiance (decor, location, etc) Loyalty Program


Service (pre-purchase) Brand Recognition
Customer Service (post-purchase) Discounts/Special Offers
Quality Patrons/Clients
Value Personal recognition or acknowledgment
Soft-Benefits Other

What is your #1 factor when determining what makes you most loyal? Why?
Visit Loyalty360.org to participate online or email your response to Mailbag@LoyaltyManagement.com.
Responses will be published in a future issue of Loyalty Management!

6 Loyalty Management™ | Loyalty360.org


Loyalty Management™ | November 2009 7
FROM THE EDITOR

Engagement—the newest buzz word.


But what is Engagement? Wikipedia has multiple definitions
based on a particular audience: student engagement, customer
engagement, employee engagement, work engagement.
Merriam-Webster states: a: an arrangement to meet or be present at
a specified time and place <a dinner engagement> b : a job or period
of employment especially as a performer.

I’ve had over a hundred conversations in recent months talking about


Engagement. I can now attest that there are many definitions, even
more questions but also an immense desire to find the golden egg.

We’re here to help you in your search. Between this issue and
the upcoming Engagement Expo we will provide a wealth of
Loyalty 360
has announced
information—from philosophies to executable strategies to defining
the first annual success criteria to peer insights.
Engagement Expo
to be held in Chicago
at the Sheraton In this issue, Dan Paulson takes us through the 10 steps to engaged
Chicago Hotel & Towers employees ( page 32) and on page 36, Athena Golianis shares the
November 18 & 19 importance of corporate social responsibility and how it drives
employee engagement.
2010 Loyalty Expo to
be held on June 6 – 8 in
Orlando, FL at the Omni No one builds engagement and commitment with employees and
Champions Gate customers better than Disney. Meet the man behind the brand—
Lee Cockerell, former EVP of Operations at Disney and
Loyalty 360 on Twitter Engagement Expo keynote speaker—on page 60. You’ll also
–#LE360
enjoy Lee’s book Creating Magic (review on page 21.)

LOYALTY
TM

We’d like to hear about your journey to engagement.


Volume 1 Number
November 2009
5
MANAGEMENT Powered by Loyalty
360
Please share your experiences and insights with us at
mailbag@loyaltymanagement.com.

The We look forward to seeing you November 18-19, 2009 in


Engagement
Issue Chicago at the Sheraton Hotel and Towers!
Give back...
Get back
The Engagement
Impact of CSR Sincerely,
ENgagEmENT I’m Happye!
oR LoYaLTY, to be Her Employees
doES IT maTTER?
How Engaged m Line
Improve Your Botto

podoespr
nt Ext. What EviEw
En gagEmE about engagemen
this mean to you?
Everyone is talking

Erin Raese
Loyalty Management Editor-in-Chief
is now a bi-monthly Loyalty Management
publication. erinraese@loyaltymanagement.com
Expect the next issue
in late December!

8 Loyalty Management™ | Loyalty360.org


Loyalty. Reinvented.

Loyalty programs are a strategic asset.


To capitalize on them requires going
beyond rewards.
First Data provides intelligent, data-driven loyalty solutions that
provide insight to make your loyalty program more effective. Utilizing
state of the art analytics, First Data enables you to understand your
customers, predict purchasing behavior and maximize revenue.
First Data is uniquely skilled at providing our clients with more relevant
and valuable rewards for their customers, increasing customer
acquisition and retention and creating stronger relationships.

To learn more visit firstdata.com

Loyalty Management™ | November 2009


©2009 First Data Corporation. All rights reserved. All trademarks, service marks and trade names referenced in this material are the property of their respective owners.
9
Contributors

Gallup Consulting Mark Johnson


Gallup Consulting has a unique President and CEO of Loyalty 360.
approach which helps companies Mark has significant experience in
drive true organic growth—revenue selling, designing and administering
and profit increase from continuing prepaid, loyalty/CRM programs,
operations. Gallups’ consultants as well as data-driven marketing
are trusted advisors to many of the communication programs.
world’s leading companies.
Gallup Consulting Mark Johnson
Bob Konsewicz
Carlos Dunlap As Director of Strategic Consulting
Carlos Dunlap is the Practice for Maritz, Bob has over 8 years of
Director of Kobie Marketing’s Loyalty experience in the consumer loyalty
Consulting group. Carlos has over field. He has worked in various CRM
15 years of experience designing and direct marketing environments
customer loyalty strategies for the and is an active speaker sharing
world’s largest retailers, banks, strategic concepts with marketers
telecommunications and media and business leaders.
companies.
Carlos Dunlap Bob Konsewicz Dan Paulson
Doug Fleener Dan Paulson, President and CEO of
Doug is a veteran retailer with over 25 InVision Business Development. His
years of hands-on retail experience. 16 years of experience in operations
He is the former director of retail for and marketing continue to produce
Bose Corporation and has also owned extraordinary growth in sales,
and operated his own specialty profitability and efficiencies for many
stores. Doug is now president and companies. Dan is recognized for
managing partner of Dynamic his ability to build teams, develop
Experiences Group LLC, a Lexington, leaders, and create top sellers in the
Doug Fleener MA based retail and customer Dan Paulson areas of retail, service, finance and
experience consulting firm. real estate.

Athena Golianis Phil Rubin


Athena is the owner and founder CEO & President, rDialogue.
of AGW Idea Group, Inc. She is Phil has more than 20 years of
an innovative brand builder and strategic marketing experience
integrated marketing communications with an emphasis on loyalty and
leader and has the success stories relationship marketing, integrated
to prove it. Over the past 23 years, communications, partnership
Athena has helped position and build development, promotions and
Athena Golianis some of the biggest blue chip brands Phil Rubin program development.
in the business.
David Williams
Michael Jais David is President and Chief Executive
Michael is President of Graphics Officer of Merkle Inc., one of the
Plus, which provides design, print, nation’s largest and fastest-growing
multimedia, and distribution database marketing agencies.
solutions that support organizations’ Williams oversees the delivery of
marketing and loyalty strategies. integrated customer marketing
strategies and solutions to hundreds
Michael Jais David Williams of nationally recognized clients

If you would like to contribute to a future issue of Loyalty Management


please contact Erin Raese at (630) 235-8251 or
ErinRaese@LoyaltyManagement.com.

Deadline for the March 2010 issue is December 14th!

10 Loyalty Management™ | Loyalty360.org


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2009 | Loyalty
Loyalty Management™
January 2009 11
Management 35
LOYALTY FORUM: Your Voice

Discussion from the


Loyalty 360 Social Network
(Find us on: loyalty360.org,
Linked In, Twitter & Facebook)...

“When launching a new rewards program


or marketing promotion, what are the best
techniques to get employees informed,
excited and committed to the initiative?”

C ultures support what they understand. 
Communica-


tion of the program, its intention and rationale is
“To ensure other
critical. Inclusion: 
We must create inclusion at the employee
or department level. If appropriate, an incentive for most x
departments see how
by person or by department creates personal engagement.
Visual Exposure: Visual exposure of program achievements
these programs will
or trends by contributors works very well. Have the
results posted in different places throughout the work
impact their goals and
environment. Consistent management communication: If
management is not committed or consistent, the troops will
teams prior to
not follow very long. announcements is
Rudy Vidal  Principal at Vidal Consulting Group
crucial to success.”
F or StubHub, I find a grassroots approach that works
best. I garner support with peers and colleagues (even in
other departments) before making any big announcements
—Michael Wilburn,
Head of Relationship Marketing at
StubHub, Inc.
or presentations to ensure acceptance and motivation. My
approach is to start with one-on-one conversations without
a lot of slides or fancy presentations. Straight talk backed
up with facts and data can not be refuted. This approach
gives me avenues to troubleshoot ideas ahead of time and
T here is only one way to achieve that—invite them as
well to rewards program. Of course—we have to define
special rules for them (be aware of frauds—employees cause
makes sure I’m not leaving profitable opportunities on the most of them)… But, there is one very important thing to
table. To ensure other departments see how these programs remember—a program for our people has to be based on
will impact their goals and teams prior to announcements clear rules and guarantee rewards in reasonable time. What is
is crucial to success. It’s my job to promulgate customer also important, in most cases, we will reward our employees
advocacy, to demonstrate the value of these programs and for sales and new “active” member enrollment, but we can
why they are important to every person at StubHub. It also also give points for service quality (i.e. if service KPI’s for
creates a sense of anticipation among colleagues so that particular store are fine, we can give some points to all staff ).
when the plan is rolled out the excitement is already built-in! For information I would prefer to use intranet e-learning
trainings + loyalty portal dedicated for employees.
Michael Wilburn  Head of Relationship Marketing at
StubHub, Inc. Bartosz Demczuk  Consulting Director at Comarch

12 Loyalty Management™ | Loyalty360.org


“In most cases, we will reward our employees
for sales and new ‘active’ member enrollment,
but we can also give points for service quality.”
—Bartosz Demczuk, Consulting Director at Comarch

C ommunication to your employees is mission critical


to the success of any new rewards program or
marketing promotion. Employees need to be engaged from
B est way to get them excited and motivated during an
internal reward program is to have a kick off meeting
or rally where management is involved and you explain
the onset with a clear-cut description of what the goal of the the program and its rewards. Next make sure there is an
program/promotion is, what their role is in the process, what online element where you explain the rules, objectives and
is the business objective, what are the marketing channels goals of the program. This online element should also show
being used, how the program/promotion is structured the points they’ve earned and of course there should be a
and a thorough understanding of the reward process reward catalog so they can start working toward earning
(everything from how members earn rewards, redeem something they may desire from the catalog. Then start to
rewards and upgrade). An orchestrated kick-off should be promote the reward program with weekly communications.
part of your promotion plan in order to raise awareness and Performance improvement and employee engagement are
generate excitement. After the launch of the program, the vital for a corporation to succeed. 
Have A Rewarding Day! 


communication still needs to continue so employees have
a deep understanding of the progress being made towards Arnold Light  Arnold Light Consults, Inc
reaching the set business goals. The best way to get all of

T
this done in a timely, cost effective manner (and keep the
reat them like your customers and sign them up,
information constantly flowing and updated) would be
engage them—only through positive experiences will
through an existing employee intranet that exists, email
they make your ‘program’ come alive.
communications such as an employee e-newsletter and
even creating a special branded email update specifically Stephen Fraser  CRM & Loyalty Marketing Practitioner
for the rollout of the program and subsequent updates.
Verbal communication also needs to occur in tandem with
all email communication as well. This could be done through
any rollout training that occurs (with documentation of the
program for employees) and updates provided at monthly
S ome of our clients have announced the start of a
program by incorporating the info into regular
meetings, news letters, or on company websites; even the
meetings, conference calls/status calls (whatever the mode page that is reserved for employees only. Some things I
of communication is traditionally is for your organization) so have seen used to maintain momentum are to use the results
that it becomes a regular item on the set agenda. as a training tool but in a positive way. Try posting the results
online, or on a visible board in the lunch/break room. Public
Aileen Stacy-Forker  Marketing Director at Smart
verbal recognition is always welcomed! Some things we offer
Button Associates our clients are online reporting tools so that, for instance,
the user can see trended results, or results of other stores for

T
comparison. That always gives incentive to do better.
hink frequency, relevancy and integration.
Frequency—there is no substitute for spaced repetition. Jennifer Adams  Burket
Relevancy—earn the right to be heard with high value
content. This makes frequency palatable. Integration—say
the same thing with the same look through all possible
touch-points whether it is e-mail, newsletters, snail mail,
websites, face-to-face, etc.
I f it’s possible, it is important to involve employees (or
some of them) in the design of this program. If you are
involved in this creation, it is also part of you.

Todd Hanson  CRP, CPIM, President and Founder, José Ignacio Ruiz (Iñaki)  Orange—France Telecom
Catalyst Performance Group, Inc. Group 
Barcelona, Spain L

Loyalty Management™ | November 2009 13


Q&A
LOYALTY FORUM: Q&A

Ask the Experts

Q: “We’re looking to launch a loyalty initiative but


approximately 60% of our locations are franchised.
I’ve heard that there are challenges when valuing points
and managing redemption when dealing with franchisee’s.
What are the best practices that I should be considering?”

A: When considering a loyalty program for a brand that


operates within a franchised infrastructure, there are a few
system in terms of liability management and outline how the
entire system must participate together to avoid program
key items that need to be addressed. failure. Lastly, reinforce the reason that franchisees buy into
the organization—they believe in the
Brand buy-in. When developing brand. Your program is an extension of
your program, you need to the brand and should enhance the
understand how the value brand and the franchisee’s stake in it.
proposition of the program will
support the brand. The program Compliance, QA, training. Develop
needs to mirror the overall brand initial and recurrent training around the
strategy. If you have sub-brands program. Build criteria around your
within your branding hierarchy, program into overall quality monitoring/
develop a program under the main evaluation processes. This will drive
brand to create fluidity and
consistency of the program, and to
—Marti Beller participation and awareness of the
President, Affinion Group program by franchisees and their
influence the strength of the employees.
program, which will affect how it’s
sold to franchisees. Create a program Reinforce the reason that
Technology landscape. The technology
that requires all locations participate franchisees buy into the within your locations is likely to be
whether they’re corporate stores or
organization—they diverse or disparate, especially within
franchises. This will help create
greater consistency around the believe in the brand. your franchised locations. Consider
solutions that solve for permutations in
delivery of the program, which will
available technology. Provide property
create a greater customer experience.
managers and owners the ability to report at a property level
Liability management. Franchises are business owners first on both financial metrics, as well as employee and customer
and foremost, and they need to understand how they benefit engagement.
from a loyalty program. Understand the financials and
financial management of how your program will work, and Turnover. You’ll need to solve for employee turnover when
how your franchisees will pay into the program and get developing your program. Create automation around
reimbursed for their upfront costs. Create a business case process to make things simple, rather than relying on manual
that highlights the ROI, and generates buy-in from a financial processes which can be difficult to train employees and
viewpoint, including a view from the franchise perspective difficult for employees to remember, especially if the
as well as the brand perspective. Build equality into the program actions are done infrequently.

14 Loyalty Management™ | Loyalty360.org


A: The success or failure of any
loyalty program is predicated on both A well planned out program
the value proposition and the
program’s design and execution. From
should remove most, if not all,
the franchisee’s perspective, the value of the administrative burden
proposition is based on what return from the franchisee
they will get for their investment.
When deploying a program through
the franchise channel, there has to be a set cost to the
franchisee for participation within the program. With strong
program execution it makes sense that the ROI to the valuable insights into
franchisee will be higher. The greater the return on their customer base
investment, the more the cost of the loyalty currency and giving them the
becomes redundant. Simply put, the more value the benefit of a more
franchisor can attach to cost of the loyalty currency, and the effective marketing —Bruce Silcoff
better the results, the more a franchisee will be willing to spend and ongoing President
pay. That is where design and execution comes into play. A communications. In Fairlane Group
well planned out program should remove most, if not all, of summary, the buy in
the administrative burden from the franchisee (i.e. web to the program has to
design and maintenance, customer service, warehousing & make sense and the return on the investment has to be clear
fulfillment, order management, data mining, communication, and attainable. The more freedom the franchisee has to run
marketing, merchandising, etc…). A well executed program the day to day business, and the more tools a loyalty program
will demonstrate an effectiveness to not only drive can offer them to help better their business, the more
incremental business to the franchisee, but also provide supportive they will be of the program.

A: If the franchises will be funding the


program with fees for example, typically they will
want to understand what the fees are based on Share positive results
and how they are being spent/used to support as soon as you are able
the program. If there are any competitive
benchmarks within your industry, it adds
to establish that the
credibility and helps to gain buy in on how you program is working
are structuring the program. We found that and driving retention
consulting our franchisees during development
was very helpful in achieving buy in on the
and incremental
overall value proposition as well. This included revenue.
reviewing financial projections with them and
incorporating their feedback on operational
processes we were developing. This is critical insight to have
so that what you build is user friendly for them on site—it
has a significant impact on their engagement.
will be clear to the —Jill Noblett
From a redemption perspective, acceptance is helped by franchisee how to Executive Consultant
reimbursing your franchisee fair value for what they are reconcile the centralized Formerly of Loyalty & Direct Marketing
providing to the member and then making sure there are records with his site Wyndham Hotel Group
standards around compliance that are monitored. This records. Most impor­
ensures that delivery to the consumer is consistent which we tantly, share positive results as soon as you are able to
all know is very important. Also, make the process for establish that the program is working and driving retention
reimbursement as simple and track-able as possible so that it and incremental revenue.

Q: Do you have a question for our panel of experts?


Write us at: Mailbag@LoyaltyManagement.com L

Loyalty Management™ | November 2009 15


LOYALTY FORUM: Behind the Brand/People

Phil Rubin
CEO & President, rDialogue

Phil has 20 years of strategic marketing experience


with an emphasis on loyalty and relationship
marketing, integrated communications, partnership
development, promotions and program development.
He founded the loyalty practice at Loyaltyworks and
led the spin-off and formation of rDialogue. Phil is
also a regular contributor to Loyalty Management; his
latest piece, “Loyalty Marketing Beyond Programs,”
can be found on page 50.

You ran the 2008 Chicago Marathon (congratulations), what are you training for now?
Thanks. Now I’m thinking about a new “Rock ‘N Roll” marathon in New Orleans on February
28th of 2010. I’ve started riding a road bike and am also looking to do my first triathlon.

Where do you find the time?


During the week I am up at 5am to get in my run
and still see my kids before school. Basically, I give
up sleep!

Which talent would you most like to have?


To be able to take off from the foul line and slam
dunk a basketball (on a 10 foot goal).

If you were not doing what you do today,


how would you be spending your time?
Probably trying to figure out what to do (it’s
depressing to think about not doing this!). And
then probably writing and/or teaching.
Phil and his brother at the Chicago Marathon

Which book(s)are you currently recommending?


I’m reading The Rockefeller Habits and Team of Rivals by Doris Kearns Goodwin (about
Abraham Lincoln).

If you could choose your last meal, what would it be?


Preferably something that goes with a perfect Bordeaux.

16 Loyalty Management™ | Loyalty360.org


“My father taught me the value of doing
what you love and loving what you do;
and of hard work, integrity and respect.”

What do you consider your


greatest achievement?
Having a great wife and two kids that
continually amaze (and tolerate) me and
make me very proud.
Beyond that, running a
marathon and having
an adult bar mitzvah
were great moments.
Professionally, it is very
gratifying to see the team
we have assembled at Phil and the rDialogue crew
rDialogue as well as the
Phil with his wife Debbie clients we’ve been able to What’s your customer
work with. engagement philosophy?
rDialogue = Relevant Dialogue. If you
Which person has made the want to engage your customers, create a
most impact in your life? meaningful value proposition and deliver it
My father. He taught me the value of doing at every customer touch point.
what you love and loving what you do; and
of hard work, integrity and respect. What can we expect from rDialogue in 2010?
We have several significant client programs
Superbowl prediction? launching and some very interesting new
For the first time in the history of the client relationships that should also lead to
franchise, the New Orleans Saints will take some new loyalty initiatives in the market
the Lombardi trophy. Drew Brees will be the next year. Our plan is to continue focusing
MVP and New Orleans will stay up partying on our core strengths (loyalty
for a week straight. strategy and program design)
and likewise continuing to
Please tell us about your last work with a diverse set of
ah-ha customer experience. clients in different industries.
This is the hardest question to answer There is so much opportunity
because those kinds of experiences are few out there (in the market) to
and far between. It’s probably with Suunto help companies better serve
(a division of Precor), who makes high and build relationships with
performance watches including those for customers!
training (running, cycling). I had a part break
and they sent me a new part without delay Word of advice for a
or charge. It was easy and, sadly, better than novice loyalty marketer:
Phil and daughter Jenna
I would have expected. I also just bought a Learn how to think like a
new bag from Timbuk2 and find them always customer, live your brand and
delivering a great customer experience. be economically vigilant like a CFO.
L

Loyalty Management™ | November 2009 17


LOYALTY FORUM: Behind the Brand/People

Maurice Johnson
GE Money
Maurice is considered an expert in Financial Services Marketing,
Lifecycle Marketing Strategy, Campaign Execution, Data
Segmentation Strategy Development and Strategic Project
Management. With over 10 years of consumer marketing
experience, he has worked with top brands such as: The Home
Depot, Lowes, Ethan Allen, Lenscrafters, Pearle Vision, Whitehall
Jewelers, Bernina ,and Ultra Diamonds.

When not working, what’s your favorite Which living person do you most admire?
way to spend your free time? Not one person in particular, but all those people
Visiting vintage resale shops. I love looking for that stood up for civil rights when physical or
clothes from the past, particularly the 60’s. Finding financial harm was the response. Even being
those funky outfits (pants, shirts, sweaters) that ostracized by your community or family for the
they just don’t make anymore and making it fit rights of others, takes a great deal of courage… no
into today’s wardrobe is cool! matter the race, gender, or sexual orientation of the
person.
Which sports team is your favorite?
I don’t really have the time to watch sports, but Which talent would you most like to have?
since I am from Chicago, I’ll root for any team from The ability to sing, not an ordinary voice
there regardless of the sport or skill.. I am more of a like many of today’s entertainers, but like a
big event person…. Olympics, super bowl etc… Stevie Wonder, Boz Scaggs or Sting.

Which book(s) have you been recommending? What’s your personal motto?
I generally go for the internet content or magazines. Limit pity parties to 15 minutes… There is no sense
But, I have been reading this book on Emotional in feeling sorry for yourself when things don’t go as
Intelligence. It’s really about cracking the code on planned… Move on already.
people skills and communication. Smarts are a
given when you get to a certain level, but the ability What have been your biggest challenges in 2009?
to motivate people , empathy, personality, and What can we expect from GE Money in 2010?
charm isn’t as easy for everyone.
I think 2009 is still shaping 2010 for most
companies. It brought a more informed and
If you weren’t working for GE Money, vocal consumer to the forefront. Consumers were
what would your ideal job be? questioning the true benefits of products and the
Well I love what I do, this would be purely value. We will continue to use our voice of the
imagination at work, but a teacher or counselor customer to make/sustain products that have value
who would develop tools to customize and improve for our customers.
learning opportunities to educate and support
individuals. Word of advice for a novice loyalty marketer:
• Know who is your customer
What do you consider your • Talk to your customer
greatest accomplishment?
• Gather a variety of options/solutions
Professionally, I’d like to think it hasn’t happened
yet… but growing a business from practically • Test/Pilot
nothing to over $1.5B is pretty good. Personally, • Talk to the customer again after the results
my time in the US army. Anyone that • Test again
knows me would say that being in such a strict
environment isn’t me, but I was much younger then • Develop a launch/ongoing multi-channel strategy
and appreciated the time to grow and mature. • Develop a contingency/exit strategy
L

18 Loyalty Management™ | Loyalty360.org


Comarch Loyalty Management

The last puzzle piece


in Customer Relationship Management
Loyalty | Business Intelligence | Customer Experience

For more information visit: www.us.comarch.com

Loyalty Management™ | November 2009 19


LOYALTY FORUM: Books

Loyalty Reads
Masterminds Unleashed:
Selling for Geniuses
by Nielsen, Greisen, Scholz, Smith, Paulson, Lunquist, Boykin, Kolster

Tired of just surviving when you would rather


be thriving? If you are ready to ramp up your
results and learn to sell without having to sell,
this book is for you.
The Selling for Geniuses provides in-depth knowledge and insight to business owners,
executives, entrepreneur and others who need to sell products and services effectively and
systematically – to any audience. This “how to” book’s techniques and concepts can help
anyone become a “genius at selling” without having to “sell.”
Chapters and individual authors include:
Sales is Not a Four-Letter Word—Susan Nielsen, Leaderscapes Inc.
The Four Point System—Lois Greisen, Eagle Assoc.
Selling is NOT Accidental—Chip Scholz, Scholz & Assoc.
Transformational Networking—Getting More Business in the Best Possible Way – David Emery Smith, Performance
Dynamics Systems
Micro-Marketing: Big Results with a Small Budget—Dan Paulson, InVision Business Development
Sell What the Client is Buying—Tracy Lunquist, Working Magic
Winning Formulas for Sales Presentations—Andre Boykin, CAPITAL IDEA
Be True to Yourself: You Don’t Have to Sell to Sell—Rick Kolster, Peak Performance Development.
This book is called Selling for Geniuses for a reason. You are a genius, and your business success will reflect that if you sell the
right way. It’s easier than you think, and the tools you need to make it happen are in this book!

Buyology: Truth and Lies About Why We Buy


by Martin Lindstrom
October 2008 | Broadway Business

How much do we know about why we buy? What truly influences our decisions in today’s
message-cluttered world? An eye-grabbing advertisement, a catchy slogan, an infectious jingle?
Or do our buying decisions take place below the surface, so deep within our subconscious minds,
we’re barely aware of them?
In BUYOLOGY, Lindstrom presents
BUYOLOGY is a fascinating the astonishing findings from his
groundbreaking, three-year, seven-million-
and shocking journey dollar neuromarketing study, a cutting-
into the mind of today’s edge experiment that peered inside the
brains of 2,000 volunteers from all around
consumer... the world as they encountered various ads,
logos, commercials, brands, and products.
His startling results shatter much of what
we have long believed about what seduces our interest and drives us to buy.
Filled with entertaining inside stories about how we respond to such well-known brands as Marlboro, Nokia, Calvin
Klein, Ford, and American Idol, BUYOLOGY is a fascinating and shocking journey into the mind of today’s consumer that will
captivate anyone who’s been seduced—or turned off—by marketers’ relentless attempts to win our loyalty, our money,
and our minds. Includes a foreword by Paco Underhill.

20 Loyalty Management™ | Loyalty360.org


Power of 2:
How to Make the Most of
Your Partnerships at Work and in Life
by Rodd Wagner & Gale Muller
November 2009 | Gallup Press

Many of the greatest accomplishments can be reached only by two people working together.
Tenzing and Hillary were the first to scale Mt. Everest. Malone and Stockton were the key to each
other’s success on the basketball court. Eisner was never as effective at Disney without Wells.
But while some partnerships reach
great heights, others fall short. Why do
Power of 2 will change some people click while others clash?

the way you think about What do great pairs have in common?
And what can you learn from the most
working with someone else. powerful partnerships to strengthen
collaboration in your work and personal life?
Based on Gallup’s groundbreaking research, Power of 2
details the eight elements that prepare partners to succeed in their most important endeavors. Rodd Wagner, coauthor of
the bestseller 12: The Elements of Great Managing, and Gallup World Poll leader Dr. Gale Muller share the science and the
secrets of successful collaboration.
Mixing key insights about human nature, field-tested discoveries, and inspiring stories of partnerships that reached the
pinnacle, Power of 2 will change the way you think about working with someone else.

➥Read an excerpt from Power of 2 on the following pages.

Creating Magic:
10 Common Sense Leadership Strategies
from a Life at Disney
by Lee Cockerell
October 2008 | Broadway Business

“It’s not the magic that makes it


work; it’s the way we work that
makes it magic.”
The secret for creating “magic” in our careers, our
Hear from Lee Cockerell,
organizations, and our lives is simple: outstanding
the Keynote speaker at the
leadership—the kind that inspires employees, delights customers, and achieves
Engagement Expo in Chicago this
extraordinary business results.
November. See pg. 59 for details.
No one knows more about this kind of leadership than Lee Cockerell, the man who ran
Walt Disney World® Resort operations for over a decade. And in Creating Magic, he shares
the leadership principles that not only guided his own journey from a poor farm boy in Oklahoma to the head of operations
for a multibillion dollar enterprise, but that also soon came to form the cultural bedrock of the world’s number one vacation
destination. But as Lee demonstrates, great leadership isn’t about mastering impossibly complex management theories. We can
all become outstanding leaders by following the ten practical, common sense strategies outlined in this remarkable book. As
straightforward as they are profound, these leadership lessons include:
• Everyone is important.
• Make your people your brand.
• Burn the free fuel: appreciation, recognition, and encouragement.
• Give people a purpose, not just a job.
Combining surprising business wisdom with insightful and entertaining stories from Lee’s four decades on the front lines
of some of the world’s best-run companies, Creating Magic shows all of us—from small business owners to managers at every
level—how to become better leaders by infusing quality, character, courage, enthusiasm, and integrity into our workplace and
into our lives.
L

Loyalty Management™ | November 2009 21


LOYALTY FORUM: Books

Introduction

Made for Collaborating


By Rodd Wagner and Gale Muller, Ph.D.
Excerpted from Power of 2: How to Make the Most of Your Partnerships at Work and in Life

© Copyright 2009, Gallup, Inc.

★★

FACE IT. Your partnerships could use some help.


If you are like most people, you’ve had some good ones. You may even have a few of them now. Yet chances
are you don’t make the most of the collaborative opportunities all around you. You are surrounded by potential
partners — colleagues, neighbors, friends, fellow volunteers. You know many people and they know you. But,
powerful partnerships — the kind in which you and a collaborator regularly work together, reach goals together you
never could have accomplished apart, and gain the deep satisfaction only such an alliance can bring — are elusive.
You almost certainly spend much of your time working alone on projects for which you alone are responsible,
feeling the full pressure of having to do the whole thing yourself, even the aspects of it that are not your
strength. And when, somehow, you struggle through and complete the job, you turn it in, perhaps get a little
recognition from your boss, and move on to the next requirement, which you will also do largely by yourself.
You are not alone in having this problem. Somewhere we got off track. Somehow our televisions, e-mail, headphones,
texting, car radios, and personal computers trick our brains into thinking we are with other people, interacting, when
we are, in fact, working in isolation. We are crowded in offices, airports, subways, frequently within arm’s reach of
dozens of people, but frequently on a very lonely pursuit. Wired? Yes. Networked? Yes. Collaborating? Not much.
Humans are made for collaborating. We like music because the songs of our deepest ancestors helped
them work together. Our blood pressure rises and falls depending on who is nearby. The amount we eat
depends a lot on the amount eaten by those with whom we dine. We laugh, not so much because something
is funny, but because laughter is a kind of social glue, making a person 30 times more likely to laugh when
he’s with someone else than when he is alone. Isolation can be as bad for a person’s health as smoking.
When you watch someone, a network of “mirror neurons” in your brain rehearses what he is doing, giving
you empathy, the ability to see things from his perspective. If one person in a conversation uses a certain
word — calls an object’s color “turquoise,” for example — the other person will probably use the same word
rather than a synonym such as “teal.” We unconsciously adjust our grammar and word choices to match what
the other person already said. It’s a subconscious way of signaling, “I agree with you.” This mimicry, one study
found, “is automatic and reflects the fact that humans are designed for dialogue rather than monologue.”
A person asked to lift a basket of potatoes with someone else’s help, before she touches the basket, will perceive
its weight to be lower than someone asked to lift the basket by herself. Having a collaborator changes our
perception of reality. We see the world differently through partnerships. “We plan our actions guided partly by
what we think we can achieve with others,” wrote one of the researchers who conducted the basket experiment.
In a world that emphasizes individual achievement — the successful CEO, the MVP, the star — we
often forget that everyone is descended from millions of people who survived because they didn’t go it
alone. In the thousands of years that molded human nature, our ancestors required not only individual wits
and strength, but also the ability to collaborate — to discern, trust, sacrifice, empathize, and intelligently
combine their efforts with someone else. “The evolution of human beings has consisted largely of adaptation
to one another,” wrote one commentator. Hunters who worked together were more likely to return with
a kill. Two men who agreed to help each other improved their odds of fending off mutual enemies.
Yet over time, humans created so many conveniences that we now can survive without each other. We live
indoors rather than in the elements. We can eat microwavable dinners rather than hauling in a fish net with
someone else. We no longer tell real stories around the fire; we turn on the TV and watch familiar strangers

22 Loyalty Management™ | Loyalty360.org


pretend. Cubicles and private offices were bad enough; at least we would pass each other in the hall or gather
for lunch. Now we can “telecommute,” staying in our home offices and emailing the work we did by ourselves.
Hiring managers are starting to report that the next generation “is so used to texting they don’t even know how
to carry on a basic conversation with other people.” We are collaborative creatures in a do-it-yourself world.
Although it will no longer kill you, this working isolation has its costs. The more good partnerships in your life,
the more likely you are to say you “experienced the feeling of enjoyment a lot of the day yesterday,” that you recently
“learned something interesting,” and that you’ve been doing a lot of smiling and laughing — all key measures of
your happiness. Even one strong partnership markedly increases your well-being over those who have none.
In the workplace, those with just one collaborative relationship are 29 percent more likely to say they will
stay with their company for the next year and 42 percent more likely to intend to remain with their current
employer for their entire career than those with no partnerships. Those who feel well teamed with one or more
colleagues are substantially more engaged at work; they generate higher customer scores, safety, retention,
creativity, productivity, and profitability for the business, and a greater level of happiness for themselves.
Yet for all of our collaborative instincts, most of us today form far fewer strong partnerships than we could, or
than we should. Gallup’s research reveals that the median number of work partnerships for an American employee is
just four, but even that low number hides a sadder truth. The small proportion of people who have dozens of close
teammates inflate the statistic. Asked how many strong alliances they have, most people say they have just a few, even
though the highest levels of happiness and employee engagement kick in when a person has five to 10 good alliances.
Perhaps the saddest statistic is that the most common number of work partnerships, the answer given by 16 perent
of the population, is zero. Asked if they have ever had a great partnership at work, one-quarter of employees say no.
“The sad thing is that I’ve never had a successful partnership,” one businessperson told us. “I’ve been
thrown into the leadership role in every single ‘group project’ or organized group outside or inside of
schooling. Every time, I have become the leader, ended up doing the majority of the work, and gotten the
majority of the credit. I’ve learned — again, sadly — that I’m better at taking care of my responsibilities
myself and not depending on others for creative success in my personal, artistic, or professional futures.”
“In thinking through my best and worst work partnerships,” said one manager at a medical device
manufacturer, “I keep seeing more experiences in the ‘worst’ column and a sparsely populated ‘best’ section.”
At the highest corporate levels, flying solo can bring consequences on all the employees and on
shareholders. As the two of us began circulating Gallup’s partnership discoveries inside some of the
world’s most prominent companies, we were surprised at how readily an acrimonious relationship
at the top came to mind among those who have to tiptoe around the landmines.
“Grace and Randy hate each other,” said one midlevel executive. “They say all the right things in meetings,
but that’s just for show. They have separate empires. You’re either on Grace’s team or on Randy’s team.”
Whether the rift is between the chief operating officer and the chief financial officer or between the top
marketing executive and the head of sales, such collaborative failures are never private, or trivial for the rest
of the organization. Companies that should be concentrating on the battle with the competition are instead
consuming their resources waging elaborate civil wars between the camps of Executive A and Executive B.
Equally troublesome is the concentration of power in the hands of a lone leader, whose human foibles
cannot help but be magnified under the pressure of having to be too many things to too many people.
“America’s most serious corporate governance problem is the Imperial CEO — a leader who is both chairman
of the company’s board of directors as well as its chief executive officer,” wrote former Northwest Airlines
Chairman Gary Wilson, who served on the boards of Yahoo! and Disney. “Such a CEO can dominate
his board and is accountable to no one.” Companies need, he argued, not one at the top, but two.
Seeing these patterns at numerous client companies, the two of us teamed up to lead what became a five-year
partnership to crack the code on collaboration to discover what elements are central for two people becoming
a successful team. We found the answers in some fascinating areas such as the way monkeys react when
working in pairs, in a computerized friend-or-foe contest that baffled the experts, in studies of revenge, and in
“irrational” acts of self-sacrifice. We also launched waves of original Gallup research to identify the dimensions
of partnership and determine how to best measure them. As we studied the stories of successful partners, famous
and obscure, these aspects came into stark relief. The answers were widely scattered, but when combined, they
make a cohesive set of insights you can use to make the most of your partnerships at work and in life.
L

Loyalty Management™ | November 2009 23


FEATURES

Engagement or Loyalty,
Does it Matter?
by Mark Johnson – Loyalty 360

What is driving the “PULSE” through Loyalty Marketing? Is it Engagement?


Is it Community based interaction? Is it mobile media? What is it and why
do so many seem confused, asking questions, and hesitant to implement
these new strategies and technologies?

W
e keep hearing that traditional marketing is Do we want our spouses to be engaged or loyal? (I hope my wife
dead, that the social and mobile media, communities/ is loyal). I know there are times that I am not as “engaged” with
forums, interactive communication, and “engagement my family as my wife probably wants me too, but as I stepped in
strategies” are creating a “voice of the customer” movement. front of a car careening through our neighborhood with kids (mine
Engagement is the new buzzword that we keep hearing. Yet what is and others) riding their bikes last week, you cannot question my
it? Is it the replacement for satisfaction, or is it the new loyalty or is loyalty. Isn’t that what employers, brands, and companies want;
it both; or something completely new? We hear that “if you do not someone to step in front of the proverbial “bus” for their product?
engage your customers, your clients, your employees, and those Those are the true brand advocates, the brand champions all are
who partake in your brand that you are doomed to fail.” looking for.

T
Yet the more that I speak with marketing executives he goal for Loyalty 360 was to
across industries; in a time where there are a create a forum (yes a community) where
record number of “experts” and “visionaries,” thought leaders and those who had a
there seems to be more questions now than Being able to question or a challenge could interact to get
ever before. use multiple a “pulse” on the loyalty, incentive/reward
The more I hear about Engagement, and yes, the “engagement marketing”
it all seems to me another tool to create, communication media arenas. We continue to see the market
augment and sustain loyalty. Do you
want “engaged” clients or loyal ones,
and technologies and looking for guidance. New buzzwords
such as “engagement,” “marketing 3.0”,
do you want engaged employees that the resultant data “social media,” and “communities” seem
as soon as the next (better) opportunity
comes along they jump at the chance
to market to your to be creating more questions than they
have answered. It seems that as soon as we
and leave (no loyalty)? Do you want stakeholders effectively begin to understand email, blogs, CRM,
engaged fans that as soon as their team goes “versioned” direct mail, customer centric
3-13 (like my Denver Broncos are going to
is the key. and integrated marketing communication
this season) they switch teams (no loyalty)? I things change. What was once MySpace is now
would argue no. Facebook.
Engagement is a precursor and eventual complement As soon as we begin to grasp all of the technologies of
to loyalty, the temporal part of the process by which you can create yesterday, we are now faced with Twitter, Facebook, communities
a long term interactive dialogue which customer satisfaction and (replacing blogs), e-coupons, and mobile media/commerce, print
Loyalty can be achieved. The ability to effectively understand the and email communications that use behavioral, loyalty, CRM and
behaviors, interests and perceptions of anyone who touches your other opt in database applications to create customize communica-
brand, whether that is your customers, your clients, your employ- tions such as variable data print, data drive email communications
ees or your brand participants is the key. Being able to use multiple and PURL’s, not to mention all of the opportunity for mobile and
communication media and technologies and the resultant data to social media. These new mediums are such a small piece of the
market to your stakeholders effectively is also equally important. loyalty communication’s landscape, yet we have experts that claim

24 Loyalty Management™ | Loyalty360.org


The more I hear about Engagement,
it all seems to me another tool to
create, augment and sustain loyalty.
Do you want “engaged” clients or
loyal ones?

We know that a
significant change is
taking place in the way
T
they know how to effectively administer raditional marketing
these programs. The new pundits tell us companies interact with strategies focused on attracting
that if you do not move to the new mea-
sureable forms of media and integrated
customers, suppliers, consumers through
marketing, using any and all media to
push

marketing communication your organi-


zation will not survive. However, is all of
end users and their achieve “eyeballs on the brand.” Now
we hear that that ‘Engagement is the
this constant change with the vanguard and employees. New loyalty,” “Small is the New Big” and
purported vanguard in media perorating to us “Web 3.0.” are the keys to success. If you
on what we should and should not do beneficial use engagement the way that Disney does, that
or confusing? I think of “The Paradox of Choice,” by everyone from each cast member to the CEO has a
Barry Schwartz and suggest all of this choice and all of this place and that place has to be respected for the organization,
chance may be causing some “paralysis by analysis.” merchant or employer to survive and prosper, then we are all better
We know that as marketing has entered the 21st Century, a sig- for it. That is engagement, but it creates the most sublime form of
nificant change is taking place in the way companies interact with loyalty. We read articles that the millennials do not want to be part
customers, suppliers, end users and their employees. Marketing, in of loyalty programs because they do not trust them, yet they have
the traditional view was thought of as a simple exchange process the highest measurable rates of same store purchases (Loyalty?).
(the four P’s), if you understood them and used mass/interrup- We are told that people do not trust loyalty programs, but 94%
tion type marketing you would be able to introduce, establish and of all US households belong to at least one program. Loyalty
sustain your brand; this was often referred to as transaction based 360 will continue to address these questions and help you walk
marketing. Yet now, we are in the “new world” of the empower through what can be a truly confusing era. We will give you the
populace, we are replacing (or attempting to) replace traditional opportunity to ask these questions, to interact with intra and cross
media with a new approach referred to as relational marketing. The industry experts. We know that this is the most dynamic period in
basis being that you use any, and all information you have about history. Loyalty 360 will work to provide you the unbiased insight,
your customers, your channel, your employees to make more in- the answers, the matrices, and the case studies and yes the forum
formed, timely and relevant communication decisions/interactions to increase both loyalty and engagement, yet if a new buzzword
in the form, channel and via the method they expect. Is that loyalty should surface we will address that too. We look forward to hearing
or engagement or both? from you. L

Loyalty Management™ | November 2009 25


FEATURES

Why Should We Care


What They Think?
by Carlos Dunlap – Kobie Marketing

I’m not going to waste my time telling you what The most interesting thing about him is his belief in a singular
you should be doing. approach with women. “Mark” would proposition each girl he
Capturing data, measuring unique transactions, acknowledging met in a social setting—between classes, at parties, while attending
loyal & valued customers, treating customers differently accord- sporting events—with the same offer: “Do you want to go on a
ing to their value, communicating with date with me?” This is no joke. Although
them in a relevant manner, analyzing I didn’t support it, this was a strategy he

You either believe


your results, enhancing your approach, firmly believed in and although he was
are all great strategies for making more rejected most every time—there were
money.
Here’s the truth. You either believe
in a measured, positive responses to his one question
approach.
in a measured, consistent approach to
customer engagement and its ability to
consistent approach Some in the loyalty marketing space
believe that you can determine a cus-
drive incremental profits—or you don’t.
Either way is okay. Really.
to customer tomer’s loyalty with a single question:
How likely are you to recommend? Mark
Because in the end, why does it really
matter what your customers think? Yes
engagement and believed his one question approach was
also a true measure of intent and affin-
I said it. Customer desires, affinity for
the brand and preferences are rendered
its ability to drive ity for him. Sometimes it worked in his
favor; however, most times it did not.
irrelevant to most marketers. Blanket incremental profits, Traditional marketing is much like
the one-size-fits-all approach. Pushing
the marketplace with cool creative print
ads and media. Just be sure to use kids, or you don’t. a brand or product by highlighting the
same features and benefits to everyone
animals or models to sell your products
or services. Otherwise, don’t waste your Either way is okay. doesn’t take into consideration the vari-
able buying-decision criteria of different
Really.
money. If you prefer direct mail, then
be sure to shower your purchased lists segments of customers. Without under-
with your best offer—usually some form standing the differences, value drivers
of price discount off of your premium and intent of the individual targets,
product. Hit it hard and often and you’ll see some sort of results. traditional marketing efforts are not motivating to the vast major-
And, the beautiful thing is you’ll get to do it again with a new piece ity of the targeted audience. Therefore, some new customers may
of test creative and new list of anonymous potential new customers. be of value and many will not be worth the acquisition expense.
Covering the market with a one-size-fits-all approach really isn’t And yes, a certain number of new customers can be claimed and
all bad. For example, I had the pleasure of attending a wonder- the campaign may seem initially successful, but many of the newly
ful university to obtain my bachelors degree. While there I met acquired customers won’t prove to be of significant lifetime value
a fellow “intellectual” who over time became an acquaintance. to the acquiring organization.

26 Loyalty Management™ | Loyalty360.org


D
irect Marketing is exactly like this, with a their corresponding attitude towards your brand.
few test variations—and hopefully a control group—to make Although I stated I wouldn’t talk about the best way to implement
us feel better about the excessive failure rates. Sponsorships a traditional loyalty program, you might be one of those who do care
continue to be an expensive proposition, without a measured benefit. about what customers think about your brand or your clients. Those
And then there’s mass advertising. of us in this discipline have a unique oppor-
Creative TV commercials win awards, tunity to make a measurable and therefore
yet they don’t necessarily move
product. And similar to sponsorships,
Pushing a brand justifiable difference. As loyalty practitioners,
we must do the right things. A trusted and
mass advertising is more about ego
than driving business success or
or product by well-rounded approach requires us to focus
on building loyalty strategies for the enter-
measurement. How many times have
we seen companies drop millions of
highlighting the prise, delivering a customer experience that
engages, and making every decision based
dollars on ultra creative Super Bowl same features and on the economic drivers of the program. It’s
ads, only to be out of business in a this measurable, justifiable component of our
matter of months? benefits to everyone trade that makes our services appealing and
I’m not anti Direct Markeitng. so valuable. Prove your worth and ensure
I’m a firm believer in a consistent, doesn’t take into that your clients view their customer loyalty

consideration the
measured approach to marketing, initiative as an investment and profit center,
acquisition and ongoing commu- rather than a cost bucket; and you’ll be a hero
nications. Most importantly, your
ability to measure the appeal and re- variable buying- in their organization, as well as your own.
In addition to “doing the right things,”
sponses to all your communications
may make all the difference in your decision criteria of maybe it’s also time to reconsider the need
to track and measure to the “nth” degree,
marketing efforts. Understanding
and predicting your response rates
different segments of provide hundreds of redemptions options
and accumulate millions of dollars in points
and the correlating financial benefits
will help you design and justify your
customers. liability. Maybe, just maybe, we don’t have to
do those things in such a scientific, statistical
campaign prior to its execution. manner to make a real difference.

W
In fact, a 2008 study by Caslon & Company provides a founda-
tion for predicting your response rates based on your customer hat if we designed loyalty programs that are not
strategy, combined with the incremental benefits of personalized branded and customer facing? We call these little “l”
communications. Upon review of their findings it appears that per- loyalty programs. By having our clients utilize an internal
sonalized communications will garner you on average a 50% higher system that keeps track of their customers’ value based on actual
response rate, regardless of your knowledge of your customers or transactional behaviors may not tell everything, but it will provide

Continued on next page

Loyalty Management™ | November 2009 27


Why should we care what they think? (continued)

you with enough information to provide a good experience for program concept with the aid of minimal franchisee fees, while
returning customers, including the ability to reward their loyal the franchisees were given meaningful tools to customize and
patronage with surprise & delight gifts. For customers who deliver an appropriate, consistent and “rewardable” experi-
make several transactions of a certain ence based on measurable customer
dollar, why couldn’t a company value. Knowing what each customer
reward that loyal customer with a Knowing what each is thinking is not the foundation of
surprise reward such as: a sample of
a premium product or a temporary
customer is thinking is not a good loyalty program. Treating
customers according to the profits
subscription to a service they don’t the foundation of a good they generate, or can generate, is the
already purchase. Of course there’s ultimate goal and the key to reten-
also the options of a free gift or loyalty program. Treating tion and sustained financial benefits.
discount off the next transaction, Keeping customers loyal takes
but be careful since this may dilute customers according to more than a few promotional strate-
the brand value.
the profits they generate, gies and free samples. Clients must

Y
ou don’t have to galvanize and align their organiza-
know what customers are or can generate, is the tions around a true commitment
thinking in order to use to delivering on consistent and
your marketing dollars more wisely. ultimate goal and the key good experiences for their custom-
Recently, I received an invitation ers. Employees function as internal
from a prominent organization to retention and sustained advocates, who continually breathe
to “send my son to Australia to
participate in a Foreign exchange
financial benefits. life and passion into a successful cus-
tomer loyalty strategy. Engaged and
opportunity.” While on the surface satisfied employees, combined with
this seemed like an interesting enriching opportunity, I good products, services and value, ultimately lead to engaged,
struggled with the offer. I have two lovely daughters and no satisfied, loyal and profitable customers.

A
son—to my knowledge. So this well-meaning organization,
that features the names of most of the presidents of the past 4 s an industry, we are at a critical stage in
decades, doesn’t have to know everything about me. However, our evolution. With the innovations in technology
they should at least know the basics before wasting their money that allow for more efficient behavior tracking, our
and my time with such a meaningless offer. industry has no more excuses for not “doing it right”—
There are some companies that have the inherent ability to whether the loyalty program has a foundation of research,
know their customers and personalize customer experiences on points and analytics or if it simply provides a good experience
a real-time basis. A couple of years ago I had the opportunity to every customer, with an occasional treat or offer. Either
to consult with one of the world’s leading brands, who boasts strategy can work, but a combination of a “science and
a network of more than 6,000 well-branded franchisees. art” approach might be best. If you want to have retention
Unfortunately, not much of the customer data made its way and ongoing earnings, then recognize profitable customer
up to the parent company, and the franchisees didn’t have behaviors and reward them accordingly. Because it’s not their
the ability, sophistication or know-how to provide rewarding attitudes or intentions, but instead their actual transactions,
experiences to their best customers. that result in a positive P&L. L
However, what those franchisees did have, by the nature of
the services provided, was a personal relationship with their best
and most frequent customers. The designed loyalty solution
called for critical alignment between the parent company
and franchisee network. Their loyalty strategy
yo u on
rner ardless
allowed the parent company to

ll ga
s wi ate, reg their
fund the overall

t ion
m unica sponse r mers or and.
ze d com gher re ur custo your br
so nali 50% hi of yo w ards
r
Pe rage a e
edg titude t o
e n ow l
av our k ing at
of y nd
orr espo
c

28 Loyalty Management™ | Loyalty360.org


knowledge. deliver y. results.
how motivating.
Let us motivate you.
At Affinion Loyalty Group (ALG), we offer ways to drive profitable behaviors among your customers using any means possible:
points, miles, rewards, incentives, enhancements.

Our years of experience ensure we acknowledge, understand and anticipate marketplace and consumer trends, helping us
design programs to motivate your customers’ behavior. Some of the most recognizable brands have employed our services
to develop loyalty solutions to meet their profitability goals. We believe loyalty should be a business strategy with a positive
ROI. And our proven loyalty solutions repeatedly result in profitability for our clients.

Visit us at www.affinionloyalty.com/loyalty or call 800.622.4863 to le n more about our loyalty


learn about
yalty our lo ar
marketing services and how we can help create loyalty between you and your customers.

Loyalty Management™ | November 2009 29


FEATURES

I’m Happy to be Here!


How Engaged Employees
Improve Your Bottom Line
(And Make it a Great Place to Work!)
by Dan Paulson – InVision Business Development

30 Loyalty Management™ | Loyalty360.org


The reality is employee
engagement is simpler than
you might think, but it’s
not easy. It involves some
discipline and trust on the
part of your leadership team
to make it happen, but if you
are committed, the positive
results can be tremendous.

Just Another Day at this well recognized brand fall so far? Many point to the economy
as the source, but in reality that was only a small factor in their
the Restaurant demise. After years of growth, the leadership saw a huge expense
Recently I walked into a local fast food restaurant. It was shortly on the books. Many of its veteran salespeople were making a good
after noon and the place was fairly quiet after the lunch rush. living doing what they did. Because of this, they were collect-
There were a few people in line as I patiently waited my turn. ing sizable bonuses. The solution: replace the experienced (and
The environment was as you’d expect, busy with the movement of engaged) salespeople with less expensive, less experienced ones.
people taking orders, cleaning, and making food. Once I reached This move, as a cost saving measure, brought the company down
the counter, I greeted the cashier. No response. Just a blank stare in the end. Without engaged employees who connected with the
as she waited for me to tell her what I wanted. I ordered one of the customer, Circuit City’s service level fell to the point that when
value meals to go since I was on my way to a client and decided it people became more discretionary with their spending, they went
elsewhere.
would be best to eat on the road (i.e. the tables hadn’t been cleaned
yet). After telling her what I wanted, and that it was to go, she said
about the only words I would hear from her in our exchange. “Will
that be to go?” I confirmed (again) that yes it would. She told me
Getting Them Engaged
what I owed. I paid the balance and stepped aside to wait for my The fact is employee engagement is a concern for almost every
order. business out there. As a business owner, leader, manager, or
This is a common experience we can relate to as consumers. It is employee there is much you can do to get people engaged.
also the stereotypical example of a lack of employee engagement. Engagement is about getting people involved in the emotional
Yet in many workplaces in every community, you see this type of interaction that takes place between you and your staff. In ad-
behavior taking place. For business owners it equates to lost sales, dition, it also involves the emotional connection between your
poor production, and costly mistakes. For leaders it is what keeps staff and the customer. Rarely do we focus on this. In business
us awake at night as we try to figure out how to get people to care we often treat our interaction with people as a process and not
a relationship. Our goal is to provide a consistent outcome with
about what they do.
little room for error. McDonald’s perfected this approach in the
restaurant industry years ago, and people have tried to adapt it for
The Costs are High other things as well. It could be a customer service program, or an
employee engagement program, or a “how do you handle difficult
The absence of employee engagement is costly. A business that has people” program. You get the idea. There is a strong need to apply
engaged employees will grow, on average, at twice the rate of a a simple solution to a complex problem because we want to make
business that lacks that commitment from their staff. In fact, the it easy. Putting a program in place to handle customer complaints
average American company loses 20 – 40% of its customers each makes it easy for the employee to respond. Unfortunately there has
year! For a company that has a million dollars in gross revenue, that yet to be a program written that covers ALL customer problems. By
could equate to as much as $400,000 in revenue that needs to be having employees follow a system without some ability to think on
replaced. This is often done through increased sales efforts, more their feet they are left at the mercy of the procedures in place. How
spent on marketing and advertising, and discounting products and many times have you heard, “That’s not our policy.”
services. These expenses erode the bottom line and can make it The reality is employee engagement is simpler than you might
difficult for companies to survive in difficult times. think, but it’s not easy. It involves some discipline and trust on
One of the best examples recently is Circuit City. Once praised the part of your leadership team to make it happen, but if you are
by Jim Collins in “Good to Great”, this company now only exists committed, the positive results can be tremendous.
as an online brand bought out of bankruptcy court. How could

Continued on next page

Loyalty Management™ | November 2009 31


I’m Happy to be Here! (continued)

10 Steps to Engaged Employees


To borrow a metaphor, you must get your people off the
bench and get them in the game. Any coach will tell you that People sometimes become
you can read playbooks all day long, but in the game when tools of the job and can be
you are in an environment that is constantly changing, you treated as such. Everyone
need to proactively take action as the situations change. In
business, here’s how you do it:
wants to know they matter and
they are valued. The value you
1. Set the compass. Time to dust off that strategic plan. place on them directly equates
Does everyone know your Vision? Is it communicated
regularly and does it define the purpose of each job
to their performance.
in your organization? It should. People are purpose
driven beings. Without a clear destination for the
need to be disciplined with their communication and
company and themselves, then any direction will
follow up with staff. Your staff needs to be disciplined
work. Incorporate conversations with your people
in their work and their follow through with your
continuously as part of this process.
customers.
2. Make leaders not managers. There is a huge differ-
6. Bring the fun back! People spend much of their life
ence between leadership and management. Want to
working. The last place they want to be is in an en-
see how effective your leadership team is? Here’s a
vironment where they dread. Create a culture where
quick test. See how many you can truthfully say yes
people have fun AND get things done. It is possible
to. Answer the following:
to create both.
a. Does it appear that employees enjoy coming to
work? 7. Find solutions. We are all taught to be good at
b. Is turnover lower than the average for your picking out problems. It’s a completely different story
industry? when it comes to finding solutions. Teach others how
c. Does it seem like your employees are doing the to overcome obstacles, find solutions and break it
right things? down into measurable action steps.
d. Does your management team allow people to
8. Celebrate success. Celebrating seems to be left
creatively solve their own problems?
for birthdays and retirement parties. Rarely do we
e. Is your manager doing the work he/she is sup-
celebrate the feats we accomplish in business. These
posed to be doing and not taking on employee
milestones are just as important because of the hard
tasks?
work and dedication of your staff. Recognize their
3. Make your people experts in building relation- work and they will be motivated to do it again.
ships. Develop the emotional intelligence within
9. Treat people like people. Sounds simple, but the
people. Give them the knowledge to effectively
stresses of deadlines, calls from customers, and fires
interact with people, read people, and communicate.
that need to be put out often get in the way. People
4. Allow people to work creatively within the guide- sometimes become tools of the job and can be
lines. Lands’ End founder Gary Comer once said that treated as such. Everyone wants to know they matter
an employee is allowed to take any action necessary and they are valued. The value you place on them
to take care of the needs of the customer. Employees directly equates to their performance.
often found creative solutions to take care of cus-
10. Look ahead instead of looking back. Often we get
tomer problems and their service became legendary.
focused on where we have been instead of where
5. Develop discipline. People need to be disciplined we are going. This is true with our staff. They are
in their commitment and approach to the needs of measured on past performance instead of future
each other and the goals of the business. Discipline potential. Give people the opportunity to be success-
provides structure where needed and creates ac- ful and the support to do it. The difference you make
countability to ensure things get done. Your leaders could pay for itself ten fold. L

32 Loyalty Management™ | Loyalty360.org


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Dare to be different!

You don’t have to settle for a “me too” program.

Discover loyalty strategies that stand out.


At Fairlane Group, it’s all about results!

34 Loyalty Management™ | Loyalty360.org


“Engaging People for Better Results”
Loyalty • Incentives • Recognition

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For more info, please contact bluefish@fairlanegroup.com

Loyalty Management™ | November 2009 35


FEATURES

Give Back...Get Back


by Athena Golianis – AGW Idea Group

“We make a living by what we get,


we make a life by what we give.”
For years, companies such as Patagonia, The Body Shop, and Ben & Jerry’s have been
embracing these words of Sir Winston Churchill. By creating a value proposition based on social
responsibility they have made buying their brand more than just a purchase, or working for the
company more than just a job. They have given customers, employees and other stakeholders a
way to be a part of something that is bigger than themselves and a meaningful way to connect to
their company. And in the process, they have created a competitive advantage.

36 Loyalty Management™ | Loyalty360.org


B
usinesses are always striving for ways to of the employees who are satisfied with their company’s com-
set themselves apart from their competitors. If mitment to CSR:
stakeholders—customers, employees, shareholders, and • 82% feel their organization is highly competitive in the
others—perceive two companies are similar in their offerings, marketplace
the businesses must find ways to differentiate themselves. A • 75% feel their employer is interested in their well-being
growing number of companies are taking the lead from these • 71% rate senior management as having high integrity
socially responsible pioneers and are striving to integrate a • 67% feel that senior management has a strong sense of
well-designed, appropriate, and proprietary Corporate Social direction
Responsibility (CSR) program into their business strategy. Clearly, employees are more engaged and proud brand
They are realizing that CSR is not a buzzword. It is not a ambassadors when they feel their companies are socially re-
flavor-of-the-month initiative. It is not flash of positive PR. sponsible. And research shows that this engagement unlocks
At its core, CSR is not only an opportunity to give back to human potential and leads to better performance overall.
society, it is also a proven strategy to build and foster an overall The Towers Perrin Global Workforce Study (October 2007)
positive company reputation, increase engagement and loyalty found that companies with the highest percentage of engaged
of stakeholders, and ultimately, gain a competitive edge and employees collectively increased operating income 19% and
positively impact the bottom line. earnings per share 28% year to year. On the other hand, com-
panies with the lowest percentage
of engaged employees showed
Authentic CSR year-to-year declines of 33% in
drives employee When a brand operating income and 11% in
engagement earnings per share.
and loyalty contributes to society
Employees have the power to beyond its functional Consumers Prefer
either reinforce or break a brand’s Cause-Supporting
promise every time they interact benefits, ‘giving Companies
with a customer, shareholder or
even employees. That is why it’s back’ translates to Just as employees want to be
aligned with socially responsible
vital to focus on your employees
and build your brand from the ‘getting back’ in terms companies, consumers are
looking for brands that champion
inside out.
The problem is that many of forging stronger the issues they believe in when
deciding to buy a product. They
companies are starting behind
the eight ball because overall, emotional bonds with want to feel part of something
today’s employees are disengaged.
According to popularly cited
its consumers. bigger than themselves, and
connecting themselves to socially
statistics from Gallup Employee responsible brands is an effective
Engagement Index, 29% of way to achieve this.
employees are actively engaged in their jobs, 54% are not- Take TOMS Shoes, for
engaged, and 17% are actively disengaged. In other words, a example, which was founded on a simple premise: with every
whopping 71% of the workforce is not engaged in their jobs, pair purchased, the company gives a pair of new shoes to a
causing productivity, performance and profitability to suffer. child in need around the world—what the company calls its
So how do companies engage their employees? We know “One for One” model. A clear example of using the purchasing
that today’s employees expect to care about what they do. They power of individuals to benefit the greater good, TOMS has
want work that is challenging, stimulating and fulfilling—both become one of the fastest growing shoe companies of all time.
emotionally and spiritually. This is what CSR is all about. In Since its launch in 2006, TOMS has given over 140,000 pairs
fact, study after study has found that when employees under- of shoes to children in need, and plans to give over 300,000
stand how their company’s CSR initiatives make a difference additional pairs of shoes in 2009.
in their jobs and in their communities, engagement levels rise. As TOMS shows, when a brand contributes to society beyond
For instance, a May 2007 survey conducted by Sirota its functional benefits, ‘giving back’ translates to ‘getting back’ in
Survey Intelligence revealed that employees who are satisfied terms of forging stronger emotional bonds with its consumers.
with their company’s commitment to CSR are likely to be Research shows that TOMS’ consumers are representative of
more positive, more engaged and more productive than those society overall. According to the 2008 Cone Cause Evolution
working for less responsible employers. In fact, Sirota found Study, by cause brand strategy firm Cone Inc., consumers are
that when employees have a positive view of their employer’s drawn to companies with strong CSR efforts:
CSR commitment, employee engagement rises to 86%; when • 85% of Americans say they have a more positive image
employees don’t have a positive view of their employer’s CSR of a product or company when it supports a cause they
activities, that level drops to 37%. The survey also found that care about.

Continued on next page

Loyalty Management™ | November 2009 37


Give Back...Get Back (continued)

• 79% say they would be likely to switch from one brand to

As Anita Roddick, another, when price and quality are about equal, if the other
brand is associated with a good cause

founder of The Body • 38% percent have bought a product associated with a cause in
the last 12 months

Shop, once said, Cone went further and put these statistics to the test by conducting
an experiment with 182 consumers. Consumers were split into two

“If you think you’re


groups and were given either a magazine with generic retail advertis-
ing or one with cause-related retail ads. They were then given real
money to purchase products with the following results:
too small to have an • A 74% increase in purchases for a shampoo brand when associ-
ated with a cause. Nearly half (47%) of the participants who saw
impact, try going to the cause related message chose the brand, while only 27% of
those who saw the generic corporate ad chose the brand.

bed with a mosquito.” • A 28% increase in purchases for a toothpaste brand when associ-
ated with a cause. Nearly two-thirds of the participants (64%)
chose the targeted brand compared to only 50% who view the
corporate ad.
Based on these results it’s clear that consumers are happy to reward
companies that give back both with goodwill and with money.

CSR is not about how you spend the


money you make. It’s about how
you make the money you spend.
Companies such as TOMS Shoes, Patagonia, The Body Shop, and
Ben & Jerry’s know how to utilize CSR as a powerful integrated
business strategy, not an add on, and to brand it. They understand
that an authentic CSR effort needs to be aligned with the long-term
goals of the company and, therefore, be a fundamental component of
their corporate mission, culture, identity, and reputation.
What’s alarming, according to a recent McKinsey Quarterly survey,
is that despite the fact that the majority of CEOs are well informed
as to the business benefits of strategic CSR, fewer than 20% of
organizational leaders claim they are very effective at aligning their
social strategy with business objectives and engaging stakeholders in
the process.
To drive alignment and create CSR efforts that have real impact,
the first steps CEOs (as well as CMOs, HR directors, etc) need to
take is to make sure their initiatives:
• Have involvement and support of senior officers
• Understand that the image and reputation building process starts
with the philanthropic and business interests of the company
• Be communicated to the stakeholders—i.e. build awareness
• Be perceived as (and be) effective and results-oriented (perfor-
mance and sales)
• Be associated by stakeholders as “fitting” with the company (and
integrate with/reinvigorate) existing programs
As Anita Roddick, founder of The Body Shop, once said, “If you
think you’re too small to have an impact, try going to bed with a
mosquito.” In these challenging times (and even in times of great
abundance), companies, employees and consumers can all work
together to better the world dynamic by being of service. In doing
so, we help others and can grow a business in a meaningful way. L

38 Loyalty Management™ | Loyalty360.org


Loyalty Management™ | November 2009 39
FEATURES

Excerpt from: The Next Discipline Applying Behavioral Economics to Drive Growth and Profitability.

Customer Behavior is
Influenced More by
Emotion than Reason
by Gallup Consulting

B
usiness leaders, researchers, academics, and more for those products, returning more often, and staying
management consultants alike have expressed concern longer with the business. Rationally satisfied customers, on
that while customer satisfaction may be a necessary the other hand, behave no differently than customers who are
foundation for building strong customer relationships, by itself dissatisfied.
it is a relatively poor predictor of future customer behavior and This pattern is not limited to customer satisfaction
organizational financial performance. Our data support this responses; in fact, we see the same pattern for customer ad-
concern. Results from a large number of case studies suggest vocacy. Findings from a large number of case studies suggest
that customers who are extremely satisfied—those who provide that customers who describe themselves as strong advocates
the highest rating of overall satisfaction with an organization’s for an organization’s products or services—those who provide
products or services—fall into two distinct groups: those who the highest “likelihood to recommend” ratings—also fall into
are emotionally satisfied and those who are rationally satisfied. two distinct groups: those who are emotional (even passion-
Emotionally satisfied customers have a strong emotional ate) advocates and those who are merely rational advocates.
attachment to the organization while rationally satisfied Emotional advocates have a strong emotional attachment to
customers do not. Our research reveals that emotionally the organization while rational advocates do not. Our research
satisfied customers deliver significantly enhanced value to an reveals that emotional advocates—like their emotionally
organization, for example, by buying more products, spending satisfied counterparts—deliver significantly enhanced value to

Figure 1

40 Loyalty Management™ | Loyalty360.org


For many organizations,
incremental improvements
in operational efficiency may
continue to provide some
costreduction benefits, but in
our view they, too, will yield
little in the way of additional
competitive advantage.
Figure 2

an organization, buy significantly more products, spend sig- relationships. Beyond confidence lies Integrity, the essential
nificantly more for those products, and give a greater share of dimension of fair play. Does this organization treat me the way
their total spending to the business. Rational advocates, on the I deserve to be treated? If something goes awry, can I count on
other hand, behave no differently than customers who would this organization to fix it quickly? The next emotional require-
not recommend the organization to others. ment is Pride, a sense of positive association and identification
with the organization. Customers feel pride not because of what

S
o if these two traditional standby metrics fail their association with an organization says to others, but more
to deliver as advertised, how can we accurately gauge importantly, because of what it says to them about themselves.
customer sentiment? Taking a cue from behavioral The ultimate expression of a strong emotional attachment is
economics, scientists at Gallup Passion. Passionate customers de-
developed a method to measure—
reliably and accurately—the Emotionally satisfied scribe their relationship with the
organization as irreplaceable and
emotional connections between
customers and the organizations
customers deliver a perfect fit. Passionate custom-
ers are customers for life and are
that serve them. Our research significantly enhanced worth their weight in gold.
also sought to demonstrate the
linkages between this measure value to an organization... As illustrated in Figure 2,
our research revealed that
of customer engagement and
crucial business performance
by buying more products, across organizations of differ-
ent types, customers who are
metrics, including customer spending more for those fully engaged—those customers
retention, cross-sell, share of
wallet, frequency of purchase, products, returning more who have a strong emotional
connection to the organization—
profitability, and relationship
growth.
often, and staying longer represent an average 23%
premium in terms of share of
The resulting work suggests with the business. wallet, profitability, revenue,
that there are four key dimen- and relationship growth over
sions, as illustrated in Figure 1, to a customer’s emotional the average customer. In stark
attachment to an organization (along with the more rational contrast, actively disengaged customers—those customers
foundational elements typically associated with customer sat- whose emotional connection to the organization is weak or
isfaction). Each dimension represents a specific set of activities absent—represent a 13% discount. At a local business unit level
that meet customers’ emotional needs. (a store, branch, sales team, or other local unit), those whose
The first dimension of emotional attachment is Confidence. levels of customer engagement place them in the top 25% of
Is this organization trustworthy? Can its employees be trusted comparable units within an organization tend to outperform
do what they say they will do day in and day out? Confidence all other units on measures of profit contribution, sales, and
is the foundation on which higher levels of emotional attach- growth by a factor of two to one. Clearly, engaging customers
ment are built. But confidence alone is not enough to build on an emotional level has a significant financial benefit. L
long- term, sustainable, and emotionally connected customer

Read Gallup Consulting’s whitepaper, “The Next Discipline Applying Behavioral Economics to Drive Growth and
Profitability” in its entirety at Loyalty360.org.

Loyalty Management™ | November 2009 41


FEATURES

Integrated Customer
Marketing ™

A systematic approach to delivering customer


interactions that create competitive advantage
and drive shareholder value
by David Williams – Merkle

Marketing Integration’s Perfect Storm In 2007, Forrester Research found that just 9% of marketers
at or above director level at major companies said their customer
Achieving customer-centricity has been a desire of marketers and
communications were “very integrated” across channels. Two years
business leaders for decades. But the tools, capabilities, and support
later, the numbers haven’t moved much. Preliminary results of a
needed weren’t readily accessible—until recently.
new Forrester study commissioned by Merkle indicate only 17%
Today, key trends make marketing integration a financial
of senior marketers and managers say their companies’ customer
requirement, and the availability of technology, data, and ana-
and prospect communication activities are “very integrated” across
lytic know-how has finally made establishing a customer-centric
marketing, sales, and service (Figure 1).
organization realistic and practical. For the first time, companies
Some—but by no means all—of the major obstacles that have
are creating competitive advantage by managing their customers
prevented a customer-centric focus include:
for profit.
• A lack of executive support
• Organizational designs
Introduction • Compensation and incentive systems
Twenty years ago, Philip Kotler defined marketing’s role as setting • Measurement constraints
the strategic direction for the organization and its interaction with • Business models
customers for the purpose of satisfying needs of a target market • Data capture capabilities
at a profit. Importantly, Kotler advised that marketing activities • Analytic capabilities
should be manifest in all the activities of an organization to • Perceived high cost
create customer value. He suggested that this customer-focused, • Focus on short-term results
integrated approach to marketing would bring the strongest short-
and long-term results.
Despite the strong desire of marketers and business leaders to
become more customer centric, the tools, capabilities, and support
needed to implement an integrated approach simply weren’t avail-
able. Instead, the concept of marketing integration was applied and
tested within marketing campaigns, business units, and channels as
a tactic for improving short-term results.
Still, marketers remained eager to apply the concept as a strategy
across the entire organization. They took steps toward that goal
by embracing concepts such as customer relationship marketing,
1-to-1 marketing, integrated marketing communications, and
others. But organizations have yet to fully integrate the marketing
function by engaging the entire enterprise in building customer
lifetime value. None of these approaches achieved full, customer-
centric integration because they did not take into account the
activities of the customer.

42 Loyalty Management™ | Loyalty360.org


Today, virtually all these obstacles can and must be overcome. Optimizing value is a tiered process, built by nurturing lasting
Twenty-first century business realities, talent, and tools have relationships over time:
converged, making customer- centric marketing both practical and • Increased relevance creates increased engagement
urgent. Marketing integration’s perfect storm has arrived. • Increased engagement creates increased satisfaction
This paper, the first in a series, discusses the opportunity offered • Increased satisfaction creates increased behavior
by fully integrating the marketing function across the enterprise • Increased behavior creates increased value
and the obstacles that have prevented marketers from implement- • Increased value creates increased returns
ing this strategy. The paper introduces a systematic—and most In a fully integrated, customer-focused organization, marketers
importantly, customer-centric—approach that makes integration play multiple, vital roles across the enterprise and at the highest or-
both practical and realistic to implement. Merkle calls this new ganizational level—often working with top executives to establish
approach Integrated Customer Marketing™. company-wide strategy as well as financial and operational goals.

Deploying fully integrated, customer-based marketing—and


Why Integration is Crucial Today seizing the accompanying opportunities—has become an increas-
Despite pouring billions into customer acquisition and loyalty ingly urgent need.
programs, many initiatives fall short because marketers are unable In its 2009 study of more than 400 CMOs and 20 business and
to draw a direct, measurable connection between a customer’s academic leaders entitled “Calibrate How You Operate,” the CMO
interaction and the resulting behavior. This disconnect arises from a Council found that global marketers are seeking stable operational
lack of enterprise-wide integration and a continued myopic focus on platforms to contend with unstable market dynamics. Their goal:
product marketing rather than customer marketing. “When business “To achieve substantive performance gains that drive top-line
units are named after products, it’s hard to be customer focused,” says revenues and sustainable corporate growth,” cited the report.
Penn State’s Gary Lilien in a recent issue of Marketing NPV® Journal. Among the actionable key insights uncovered in the study was that
Little has changed since the nineties, when the term integrated inadequate data-sharing across the enterprise consistently hindered
marketing typically described public relations, advertising, direct the ability to effect process and operational changes. According to
marketing, and promotions working together to deliver a consis- the report, “Integration of platforms and processes is critical.”
tent message to a target audience across multiple communications Today’s consumers have far more control and choice than ever
channels. The modern definition of “fully integrated marketing” is before about where, when, and how to interact with brands.
far more expansive and emphasizes structured collaboration among Instead of a relative handful of customer touch points, marketing
most, if not all, other departments. With shared language, metrics, and other departments within their organizations must keep tabs
and strategy, the entire enterprise is able to work together toward on dozens—if not hundreds—of data points about their custom-
the common goal of achieving maximum customer value from ers. The tidal wave of digital media has overwhelmed marketers
each relationship. and rendered traditional customer interaction models inadequate.

Continued on next page

Loyalty Management™ | November 2009 43


Integrated Customer Marketing™ (continued)

A
I N D U S TRY V O I C E S uthor Christoper Vollmer, a partner with Booz & Company, writes in
his Spring 2009 article for strategy+business that the digital explosion has transformed
“Knowing that the competitive landscape into a survival of the fittest; “a kind of ‘digital Darwinism.’”
At this critical juncture in marketing, Vollmer’s message to marketers is simple: Evolve or die.
60 percent of your Some organizations have responded to the competitive threat by reorganizing and shift-
ing resources to capitalize on the online opportunity. But because the “customer ecosystem”
loyal customers are encompasses multiple channels and media platforms, the tactic is more a reframing of the
old product-centric focus to make it work in the digital world rather than a next step in
profitable is useless marketing’s evolution. Solving problems that have plagued marketers and their organizations
for decades, effectively competing in a brutal marketplace, and seizing opportunities as they
if you don’t know emerge, requires organizations to adopt a new dynamic.

which ones to court


Financial Trends and
with what level Competitive Opportunities
of service.” “Marketing operations has started to
resemble an untended garden—packed
with potential for growth and output, but
—Werner Reinartz and V. Kumar, constrained by the increasing complexity of
operating at a global, Internet-fueled pace,”
authors, “The Mismanagement of
noted Donovan Neale-May, executive
Customer Loyalty,” director of the CMO Council, in a recent
Harvard Business Review news release. The situation Neale-May
describes directly impacts customer value
and ultimately, the financial worth of an
organization.
Neale-May’s observation also suggests
In the past, the customers
significant opportunities and financial a company lost didn’t
rewards await companies that overcome
obstacles to marketing integration. If matter as much to Wall
companies maximize individual customer
value, the entire customer portfolio is en-
Street as the number of
riched and maximized. When the portfolio customers acquired. That
is maximized, then shareholder value is
maximized. However, for the rich harvest point of view is changing
to be reaped, the neglected garden to which rapidly, particularly in the
Neale-May refers must first be straightened,
nurtured, and cultivated. current economy.
Many customers aren’t happy. Some are
downright angry. Companies with whom they’ve had long standing relationships don’t seem
to know them or their needs. They’re sent duplicate and sometimes competing offers. After
making a purchase, they must navigate maddening in-bound telephone prompts and then
patiently wait on hold before they finally reach a representative. They’re frustrated by ecom-
Many customers aren’t happy. merce sites that aren’t user friendly. Often, they experience the negative effects of conflicting
internal policies and decide to take their money elsewhere.
Some are downright angry.

I
Companies with whom n the past, the customers a company lost didn’t matter as much to Wall Street as the
they’ve had long standing number of customers acquired. That point of view is changing rapidly, particularly in the
current economy. Author and Assistant Professor of Marketing at the University of Florida,
relationships don’t seem to Michael Lewis, writes that researchers have recently noted that the health of a company—its
know them or their needs. value and future prospects—is often best understood by analyzing its customer base.
The business case for fully integrating the marketing function extends well beyond achieving
campaign response rates and monthly sales quotas. As Lewis implies, current research strongly
suggests it may only be a matter of time before shareholders and analysts include among key
evaluation criteria the health, stability, and long-term value of an organization’s customer base.

44 Loyalty Management™ | Loyalty360.org


I N D U S TRY V O I C E S

“Customer-centric marketing makes no


assumptions. It begins with ‘who is your
consumer, and what’s different about her?’
It sounds like such a simple question, but if you
went to more companies and asked that question,
you wouldn’t get a very satisfactory answer.”
—Jim Stengel, Global Marketing Officer, Procter & Gamble,
as quoted in “Magnosticism”

When the customer portfolio is maximized, then shareholder A lack of a coordinated, enterprise-wide approach has clouded
value is maximized. the ability to view customers across the organization.
Merkle describes this corporate asset—the pool of customers Top company executives aren’t typically involved in marketing
currently engaged with an organization’s brand—as the customer strategy and that’s problematic, too. Without C-suite leadership
portfolio. According to Merkle President and CEO David and active involvement in the development of universal metrics,
Williams, marketers need to start thinking of themselves as respon- including the relative value of different customer segments to the
sible for the management of a financial organization as a whole, the opportunity
asset. “Marketers are the true managers to integrate in a way that builds long-term
of the customer portfolio,” Williams says. Launching an initiative value becomes increasingly difficult.
Launching an initiative to accomplish
to accomplish full full integration across a vast and complex
Why is Integration
So Difficult to Accomplish? integration across a vast organization is also understandably
daunting, which is why so few companies
Historically, most organizations have and complex organization attempt it. Those who initiate enterprise-
struggled in their attempts to implement wide implementation as a single work
a systematic approach to delivering is also understandably “project” rarely succeed. Day-to-day
customer interactions that drive value. daunting, which is why so demands usually place the effort as a low
priority and the complexities involved
The reasons are complex and numerous.
A lack of a coordinated, enterprise- few companies attempt it. make integration seem impossible and
wide approach has clouded the ability to impractical, especially when undertaken
view customers across the organization. without a framework that provides a clear
Without an approach that involves enterprise management, it’s pathway.
been impossible for most companies to develop a common cus- But the short- and long-term benefits outweigh the obstacles.
tomer segmentation strategy that makes sense to all departments, The organizations that use a systematic framework and view in-
all the time—rather than in response to fluctuating departmental tegration as a multi-step journey, rather than a marketing project,
goals or a single campaign’s objectives. are best positioned for success. Organizations that implement
Basics, such as routine customer data collection sharing and integrated marketing stand to achieve both incremental and sus-
accessibility, have been long-standing issues in many organiza- tainable advantages. L
tions. In reporting the results of its April 2009 Data Management
Survey, DMNews reported that only 31% of respondents—253
top company and marketing executives, directors, and managers
from across the US—said their companies integrate data collection Read the complete, “Integrated Customer Marketing”
channels. When it is already difficult or impossible for one depart- whitepaper with additional information on:
ment to access customer data collected by another department, What is Integrated Consumer Marketing?; Building ICM
for instance, the prospect of successfully implementing a strategy
involving enterprise-wide sharing and collaboration is often viewed Currencies; and ICM in Practice, at Loyalty360.org.
with great skepticism.

Loyalty Management™ | November 2009 45


TECHNOLOGY, TRENDS & REWARDS

The New Plastics:


Driving Share Through Competitive Analytics
by Caitlin Schar

T
he financial downturn, high unemploy­ need—how can retailers and financial institutions become
ment rate, and increased costs for basic goods and laser focused on the most valuable and productive data?
services, have put retailers and card issuers in a trying There are a variety of ways retailers and banks can get an
and complex situation. Consumers aren’t spending. They are edge on their business through insightful data and the sig-
limiting purchases to necessities, and any purchases that can nificant amount of information available to them today. The
be delayed—big and small—are. Those who are spending internal customer database is the first line of defense in terms
are looking for a deal, a discount—any way to conserve cash of building a good competitive offense. Generally speaking,
and spend less. As retail sales decline, competition for the customer retention is more cost effective than customer ac-
active consumer increases—retailers and card issuers alike are quisition—and the purchase behaviors and patterns evidenced
searching for ways to increase both share of wallet and overall by a retailer’s CRM database set the stage for the development
market share in a challenging economy. of most of the marketing initiatives that will be put in place.
Hopefully, recovery is on its way. But until then, and even Industry sales data is another tool to be exploited to full
after, what’s a retailer and card issuer to do? effect. The National Retail Federation is one good resource. In
In 1967—the answer was “plastics.” Today, the magic word addition, there are a number of websites which provide various

I n 1967—the answer was


“plastics.” Today, the magic
word is “analytics.”

is “analytics.” We live in an age of information with far more types of data, such as retailnet.com; plunkettreseaarch.com, as
tools and technologies than ever before. However, despite the well as industry bloggers like Barbara’s Retail Industry Blog
advances overall, accessing competitive data in the retail indus- at About.com (www.http://retailindustry.about.com/b/) and
try has become increasingly difficult as economic pressures and Wall Street research reports.
regulatory restrictions have caused companies to progressively Affinity Solutions (www.affinitysolutions.com), which
reduce the amount of information that is made public. Given works with retailers and financial institutions to build online
that, getting access to competitive data has become harder by and offline relationship marketing programs, has come up with
the minute. a unique solution to the challenges of sourcing, aggregating
Why is data so important? Because this information unlocks and analyzing competitive data. Through its work managing
the door to successfully managing the three p’s—product, hundreds of loyalty programs for financial institutions, Affinity
pricing and promotion. For retailers, the key to winning in this Solutions has access to a unique data set of consumer behavior
environment lies in the ability to make better decisions in these and purchasing information. Affinity Solutions President and
critical areas. Closely aligned with that is the need to focus on CEO, Jonathan Silver, and his team saw an opportunity.
new customer acquisition—today more than ever—as the land “Not only were we hearing our customers’ data and insight
grab is now. Across the nation, customers who were once loyal requests increase, but because of the tumultuous markets, they
to particular retailers must find new places to shop in the face wanted as much information as they could get, as quickly as
of a rash of retailer bankruptcies. Finally, retailers must focus they could get it. We knew that through our work we were
on ways to increase loyalty among existing customers while sitting on a treasure trove of data, and we knew that if we could
increasing the average ticket, maximizing every store visit. design a way to repurpose it for our clients, that would be an
So, in this age of information—where there is too often invaluable resource. The only logical solution for us was the
too much to wade through and not enough of what you really development of the Affinity Dashboard™,” says Silver.

46 Loyalty Management™ | Loyalty360.org


Most retailers tend to have a lot of data and information on
their existing customers through their own transactional
database and primary qualitative and quantitative research,
but are very limited as to competitive spend.

So, how does the Affinity Dashboard™


help retailers compete?

S
ilver explains that the Affinity Dashboard™ information from Affinity Solutions’ database of the 60 million
provides a window into the spending patterns of 60 cardholder transactions. The data is aggregated across all of
million debit and credit cardholders and their daily Affinity Solutions’ financial partners to ensure that they are
transactional behavior. With the increasing need to know capturing a truly representative sample of data that accurately
when and where consumers are spending, the timing of the represents the movement in the retail environment.
available data has become the ultimate attribute of the Affinity While retailers and card issuers remain challenged in today’s
Dashboard™. economic landscape, there is hope on the horizon and real-
“This is actual, real-time data, delivered to retailers in an time tools and strategies that can be effective today. More data
easy, customizable format,” explains Silver. “We wanted to give with a focus on competitive analysis is one of them.
our retailers a leg up by allow-
ing them to compare their own
data with their competition in Through its work managing hundreds of loyalty
real time. Most retailers tend to
have a lot of data and informa- programs for financial institutions, Affinity
tion on their existing customers
through their own transactional Solutions has access to a unique data set of
database and primary qualita-
tive and quantitative research, consumer behavior and purchasing information.
but are very limited as to
competitive spend. The Affinity
Dashboard™ fills in the gaps with a focused look at not other- “The Affinity Dashboard™ is the only solution that offers a
wise easily available competitive analytics.” unique insight into the spending pattern of 60 million card-
In terms of usability, the Affinity Dashboard is designed holders and the ability to target key customer segments within
so that customers can walk into their Monday sales meetings them,” Silver said. “These tools give us the inside view of how
knowing how their competition did the week prior. we can develop the programs and strategies that will allow us
Silver describes the process behind Affinity Dashboard™ as to emerge as winners as the economy steadies and begins its
fairly simple. Each week the varied data points and modeling inevitable climb back up.” L
tools of the Affinity Dashboard™ are updated with the latest

Loyalty Management™ | November 2009 47


TECHNOLOGY, TRENDS & REWARDS

Loyalty Alternatives
Create my own currency or use theirs?
by Erin Raese

M
arketers spend a lot of
time discussing customer loyalty
solutions. Often these discussions
revolve around the creation of a loyalty
program—spend this, earn points, get that.
Most all of us can agree, these programs are
effective if done correctly. However, as a
practitioner handed the word from above,
“increase our customer retention rate by and engage by offering these miles to the
20% this year”, one can feel overwhelmed best customers. This is especially helpful for
and unsure of the most efficient and effective smaller companies. If you have less than 100 to create a unique value proposition for the
way to approach this demand. Many will locations, leveraging a currency with broad consumer and the brand. Some popular
recognize this bottom line driven necessity appeal and wide recognition will allow you to examples are found in the restaurant indus-
as huge mountain to climb, and remain not only increase transactions and basket size try—Rewards Network, Restaurant.com,
daunted with the task of determining the with existing customers, but also give people OpenTable.com, and Passport Unlimited.
easiest, safest and most efficient way to get not yet a customer a stronger reason to choose Each of these organizations offer discounts
to the top. or added value to the consumer
Loyalty programs are for dining; for the restaurant
definitely a great solution for You now have the opportunity to they provide marketing, new
many organizations. However,
initial and ongoing investment,
utilize the same marketing customer acquisition, increased
retention with new and existing
continuous analysis, unique strategies involved in running your customers and the analytics to
promotion and finding proof own program, but without the cost support the marketing efforts.
These programs specifically
in the statistics to support this
type of strategy are slippery and commitment of developing Rewards Network and Passport
steps up the mountain side. The your own currency. Unlimited are membership based
programs where consumers must
good news—there are options.
The most basic alternatives raise their hand to participate.
involve utilizing various communication you over a competitor. You’re offering them This type of active consumer has proven to
vehicles and your database to support cus- something additional—something that they be more active and engaged therefore bring-
tomer engagement strategies. Incentive and WANT. ing larger, more frequent transactions to the
recognition can be achieved without points. participating merchants.

C
However, if your management is convinced onsumers like this strategy

T
that a program structure is the answer—there because it allows them to bundle hese alternative options
are cost effective alternatives. their earnings into one currency. This are a great way to learn, engage
Are you aware that many organizations, provides higher and stronger redemption customers, and increase sales without
that have made the commitment and the value, opposed to earning less from multiple the commitment of your own loyalty
investment in developing their own currency, vendors with different currencies (where it program and program currency. Often
are open and willing to sell their currency to can take much longer to ever earn enough organizations use these options as a stepping
you? You now have the opportunity to utilize to collect a reward). Top currencies to stone to learn what works and what doesn’t
the same marketing strategies involved in look at are airline and hotel programs, or for their customers as well as a way to identify
running your own program, but without the credit card programs like American Express their customers and glean information and
cost and commitment of developing your Membership Rewards and Citibank’s Thank insights from them.
own currency. For example, a business cater- You program. For more information or help determining
ing to the small business market could choose Another popular alternative is to tap into which direction is best for your business, visit
to buy miles from their hub airline. These coalition programs. There are a number of Loyalty 360 — The Loyalty Marketers Association
miles become the loyalty initiative; incent organizations bringing like brands together (www.loyalty360.org). L

48 Loyalty Management™ | Loyalty360.org


TECHNOLOGY, TRENDS & REWARDS

Online Video Can Be


Very Engaging
by Mike Jais – Graphics Plus Inc.

T
oday, the need to engage and retain customers the customers experience with your product. Remember trying to
to spend their remaining dollars with you has never been replace your first windshield wiper? I do. What about fixing your
more important. Online video can help you engage them. computer or software how-tos, wouldn’t it be great to get off the
I’m not talking about the crazy, wacky videos, but rather using phone with customer service and plug in online for a visual walk-
informative online videos that engage current and potential through? Apple has some great examples of video tutorials on their
customers in different ways. Trends for using online video are website. Check out how they use video to demonstrate how to use
positive. As connection speeds get faster, the number of views and the Apple iLife software (www.apple.com/ilife/tutorials).
length of views are increasing, which
should be good news for marketers Testimonials—Who better to
worried about short attention spans. It is much easier to explain the benefits of your service or
Online Video is becoming more
widely used... Before I describe ways to engage customers product than your best customers? A
video testimonial gives them the ability
use online videos, it helps to understand
why this medium works so well. First, it
in a visual medium to talk directly to your prospects, and

is much easier to engage customers in a than it is with printed because your customers are talking peer
to peer, you can reduce the time involved
visual medium than it is with printed
words. Video lets you demonstrate
words. Video lets you in building trust. Testimonials usage
isn’t just for infomercials anymore—it
your idea — with action, with humor, demonstrate your idea— is growing as a tool for engaging both
with the credibility of a great presenter.
Ask yourself: Would you rather read an
with action, with humor, consumers and employees and we will
see in the near future wide use across
instruction manual or see an actual dem- with the credibility of a the marketplace. Need an example? Visit
onstration? Additionally, people respond
positively to seeing a person on the other great presenter. YouTube (www.youtube.com), –type
“Testimonial” into the search box (there
side of the conversation; a stronger con- are thousands, I’m sure). Disney uses
nection occurs when one can see facial video testimonials frequently and well,
expressions. Finally, with online videos, prospects can get a closer for an excellent Disney sample view Disney’s: “Dream Makers” /
look at the features and benefits of products, or view testimonials “Testimonial” on YouTube.
from current users.

Engaging Ways to Use Online Video When you decide to use online
videos consider the following....
Advertising—Forget the sales pitch. People are getting tired
of traditional advertising. Be authentic and try to use real people Production costs for online videos are significantly lower than
and places. Create a compelling message that answers how you traditional 30 second media spots allowing you to create and build a
meet the viewer’s needs and provide a call to action which can tie library. Further, data can be collected that can help identify whether
directly to a purchase opportunity. For an example, JP Morgan consumers are merely satisfied or truly loyal. Did they recommend
Chase just launched their Ultimate Rewards program; they’re using the video to a friend? Additionally, cookies will be replaced by deep-
online video advertising to teach us about the program (www. packet inspection (DPI), which monitors the pages consumers’
ultimaterewards.com). Additionally, several companies including visit, the emails they send, and every search entered online. Just
VideoClix (www.videoclix.com) can add interactive hotspots to think of serving up videos based upon who is looking, versus the
your video that allow viewers to see more product information or content of a page. Incidentally, the FTC is developing guidelines
even make purchases. The interactions can be tracked and all the regarding privacy concerns that this practice raises, including the
viewer needs is Adobe Flash Player. invisibility of the data collection to consumers and the risk that the
information collected—including sensitive information regarding
Tutorials—Learning from a live person produces a better health, finances, or children—could fall into the wrong hands.
understanding of the information that is being presented, as Two final points to remember. Tag the video right so it is search
opposed to reading the material. Printed instruction manuals can engine friendly. Make sure the video is high quality. Low quality
be frustrating because the information might not be clear or there is video will not keep the consumers attention and will leave them
too much or too little information. Reducing frustration enhances with a negative impression of your business. L

Loyalty Management™ | November 2009 49


BEST BUSINESS PRACTICES

Loyalty Marketing
by Phil Rubin – rDialogue

More than twenty years after the first frequent flyer program, loyalty
marketing is still largely defined and equated with frequent flyer-type
programs. It’s an easily accepted and digestible paradigm:

Loyalty = Rewards Program | Spend and Get | Earn and Burn


Email marketing | Discount cards

M Customers Are Loyal To Brands,


arketers, and more importantly CFOs, understand
that building relationships with existing customers Not Marketing Programs
delivers a superior ROI. So as loyalty marketing takes
When kicking off new projects with clients we often ask what
hold and evolves as a core marketing discipline, we need to think
brands people are loyal to. While it might be surprising, most
in broader and more different terms than simply equating loyalty
responses to the question have little or nothing to do with loyalty
marketing with “programs.” While customer marketing, especially
programs.
in companies with large numbers of customers and transactions,
If you want further validation simply send a Tweet or post the
must be programmatic to scale, it doesn’t always have to appear to
question via LinkedIn or Facebook. You’ll see that many of the
customers as a “program.”
answers include long established package goods brands and mega-
brands like Apple, Nike, Coca-Cola and Harley Davidson.
Part of the reason for this is that epic brands, by definition, have
strong emotional components. Loyalty is an emotional allegiance
and in our context, that allegiance is ultimately to the individual
brand. In our experience, brands are what people believe in and
have relationships with, not loyalty programs. The loyalty strategy
is the means to that end, and really a part of the brand strategy.

50 Loyalty Management™ | Loyalty360.org


Beyond Programs
What If I Don’t Have an Epic Brand? First, let’s review some examples of brands with high customer
loyalty, and strategies that are not typically associated with “loyalty
Not every brand is a Coke. There are plenty of industries, companies
programs”:
and brands that do not merit loyalty in the emotional sense, even
from their most valuable customers. Thus, there are also different Service and Experience
ways to define customer “loyalty” that are just as important and
often equally as profitable. n Zappos
This is where we can make the important distinction between n Nordstrom (though they do have a great loyalty program)
emotional connections and habit, which relates to the idea of con- n Verizon (though they have a very mediocre loyalty program)
sistency, predictability and a fair amount of unconscious behavior. n USAA
It’s easy to miss the subtle differences here but when are you defin- n Disney
ing or executing a loyalty strategy, it’s fundamental. n Four Seasons
These companies are so good at serving their customers that
they effectively create a real opportunity cost of doing business
Loyalty Marketing Better Defined
elsewhere, largely due to the inferior experiences of others. Zappos,
Thinking about loyalty marketing beyond programs requires Nordstrom, Verizon and USAA all excel at customer service.
thinking about the desired customer behavior and then how to Disney and Four Seasons are incredibly effective at providing a
identify, manage and drive those behaviors from customers. consistently flawless experience.
A premise of loyalty marketing is that not all customers are
created equal and thus do not all require the same investment. Product Quality or Uniqueness
Loyalty marketing is that part of marketing focused on investing n Apple
in the development, management and optimization of profitable n BMW
customer relationships. n Coca-Cola
In simpler terms, we like to define successful loyalty market- n Harley Davidson
ing initiatives as being in a place where we can push buttons (i.e.,
deliver communications, offers and promotions) and drive new, Let’s face it, there are some brands whose products are so good
recurring and incremental revenues. they don’t necessarily need to do offer much more than what the
product delivers on its own. Sometimes, these companies are argu-
ably not that great at customer marketing. They are all, however,
Okay So If It’s Not Just Programs, amazing in terms of creating and delivering excellent products.
Then What Is It?
Continued on next page
The answer is…it depends. There are a number of variables that
should drive what loyalty marketing looks like for any given
brand and the list is too long to cover here. Just like brands are
unique, loyalty marketing should be as well, even though all too
often it isn’t!

Loyalty Management™ | November 2009 51


Loyalty Marketing Beyond Programs (continued)

Recognition And Relevance:


n Amazon
n Netflix
Sadly there aren’t many more of these…at least not at this level.
There are very few brands that use customer data better than Amazon.
They recognize you, what you like, what you’ve bought and what
you’ve shopped for. And they create a highly relevant experience for
you every time you visit them. Just open one of their emails to be
reminded how well they do this.

Four Questions To Guide


So customer loyalty is one thing. How should we really pursue loyalty
marketing?
Brands are what If you’re not sure, the overriding factor is to determine whether your
marketing—and ideally your overall business strategy—is customer
people believe in and centric.

have relationships with, Here are four questions that would lead us to believe that your
company is capable, if not already practicing, loyalty marketing:
not loyalty programs. 1. Can you easily identify a majority of your customers (how
The loyalty strategy is to contact them, what and when and where they buy)
and do you use that as a basis for better understanding
the means to that end, them?

and really a part of the 2. Are those customers engaged, opted-in and responsive
to communications?
brand strategy. 3. Are you able to drive new revenues and profits from
those customers in a measurable, consistent and even
predictable way?
4. Are the activities related to the above questions build-
ing measurable and sustainable value, with increasing
expertise, effectiveness and meaning, for all parties?

The Challenge
The best loyalty “program” in the world is only as good as the brand
it supports. The loyalty program has to flow from the brand strategy
and the broader business. The best loyalty “programs”—strategies—are
often a way to package or merchandise a collection of brand benefits
and value drivers that a company is already providing to some (if not
all) customers.
The best brands are iconic and absolutely incomparable to other
brands in their space. There is only one Apple, only one Nordstrom
and only one Amazon. They should all have correspondingly unique
loyalty strategies. Assuming your brand is unique, why shouldn’t yours
have one too? L

52 Loyalty Management™ | Loyalty360.org


BEST BUSINESS PRACTICES

Building
Advocacy
Before the
Purchase
by Doug Fleener – Dynamic Experiences Group, LLC

M
ost companies and experts look at the
relationship businesses have with their customers in three
steps with seven stages. Known as the Customer Relationship
Lifecycle. (CRL) the three steps and seven stages are:
Most companies think that only buyers
Pre-Purchase
1. Awareness 2. Knowledge 3. Consideration
can be advocates, but the fact is that
some of your best advocates may not
Purchase
4. Selection or trial
have made a purchase yet—and maybe
they never will.
Post-Purchase
5. Satisfaction 6. Loyalty 7. Advocacy

Too bad so many companies take this approach because it has a 2. Make it a company goal to deliver an amazing and
huge fundamental flaw. What’s missing? Advocacy. Most companies delightful experience to every single customer.
think that only buyers can be advocates, but the fact is that some of I love the retailer who told me that her goal is to have every cus-
your best advocates may not have made a purchase yet—and maybe tomer who leaves her store feels better than when they came in.
they never will.  ow the experience is delivered varies from retailer to retailer but
H
Smart retailers focus on building advocacy during the pre-purchase what doesn’t vary is that retailers who deliver a superior experience
step for three reasons: have identified the steps to delivering the experience. It’s usually
• To potentially turn non-buyers into advocates. a combination of activities including a warm welcome, a drink or
some other gesture, and may include a surprise that delights the
• To lead more buyers into becoming advocates.
customer. The easiest way to get customers to advocate your store
• To use the advocacy elements to influence the consideration is to give them something to tell others about. What happens in
stage and improve the purchase potential. your store that your customer will most likely tell a friend or family
member about?
To focus on creating advocates in the pre-purchase stages, consider
3. Capture contact information for all visitors. Retailers who
the following:
only capture the contact information at the point of sale are losing
1. Teach your employees that some non-buyers actually revenue opportunities and potential advocacy by non-buyers.
create a lot more revenue than the average customer Give the customer a reason to give you the contact information in the
spends. As a matter of fact, some studies have shown that in pre-purchase phase and you’ll increase the number of post-purchase
some businesses the highest spending customers are not the most people.
effective advocates. This is why we like to teach all retail employees So let me ask, is building advocacy in your pre or post-purchase
to never label a customer as “just a looker.” stage? L

Loyalty Management™ | November 2009 53


BEST BUSINESS PRACTICES

Measuring Engagement:
Simplicity is Key
by Bob Konsewicz – Maritz, Inc.

It’s All Over The Board Tie It To Profitability


The definition of “engaging people” has an incredibly wide When selecting attributes to measure engagement, it’s
range. Just a simple internet search on the topic will generate important to link them directly to profitability. For example,
hundreds of unique perspectives and opinions. Some tracking how many times a customer visits your store is a
companies characterize engagement as a simple response to a meaningful metric that correlates to engagement, but if that
call to action while other companies describe it as a strong and customer never makes a purchase, it may not be a behavior you
unwavering advocacy for their brand. want to encourage. The same is true for a salesperson that sells
Sales and marketing strategies designed to influence behav-
truckloads of one of your products, which is a strong indicator
iors (or “influencer” strategies) are built upon the premise of
of engagement. However, if those sales are at the detriment
driving deeper engagement with their brand – whether it be
of up-selling higher margin products, it may not be the most
with consumers, channel partners, direct sales teams or em-
suitable attribute in measuring engagement. At a high level, the
ployees. The bottom line is that regardless of how engagement
art around measuring engagement can be grouped into two
is defined by your company and its respective “influencer”
strategies, it must be measured. broad categories, attitudes and behaviors.

Keep It Simple Attitudinal Metrics


Measuring engagement can be challenging. It’s nearly Measurements around people’s attitudes towards a brand
impossible to derive one comprehensive metric since it are derived using research techniques. They may consist of
encompasses too many attributes and, quite frankly, too many satisfaction scores and /or quantitative results from primary
varying opinions on what engagement really means. A more research and/or focus groups. Although such techniques offer
meaningful approach is to break engagement down into bite- meaningful information on how people perceive the brand,
sized components that are agreed upon and can be tracked and they seldom provide a comprehensive picture of engagement
measured on an ongoing basis. Simplicity is the key and will without the inclusion of behavioral metrics. In addition, it’s
allow for a more focused and concentrated effort in influencing sometimes difficult to link attitudinal measurements directly
those factors that create deeper engagement. to profitability.

54 Loyalty Management™ | Loyalty360.org


When selecting attributes to measure engagement,
it’s important to link them directly to profitability.

Behavioral Metrics sales mix in a sales channel program or increasing the categories of
products purchased in a consumer loyalty program. In both cases,
Measurements around people’s behaviors are typically easier to the greater breadth of activity leads to a more extensive relationship
capture and track. And there seems to be general consensus that
with the brand and thus, becomes a significant measurement of
actual behaviors are meaningful indicators of engagement. Plus,
engagement.
they can also be linked directly to your company’s profitability. For
example, if an “influencer” strategy creates more sales of high margin
product, it directly impact profits. Measuring engagement through Method Three: Modeling
behavioral metrics can be accomplished in a variety of ways.
A more sophisticated and predictive approach to measure behaviors
is through modeling. In modeling, advanced analytical techniques
Method One: Scoring are used resulting in predictive scores. A good example of modeling
Scoring techniques are one of the fastest ways to convert behaviors is lifetime value analysis, which can be applied in a variety of
into measurable metrics. They can be sophisticated or simplistic “influencer” strategies. Lifetime value analysis allows your company
in nature. The first step is to determine the desired behaviors that to know where to invest dollars to motivate individuals through
associate closely to your company’s definition of engagement. The relevant communications, campaigns, and rewards.
second step is to rank or weight behaviors by importance. From
there, a scoring algorithm is created that can be used to record the Summary
progress of behavioral changes. Scoring algorithms can also track
the impact of stimuli, such as relevant communications, marketing Even though the definition of engagement may be all over the
campaigns, or rewards. board, it’s important to keep things simple when measuring the
impact of “influencer” strategies. It’s easy to get bogged down
with attempts to develop a comprehensive metric. So keep
Method Two: Breadth Of Activity it simple. Choose two or three key behaviors and/or attitudes
“Breadth of activity” is another useful approach using behaviors that are known to drive stronger brand engagement. Make sure
to measure engagement. The concept generally applies to all kinds they can be measured and tracked and that they relate closely to
of “influencer” strategies – whether it be increasing the product profitability. L

Loyalty Management™ | November 2009 55


BEST BUSINESS PRACTICES

LOYALTY PROGRAM PROFILE:

Rock Bottom
MUG CLUB®
Probably one of the more unique restaurant loyalty programs out there.
Why? They are, “The club that rewards you just for visiting.”
So simple, yet so right! There is no effort to making this program
work. Simply show up, sit down, eat, drink and be CHECK OUT THE COOL PRIZES1:
merry. Provide your Mug Club card to your server, and with your
check Rock Bottom provides a Mug Club statement, which tallies
5 visits: Logo Pint Glass
not only visits, but also number of pints you have consumed. 10 visits: Mug Club Baseball Cap
25 visits: Growler Cooler
Once you have accumulated enough visits for your reward, there 35 visits: Mug Club T-shirt
is no need to go through a lengthy or time-consuming redemp-
50 visits: Mug Club BBQ set
tion process. Nope — your waiter brings you your prize. It’s like
a little gift you may not have even anticipated when you walked 50+ visits: Every 10th visit after 50, get $10 Club Cash
through the door. On numerous occasions — as our visit
totals climbed — we were surprised when our waiter 120 pints: Plaque in 1/2 Barrel Club
*Prizes subject to change
showed up with our prize or let us know that we had
earned a $10 Club Cash award — AWESOME! The $10
Club Cash can often be immediately deducted from your total bill
or saved for a future visit (these do expire). Things to know…You must be 21 to join the Mug
Club. You must register your card online providing at
“We even got a tour of the brewery, least your name and address or email. As always, be
sure to visit the website for full terms and conditions.
from the brewmaster himself, and an
education on the beer making process. PROGRAM PROS
Way to make us feel special.” •Program is FREE!
Beer fans have another club goal to strive toward. After 120 pints •Earn credit for visits.
they are made permanent honored members in the ½ barrel club •Special upsized mug for members.
where their name is added to the side of a half-barrel in their local •Cool prizes, zero hassle.
Rock Bottom. Seem silly? Depends how serious are you about your •Attainable program goals – initial prize awarded
micro-brew! Did I mention Mug Club pints are just a bit larger than
the standard size beer order? At some locations, you get to drink
(& instantly redeemed) after just 5 visits!
out of your own specialized mug. We haven’t taken advantage of
this feature — but I have seen the steins hanging above the bar at
a local RB. How cool is that! PROGRAM CONS
Additionally, when you register your Mug Club Card you get in- •You must have your Mug Club card with you.
vites to cool events like special beer tappings. We even got a tour •Only one visit and four pints can be counted per day.
of the brewery, from the brewmaster himself, and an education on
the beer making process. Way to make us feel special.

Verdict: THUMBS WAY UP! All you have to do is show up (bring your Mug Club card); Rock
Bottom does all the legwork. Oh, and I should mention the food, beer and atmosphere do keep us
coming back again and again. Try the ballpark pretzels, yum!
Each issue we’ll be sending our secret shopper out to experience a particular brand first hand. Our shopper will sign up for the loyalty
program, if one is available, and interact with the company at least three times, then share their experience with all of us. Your suggestions
for the next brand review are welcomed: email your suggestions to mailbag@loyaltymanagement.com

56 Loyalty Management™ | Loyalty360.org 1Rock Bottom. July 9, 2009. <http://www.rockbottom.com/MugClub.php>


sneak peek

Loyalty Management™ | November 2009 57


sneak peek

November 18 & 19, 2009 • Chicago, Illinois

Everyone is talking about engagement. What does this mean to you?


Whether it’s engaging your customers or your employees, discover the latest
theories, understand their effectiveness, learn about the new trends and
determine how to incorporate social media effectively into your strategies.

Brought to you by Loyalty 360 and ePrize, the Engagement Expo is a forum
to openly discuss today’s challenges and their solutions by bringing together
best-in-class speakers and partners. Join us for the inaugural Engagement
Expo, to connect with leaders from companies around the globe - seeking a
better understanding of engagement and loyalty.

The top three areas of focus for the Engagement Expo are:
•Insight into what engagement means and how to manage that across the
multi-cultural, multi-faceted employee and client constituencies.
•Social networking and how to leverage this in your marketing communication
strategies to create more engaged participants. Tools such as best practices,
processes and analytics will give you much more granular insight.
•Cross over of emerging (wireless, mobile) and traditional medium to make the
most of your engagement marketing strategies.

Mark Johnson
President & CEO
Engagement Expo

58 Loyalty Management™ | Loyalty360.org


sneak peek

creating the magic:


how great leaders earn
loyalty & drive engagement
keynote speaker

Lee Cockerell
Disney’s top trainer
& former EVP of Operations
for Walt Disney World Resorts

Learn from Lee Cockerell, the former Executive Vice President of Walt Disney World, how
to create DISNEY magic in your organization; which begins with world class employee
performance, leads to committed loyal customers, and finally to strong business results.

“… Lee Cockerell delivers his ideas about leadership in a common


sense way that can really reach people and help them improve their
effectiveness at work, at home and in their communities.”
- Ken Blanchard, co-author of The One Minute Manager and Leading at a Higher Level

LEE WILL DISCUSS THE FOLLOWING:

•four management & leadership competencies •how vision statements work & why they are
•four customer expectations vital
•four employee expectations •the most important behavior of a leader
•the customer experience cycle •what a leader’s real role is
•why the customer does not come first •the ten common sense strategies that enable
•why loyalty is not enough your organization to create magic too…just like
•why job & purpose must be clear to every Disney
employee

Don’t miss this opportunity to learn from Cockerell about creating magic in
your own organization and business. You’ll come away with valuable skills
in leadership, customer service and employee engagement.

Loyalty Management™ | November 2009 59


getting to know … Lee Cockerell
Engagement Expo Keynote speaker and former Executive Vice
President of Operations for Walt Disney World Resort

First Disney childhood memory?


Well, Mickey Mouse was always there so I remember
him most.
As the Senior Operating Executive for nine
years, Lee led a team of 40,000 Cast Members Favorite Disney movie?
and was responsible for the operations of 20 The Lion King … great leadership example for
resort hotels, 4 theme parks, 2 water parks, children and adults. The music is fantastic.
a shopping & entertainment village and a
sports and recreation complex, in addition to
Favorite Disney theme-park ride?
the ancillary operations which supported the
number one vacation destination in the world. Rock ‘n’ Roller Coaster … How can you not like going
zero-to-sixty miles an hour in two seconds? When
One of Lee’s major and lasting legacies was my grandchildren were young, I spent a lot of time in
the creation of Disney Great Leader Strategies,
Fantasyland on the slower rides.
which continues on as the primary resource for
developing the 7,000 leaders at Walt Disney
World. He is now dedicating his time to public If you were a Disney character which would you
speaking, authored a book on leadership, be and why?
Creating Magic…10 Common Sense Leadership Tigger. He and I spent a day together when I joined
Strategies From a Life at Disney (Loyalty Reads Disney and we understand each other. He and I are
pg. 21), and performs leadership and service both high energy.
excellence consulting for select companies, as
well as the Disney Institute.
If you could…Which Disney character would you
most like to work with and why?
Buzz Lightyear. I would love to hitch a free ride to
infinity and beyond.

Which talent would you most like to have?


I wish I had musical talent. I would love to be able to
sit down at a party and play the piano.

“Treat everyone with respect, make them feel special, treat


them as individuals and develop and educate them so they
can have a better life.”

60 Loyalty Management™ | Loyalty360.org


sneak peek

Most memorable Disney customer experience? What inspires you?


A man called my office one evening at 5 pm. My Teaching others about leadership, man-
assistant told me that he was calling to report
agement and service excellence. I love it
that the monorail was broken. I immediately
took the call. It turns out that his grandson’s when they call me back years later and
toy monorail broke and he called Disney Guest thank me.
Service to find out how to get it fixed or replaced,
but could not reach anyone as Guest services
was operating on limited hours to save money
(something I was not aware of). Over the years he Which people have made the most impact in
and I became good friends. His call taught me how your life?
important it is to take a guest’s call. After his call My mother and grandmother. My mother taught
we did not operate the guest services department me discipline and my grandmother taught me that
on limited hours any longer. everyone is important and to be kind to everyone.

How do you inspire Magic in others? Most defining moment in your career?
Treat everyone with respect, make them feel Getting fired from a job in 1973 that my wife
special, treat them as individuals and develop and Priscilla told me not to take. I told her, “I know
educate them so they can have a better life. what I am doing.” The hotel went bankrupt 90 days
after I got there. I now listen to Priscilla. The day I
What’s your personal motto? was fired she did not even say, “I told you so.” We
“Be careful what you say and do as they are have now been married 41 years because I learned
watching you and judging you.” to listen to the experts at home and at work.

What are the qualities you most admire in a Share with us your last customer “ah-ha”
person? experience.
Humility, trustworthiness, and passion for what A guest wrote to me to tell me that Disney World is
they are doing. the only place in the world her family can go on va-
cation because their son is paralyzed from the neck
down and must have all of his food pureed. She
Lee Cockerell takes a told me that no matter what restaurant they go to at
moment with his family to Disney that when they make this request, the chef
celebrate the new window
dedicated in his honor. comes out and discusses exactly their needs and
then takes care of it with no problem. She went on
PREVIOUS PAGE
Lee Cockerell poses with to tell me that other restaurants outside of Disney
Mickey Mouse after the do not appreciate such requests and make dining
unveiling of his “tribute”
window on Main Street out a real hassle. I have learned over the years
U.S.A.® in the Magic that everyone has a problem that you don’t know
Kingdom®. The window
reads: The Main Street about, which makes me kinder and helpful to all,
Diary: True Tails of Inspi- no matter what attitude they display. That is what
ration, Lee A. Cockerell,
Editor-in-Chief. we try to teach every single Disney Cast Member.

Loyalty Management™ | November 2009 61


sneak peek

ured
feat kers
hear from thought leaders pea
at top companies like … s
Brad Keown
Midwest Director of Sales of Facebook

Consumers are talking about your brand, do you want to be part of the conversation? Brad
Keown will be discussing ways that brands can leverage consumers social graph and become part of
the conversation. 250MM people are on Facebook and understanding how to leverage the platform
will help small, medium, and large businesses develop relationships with your customers and increase
your sales.

corporate social
responsibility:
doing good engages
employees & customers-
& drives the bottom line.

Athena Golianis Kim Marotta Barbara VanSomeren


Owner & Founder of AGW Idea Vice President - Corporate Social Vice President - Marketing,
Group, Inc. Responsibility of MillerCoors, llc Beltone Corporate

Bottom line: People - customers and employees - want to be associated with companies that are
good corporate citizens. However, simply engaging in cause marketing is not enough to
drive results. Companies need to distinguish themselves by putting a meaningful
stake in the ground that resonates with their consumers and their employees. Only
by making this connection will they create and implement strategic, integrated CSR programs that
build an overall positive company reputation, increase engagement and loyalty of key stakeholders
(customers, employees, shareholders, and others), and ultimately, drive the bottom line.
HERE’S WHAT WE KNOW ABOUT CSR’S IMPACT ON ENGAGEMENT:
•Giving back and “doing good” is good for business and, therefore, should become an expected business strategy.
•Externally-facing CSR programs drive consumer behavior.
•Because internally-facing CSR programs allow employees to be better corporate citizens, these initiatives create
loyalty and engagement, which leads to increased retention, performance, and productivity.

Golianis will explain some of the key challenges companies face as they embark on the
CSR journey and present strategies for overcoming them.

62 Loyalty Management™ | Loyalty360.org


sneak peek

engagement is a
science & an art
Ivan Frank
Chief Marketing Officer of ePrize

First, you have to know the four components of engagement and apply them. Each has a
discipline with rules, structure and analysis. But, working the science alone only gets
you so far.
The most important aspect of engagement is to apply gray matter and creativity as the final
ingredients. ePrize will show you how to marry the science and the art. Attendance at this
session may create inspiration and engagement. Join us at your own risk.

applying behavioral
economics
John Fleming, Ph.D
Principal & Chief Scientist — Customer Engagement
& Human Sigma for the Gallup Organization

The secret to driving higher levels of growth and profitability in today’s hyper-competitive
business environment hinges on leaders working with the human nature of their employees
and customers. Employees and customers must be viewed as people first, and employees and
customers second.
•Learn the basic
principles of an emerging
management discipline,
“By looking beyond the rational thoughts and feelings
behavioral economics of employees and customers, and going to the emotional,
•Hear case studies of business leaders can find the answer to why customers will
companies who applied
behavioral economics to
pay more to purchase a product from another company
their business model and and why employees will forego a large increase in salary
how they outperformed
their peers, in a one-year to stay at a job at which he excels.”
period.

Interested in hearing from our featured speakers?


Register NOW at engagementexpo.com – Spaces are limited.
Loyalty Management™ | November 2009 63
sneak peek

the role of social media


and its impact on customer
engagement
Connie Hill Dr. John Todor
President & Founder of TFC, Inc. Managing Partner of
The Whetstone Edge

Social Media represents a powerful vehicle for reaching customers, however, it faces some daunting customer
engagement challenges. The questions remain; how do marketers harness social media and what is social
media’s true role in customer engagement?
THE AUDIENCE WILL LEARN:
•The psycho-economic principles
that underlie customer indifference and a focus on the best trade-off
between price and convenience.
•The psycho-economic principlesthat get customers emotionally engaged in a manner that leads to
greater desire and demand for the outcomes the product or offering enables.
•How these principles can be used to increase customer engagement in social media initiatives.
•How to envision and implement a marketing automation system that can manage
large customer databases, yet
enable the individualization necessary for sustained, meaningful customer engagement.

contemporary engagement
measurement:
using engagement to measure
cross-media marketing
Robert Passikoff Jim Harris
Founder & President of Brand CEO of Office Media
Keys, Inc. Network

Consumer engagement with new and old media is evolving rapidly. “New” media technologies are becoming
more regarded and relied upon as media platforms - by marketers AND consumers. Measures currently
used to evaluate media touch points are not considering variables relevant to today’s consumer, and
therefore are not an accurate predictor of in-market behavior. While the value of media entities (and
combinations thereof) can be defined by their size of the audience or their demographics,
they cannot be uniquely differentiated unless we examine the levels of engagement they
engender. Brand Keys will present a real consumer-centric, engagement-based holistic measure for cross
media planning..

64 Loyalty Management™ | Loyalty360.org


sneak peek

gamification:
driving engagement & revenue
with game mechanics
Rajat Paharia
Founder & Chief Product Officer of Bunchball

Status, achievement, reward, competition, self-expression: Rajat Paharia,


describes how to address and leverage these fundamental human
needs and desires through the use of mechanics from game design and
behavioral economics. Learn how companies like Comcast, NBC, LiveOps,
Warner Brothers and USA Network are using these mechanics with their
employees and customers to increase engagement, content creation and
consumption, time on site, visit frequency, loyalty, brand affinity and
revenue.

ATTENDEES WILL LEARN:


•What game designers have know for years - how to incent and motivate
users through the use of mechanics like points, levels, leaderboards,
virtual goods, challenges, and real-time feedback.
•How “virtual” rewards are incredibly powerful (and cheap!)
•How to channel these mechanics to drive revenue through more page
views, innovative sponsorships that integrate brands in meaningful ways,
sales of virtual goods, and more.
•About behavioral economics: the biases
and shortcuts that human
beings have in their decision-making processes, that cause them
to make irrational, but predictable decisions.
•Concepts like loss aversion, the decoy effect, anchoring, commitment &
consistency, scarcity, reciprocity, social proof and more.
•How these mechanics work across demographics and geographies: men,
women, kids, adults, U.S. and overseas.

read more about these sessions and


other engagement expo speakers at
engagementexpo.com

Loyalty Management™ | November 2009 65


sneak peek

Time flies when you’re engaged! We are less than a month


out from the 2009 Engagement Expo. Participants, exhibitors
& sponsors: we want to make sure you are ready for the event.
REGISTRATION
If you haven’t registered, do so NOW! To ensure quality networking and interactive forum, this
conference has limited space; therefore we encourage you register early to ensure your place!
If you have registered, be sure to remind your colleagues, clients and peers. You don’t want
them to miss out.
Register online at engagmentexpo.com or by phone (contact Loyalty 360 at 513-545-5612.)

BOOK YOUR ROOM


Sheraton Chicago Hotel & Towers

301 East North Water Street, Chicago, IL 60611
sheratonchicago.com
The Sheraton Chicago Hotel & Towers welcomes you to the heart of the city. Overlooking the
Chicago River, the hotel puts you within walking distance of business, dining, entertainment
and nightlife.
Please visit engagementexpo.com to book your room.

QUESTIONS
DON’T WAIT UNTIL SHOWTIME - ASK NOW! We want you to feel prepared so that your
show experience is the most valuable and enjoyable. Please do not wait until the show to ask
your questions. The more prepared we are to help address any show-time concerns, the better
we can provide the best show experience for you! Call us - we are happy to help 513.545.5612
or email info@loyalty30.org.

we look forward to seeing you in chicago!

66 Loyalty Management™ | Loyalty360.org


We’re here for you
when you need a question
answered,
a partner found,
or a resource provided.

The mission of Loyalty 360™, the Loyalty Marketer’s Association, is to provide an


unbiased, market-driven, “voice of the customer” focused
clearinghouse and think tank for all loyalty, incentive/reward,
and engagement marketing needs, insights and responses.

Loyalty 360 brings you the best of the best in loyalty marketing
and supports your customer strategy needs. Some of the tools we offer include:

•a weekly e-newsletter “This Week in Loyalty”


•opportunity to view and post white papers, case studies, and research
•access to past Loyalty Expo presentations
•latest news and events happening in the marketplace
•“State of the Industry,” an interactive dialogue with seasoned industry leaders
•access to new community-driven forums on loyalty360.org

To learn more about Loyalty 360 or to join, please visit www.loyalty360.org


Loyalty Management™ | November 2009 67
PRSRT
Prsrt Std
STD
U.S.
U.S.POSTAGE
Postage
PAID
4120 Dumont
4120 DumontStSt CAROL STREAM,
STREAM, IL
IL
Cincinnati,OH
Cincinnati, OH45226
45226
PERMIT
Permit No.
No.475
475

NOVEMBER Sheraton Chicago Hotel & Towers


18 & 19, 2009 Chicago, IL • engagementexpo.com

The Engagement Expo will take a deeper look at the best practices of engagement and
experience management, focusing on brand, client and employee perspectives. We will
bring a strong list of speakers, sponsors, and exhibitors to address the various areas of
word-of-mouth, experiential marketing,
engagement such as
social media, interactive media & technologies, forums
& communities, as well as traditional media — and how to leverage these as
part of your marketing communication mix.

LOYALTY 360 ANNOUNCES TWO NEW SESSIONS FOR THE 2009 ENGAGEMENT EXPO
Lee Cockerell Jim Harris Robert Passikoff
former EVP, Disney Properties CEO, Office Media Network President, BrandKeys
KEYNOTE SPEAKER “Contemporary Engagement
“Creating Magic: 10 Common Measurement: Using Engagement
Sense Leadership Strategies to Measure Cross-Media
from a Life at Disney” Marketing”

PLEASE VISIT ENGAGEMENTEXPO.COM FOR SPEAKER INFORMATION & TO REGISTER


If you're interested in sponsoring at this conference, please contact Mark Johnson at markjohnson@loyalty360.org

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