Loyalty Management Sex Appeal Loyalty Based on Our Sex

powered by Loyalty 360

Volume 2 Number 2

Spring 2010

Loyalty Expo PreviewYour Exclusive Sneak Peek at this year’s conference!

Customer:What does she have to do with loyalty?

Sex Appeal: Loyalty based on our Sex

Yes, there is emotion in economics…

What is your Behavioral Economics IQ?

www.alterian.com

Request your complimentary “Little Book” of Integrated Marketing, Integrated Email Marketing, Web Engagement or Social Media Marketing – Visit www.alterian.com/littlebooks today.

Tel: 312 704 1700 | Web: www.alterian.com | Blog: www.engagingtimes.com | @engagingtimes

Link analytics toexecution

Make email a strategic channel

Make your website engaging for the individual

Listen to how your brand is perceived

We needto talk

Build loyalty with Alterian

Are you engaging with your

customers?

www.

SPRING 2010

DEPARTMENTS

LOYALTY FORUM FEATURES

What’s on Loyalty360.orgLetter from the EditorContributors

Loyalty Forum: Your Voice

Q & A: Ask the ExpertsBanks and retailers are facing a variety of oppor-tunities and challenges as they try to make loyalty marketing meaningful to the individual customer at the points of greatest value—the moment of pur-chase. What are you doing to overcome these chal-lenges? How are you using technology to engage with customers during the purchase process?

Behind the Brand/PeopleInterview with Stuart Kiefer, Division Manger of Loyalty Solutions, FirstData

Behind the Brand/PeopleInterview with Judy Christa-Cathey, Vice President of Global Brand Marketing, Hampton Hotels

BooksLoyalty Reads

What is Your Behavioral Economics IQ?John H. Fleming, Ph.D., Gallup Consulting

“Sex Sells” Men and Women Are Loyal to Different ThingsDr. Bob Deutsch, Brain Sells

Lessons from the Frontline: B-to-B Customer ServiceLynn Daniel, The Daniel Group

Establishing Key Metrics for Measuring the Value of Loyal Customers Laura Patterson, VisionEdge Marketing

Customer Satisfaction: Keeping Score is Only the First Step Karl Sharicz, SImplexGrinnell

All I Really Needed to Know About CRM I Learned in Couples Counseling Greg Nelson, agencyQ

68

10

12

14

16

18

20

22

26

28

32

34

38

WWW.LOYALTY360.ORGVOLUME 2 NUMBER 2

3Loyalty Management™ • SPRING 2010

This Month in

Lessons from the Frontline: B-to-B Customer Service

pg28

If a customer was not entirely satisfied, why not?Customer Satisfaction: Keeping Score is Only the First Step

pg34

Loyalty Management™ | November 2009 19

The last puzzle piece in Customer Relationship Management

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

Comarch Loyalty Management

in Customer Relationship Managementin Customer Relationship Managementin Customer Relationship Management

Loyalty | Business Intelligence | Customer Experience

@Social Media: How can Twitter help your marketing push?

sneak preview on page 59!

SPRING 2010

TECHNOLOGY, TRENDS & REWARDS

BEST BUSINESS PRACTICES

@Social Media: #Tweeting and #LoyaltyMichelle Marquardt

So Many Shiny Things, How Do I Choose?Erin Raese, Loyalty 360

Loyalty Innovation

The Five Things Marketers Should Be Doing Right Now (because of the new “CARD” act & the pending financial reform bill)Tom Koeppen, DataCo Solutions, LLC

What Does a Customer Have To Do with Loyalty? Shiv Gupta, Farmers Insurance

A Time for Change Carlos Dunlap, Kobie Marketing

Creating Loyalty Inside, Outside a Company: Five Strategies Dianne Durkin, The Loyalty Factor

Voice of the Customer: What Does That Mean for Loyalty and Engagement? Mark Johnson, Loyalty 360

Loyalty Program ProfileULTA Beauty

2010 Loyalty Expo Preview

40

42

44

46

48

50

54

56

58

59

WWW.LOYALTY360.ORGVOLUME 2 NUMBER 2


Loyalty ManagementEditorial & Production TeamErin Raese - Editor in ChiefMark Johnson - Contributing EditorElizabeth Heyer - Editorial DirectorKathleen Ninneman - Graphic DesignerGraphics Plus, Inc. - Print Production

Loyalty 360 TeamMark Johnson - President & CEOErin Raese - COOAmanda Chasteen - Manager, Marketing OperationsCharlie Deye - Director of SalesJessica Siegert - Sales & Account ManagerJulie Hellebusch - Controller

ContactsArticle Submissions: Erin Raese ([email protected])Advertising: Charlie Deye (513.226.0925)

To subscribe to Loyalty Management, visit loyalty360.org.

© 2010 Loyalty 360, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permis-sion is forbidden. The information contained herein has been obtained from sources be-lieved to be reliable. Loyalty 360 disclaims all warranties as to the accuracy, completeness or adequacy of such information. The opinions shared are those of the contributing uthors and not necessarily reflective of Loyalty 360 and/or its affiliates. Loyalty 360 shall have no liability for errors, omissions or inadequacies in the information contained herein or for in-terpretations thereof. The opinions expressed herein are subject to change without notice.

We Want Your Feedback

As a “voice of the customer” focused publication we want to hear from you–our customers. What would you like to see included in these pages? Share your thoughts on articles and ideas for content.

This is your platform. We would like to hear from you.

Write us at: [email protected]

This Month in

pg48

What does a customer have to do with loyalty?

pg40

LOYALTY 360 ON THE WEB

6 Loyalty Management™ • LOYALTY360.ORG

what’s on loyalty360.org

In May 2010, we will launch our new site which will be unmatched in the industry. Overhauled to include cutting edge technologies and an overall heightened user experience, the enhanced site will include:

•Easier navigation •Member tier and management with ability to control content access •Member download and upload capabilities •Member chat •Interactive job board •Podcasts

Look for our updates soon!

We are also pleased to announce that we are now using the Alterian email engine. Moving to this new email platform enables Loyalty 360 to build a truly customer-focused integrated communication strategy.

homepage

Loyalty 360 members told us they wanted more robust features

and functionality from our website…and we listened to you!

Be sure to check out the Loyalty 360 blog at www.loyalty360.org/blog. As a thought lead-er on customer and employee loyalty, leading media such as FoxBusinessNews and The New York Times have sought Loyalty 360 President and CEO Mark Johnson’s insights about some of today’s hottest loyalty issues. Tap into the blog to read his thoughts and to share your opinions on all the important news.

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.

LEARN MORE ABOUT LOYALTY 360 & JOIN TODAY AT WWW.LOYALTY360.ORG

We’re here for you

or a resource provided. a partner found,

when you need a question answered,

Loyalty 360 brings you the best of the best in loyalty marketing

and supports your customer strategy needs. Some of the tools we o!er include:

"a weekly e-newsletter “!is Week in Loyalty”"opportunity to view and post white papers, case studies, and research"access to past webinars and 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

FROM THE EDITOR


Customer Experience – the latest buzz word(s).Last year was the year of customer engagement; 2010 is shaping up to be the year of customer experience.Definitely not a new concept, our Loyalty Expo 2010 keynote speaker, Jeanne Bliss, has been helping organizations focus on the overall customer experience for over 15 years. Managing Partner of Customer Bliss and author of “I Love You More Than My Dog,” Bliss in her keynote will be taking attendees behind the scenes of the decision making that goes on inside some of today’s most beloved companies.

While on the surface the principles surrounding customer experience seem almost common sense, as Jeanne will point out, the practice tends to be challenging. With the day-to-day pressures for increased revenue and cost reduction, customer experience often becomes one of the first casualties.

Throughout this issue and at Loyalty Expo 2010, we’re going to explore what it takes to deliver 360° experiences that drive loyalty and engagement at each and every customer touchpoint.

A good place to start is John Fleming’s article (pg 22) about behavioral economics. I personally love this article because my brother, who holds an MBA in Economics, is a firm believer in the economic base assumption of rational decision making. I (the one with a dedicated closet for my shoes) argue that actual practice will prove the base assumption wrong because people make emotional decisions more often than rational decisions. Thank you John for the fodder to win this ongoing debate! For the rest of us, this is a lesson in communication.

Other articles in this issue explore the relationship between customers and employees (“All I Really Needed to Know About CRM I Learned in Couples Counseling,” pg 38 and “Creating Loyalty Inside, Outside a Company: Five Strategies,” pg 54) provide insights into how to look at these relationships from a true 360° perspective. Remember, customers and employees are multi-dimensional, so the ways in which companies build strong, interactive relationships with them must be as well.

We hope this issue gets you thinking about the importance of a positive customer experience. Come join us at Loyalty Expo 2010—where you’ll learn how easy and cost-effective it is to enhance your customer experience—results guaranteed! Session previews begin on page 59.

Erin RaeseEditor-in-ChiefLoyalty [email protected]

Welcome new Loyalty 360 Members:

The Daniel GroupInfoprint

Georgia Pacific Jakala

SpaFinderTata Consultancy Services

True ValueVisa

We want your feedback. Please share your thoughts about this issue and the show sessions with me ([email protected]). The first 10 marketers to share their thoughts and insights will be given a complimentary pass to the Loyalty Expo.

www.young-america.com

1.800.533.4529

CONTRIBUTORS

Dr. Bob Deutsch Dr. Bob Deutsch, founder and president of Brain Sells (www.Brain-Sells.com), Boston, MA, has worked in the primeval forest and on Pennsylvania and Madison Avenues, studying how people form attachments to products, persons and performances.

Lynn DanielLynn Daniel has earned the role of expert in B2B customer service and loyalty. His background includes management consulting, corporate planning and new product management, and sales management. He started The Daniel Group as a consulting firm focused primarily on manufacturers and companies who operate in the B2B space.

Dianne DurkinDianne Durkin is the president and founder of The Loyalty Factor, a training and consulting firm that educates executives, managers and lower-level employees in ways to build customer and brand loyalty.

John FlemingFleming is Chief Scientist for Gallup’s Customer Engagement and Human Sigma practices, which set worldwide standards for Gallup’s brand measurement and customer engagement management applications. Fleming also leads Gallup’s Business Impact Analysis Consulting Group and serves as a consultant on issues related to research design, analysis, and complex modeling.

Shiv GuptaAs Director – Customer Insights with Farmers Insurance, Shiv Gupta leads the development of analytically driven customer strategies. One of his major responsibilities is leading efforts to identify high lifetime value customers and develop analytically supported strategies to acquire and retain them.

Mark JohnsonMark is the President and CEO of Loyalty 360. He has significant experience in selling, designing and administering prepaid, loyalty/CRM programs, as well as data-driven marketing communication programs.

Tom Koeppen Tom Koeppen has over 20 years of success increasing the effectiveness and profitability of marketing strategies and customer relationship programs. Tom is Sr. Vice President of Sales and Marketing Strategy with DataCo Solutions LLC, a marketing analytics consulting group.

Michelle MarquardtMichelle Marquardt is an interactive marketing consultant with a focus on social media, online and offline marketing channels and in integrating web contact with traditional marketing channels.

Greg NelsonGreg Nelson is head of the customer engagement and loyalty practice at agencyQ, a full-service digital marketing agency based in Washington, DC. Greg offers his vast experience in conceptualizing and implementing ROI driven integrated marketing programs for Q’s clients.

If you would like to contribute to a future issue of Loyalty Management please contact Erin Raese at (630) 235.8251 or [email protected].

Laura PattersonLaura Patterson is president and co-founder of VisionEdge Marketing, Inc, a leading data-driven metrics-based strategic and product marketing firm.

Karl ShariczKarl Sharicz is Manager of Customer Intelligence at SimplexGrinnell. For more information about the company’s products and services, visit www.simplexgrinnell.com.

LOYALTY FORUM: YOUR VOICE


We’ve received several inquiries about using Social Media in corporate communication programs to build an employee social network. What kind and how much information should be collected from employees and shared with others? What best practices are there? What, if any, were your employees’ reaction to using Social Media?

e recently shelved (once again) the concept of our own internal social networking solution. Based

on IBM technology, the platform would have done what we needed it to do, and over-delivered in terms of collaboration capabilities, but there was no impetus for our people to proactively use the system. The main reaction was to question why people would use an internal system when they are already active on external sites. We are now developing training, recommendations and guidelines for how best to use external networks. Very much a case of “if you can’t beat them, join them.”

Michael Bolan LinkedIn

Wocial media is the most powerful tool currently available in increasing company or product awareness.

This can be done in a direct way or an indirect way by means of employee networks. Depending on the type and size of company, there is a good chance one already exists. If a company wants to use this is as a medium for communicating directly to their colleagues, I would edge on the side of caution. Personally I would not use it in a directive format, i.e. to tell staff what to do. However, to use it as a company magazine—what’s coming, what’s happening, social events to take part in—is something I think every company should do.

The first thing to remember is that social media reflects the ideas, interests and socializing needs of the people. It could be used as an unparalleled tool to pull a company workforce together and a unified direction within a team. The opposite could also apply if mismanaged.

As to what information should be collected on this type of medium—it’s a bit tricky. I think any perceived type of control or manipulation by the employee would be met with destructive consequences. It must not and can not feel like work.

Alastair Dodds LinkedIn

S

Social media could be used as an unparalleled tool to pull a company workforce together and a unified direction within a team. The opposite could also apply if mismanaged.—Alastair Dodds

Loyalty Management™ • LOYALTY360.ORG

here’s a growing number of people at DraftFCB using Yammer for internal SM networking. The user base has

grown to 500+ since it started 6-8 months ago. The info is fairly light- hearted—sometimes there is an occasional debate, but no longer than 4 rounds. The best content is the shared URLs, white papers, requests from offices in the network on best practices, etc., but the structure of Yammer prevents things like polling and surveying and the ability to mine the content for off-line evaluation.

The platform has built its own content expectations that limits it to business and consumer insights, but there is the periodic “be careful what you post” reminder from corporate communications (with a link to the IPG policy on posting). A big company has to watch over this kind of thing and rather than shutting it off from our work sta-tions, they are active participants in the environment.

Daniel Crane DraftFCB

Policy Tool For Social Media Have more questions? Need a little more direction?

PolicyTool is a policy generator that simplifies the process of creating guidelines that respect the rights of your employees while protecting your brand online.

You’ll be guided through 12 questions that should assist you in developing policies and guidelines for Social Networks in your organization.

PolicyTool has been developed by rtraction in collaboration with Harrison Pensa lawyer David R. Canton, one of Canada’s leading authorities in internet and technology related legal issues.

Go to http://socialmedia.policytool.net/ to learn more and get started today.

T

ocial networks should take into account the informal nature of most exchanges in such mediums, realizing

that even the formality of email is often lost and accepting that tonality will be different there. This can be a positive transformation at times, encouraging open and candid exchanges that truly build out understanding and ideas.

Social networks, for the most part, are self-regulating, but also need a set of broad guidelines to usher in new members and set the foundation for positive interaction; this means that once you set your foundation for interaction, if you allow for open and honest interaction, you will see the community self-regulate members who get out of line or stray off topic in inappropriate manners.

The foundation/guidelines for the best social networks are broad in scope, but deep in meaning, they allow the social aspect of the network to shine. For example, banning profanity or attacking others personally seems intuitive, but give clear lines to members who may become heated in the course of a discussion or exchange.

Other guidelines that shape the way content is exchanged can help keep everyone aligned with a common purpose; organization is essential to effective group discussions and interactions. Systems which allow for collaboration with documents, as well as interactions, and private side-exchanges most aptly mirror face-to-face interactions and are therefore the most powerful.

It is also important to have some type of suggestion regarding timing expectations and cross-medium

communication; what I mean here is that colleagues can get easily frustrated if expectations are incongruent or become frustrated if they are in meetings all morning and return to find a topic was introduced, discussed, and decided upon before they had a chance to chime in. Asking that discussion forums leave topics open for 24-48 hours at a minimum and gently reminding folks that if they post a comment, following it up with copies via email and phone is not only redundant, but counterproductive. Think about the last time someone emailed you a question, then called to ask if you got the email as it was arriving in your inbox; rules help control this tendency of folks who are emotionally involved in issues to over-communicate or to duplicate communication streams across media.

With regard to how much information should be collected and shared, in my opinion, there should be a basic level of information (enough to put comments/contributions into context), but not so much that I feel the need to send birthday cards to my colleagues children because I get reminder notices in the network. Social networks are, by nature, open communication forums and employees should treat their contributions as such. Collecting a general profile on employees which allow others in the organization to understand the department, perspective, and qualifications of other contributors assists in ‘lubing’ the communication streams enough that exchanges are more meaningful.

Connie Chesner Right Brain Discovery

S

The foundation/guidelines for the best social networks are broad in scope, but deep in meaning, they allow the social aspect of the network to shine.

—Connie Chesner


Ask the Experts

Q&ABanks and retailers are facing a variety of opportunities and challenges as they try to make loyalty marketing meaningful to the individual customer at the point of greatest value—the moment of purchase. What are you doing to overcome these challenges? How are you using technology to engage with customers during the purchase process?

Q:

Through our experience with physical bank, retail and loyalty marketing vendors, we un-

derstand that the bottom line is to increase two vari-ables: consumer frequency and spend. To increase loyalty at the point of purchase, why not let the con-sumer know that they can text in for an instant cou-pon on their mobile phone and opt-in for additional incentives/discounts in the future? The consumer gets instant gratification at the POS with an option of long-term gratification via opting in through the loyalty program.

Once the consumer opts-in for long-term incen-tives, and from a loyalty marketing execution per-spective, we can incent them accordingly:

If customer “W” has not visited us in “X” time, they get a text message with a coupon to redeem by

“Y” time for “Z”% off. -Or-If customer “A” has not spent “$B” with us in “C”

time, they get a text message with a coupon to come in by “D” time for “E%” off an order of “$F”.

In addition to offering this opt-in (clear call-to-action) at the point of purchase or sale, why not of-fer this in the application process by collecting their mobile phone number?

It is apparent to us all that two things all consum-ers love is their loyalty points/discounts and their mobile phone. Now is the time to integrate them!

Trans World Entertainment parent company of f.y.e, for your

entertainment stores, was able to con-vert our CRM initiative into a MULTI-MILLION dollar profit center for our 550 stores.

TWE accomplished this shift by structuring a fee-based lifestyle mem-bership offer at point of sale that rewards customers for their in-store spend and extends their brand reach beyond the confines of their four walls by providing discounts and value on their custom-ers every day activities, such as dining, entertainment, travel, shopping and car care.

All of the trends for Retail show that in this post-recession economy, custom-ers have emerged with new perspectives and expectations for their interaction with retailers and for finding and part-ing with any discretionary income. With consumer confidence on the rise, we are finding that we are well-positioned to ex-tend our brand far beyond the four walls of our brick and mortar stores and ad-dress the four critical components that


LOYALTY FORUM: Q&A

—Tim DoelgerMobile Marketing Consultant, NYC Pay Media

post-recession shoppers are seeking: savings, clarity, control, and escapism.

A staggering 80% of consumers in a recent CNN poll indicated that they are looking to simplify their lives and clear out the clutter. Plus, 90% polled expressed their passion for being more frugal in the future. With the pending changes in our industry to dramati-cally lower the price point for CD’s we are poised for growth in our sales num-bers as this brings back our more frugal customers who in the past have been driven to our competitors either online or in-store due to price. With a win on the price front for our stores, we look to Backstage Pass VIP to reach our goals of extending our brand and creating real, meaningful savings for our customers in all areas of their life.

I encourage each of you to take a dif-ferent perspective when watching TV and see what retailers are selling – the message behind their approach. You will find that retailers are aggressively linking savings with emotional engagement to their brand.

A: A:

—Barry BurmasterDirector of Marketing, Visual Merchandising & CRM, fye.com, a division of Trans World Entertainment


The World’s Leading Card Manufacturer

I have experience in both banks and retailers with a new approach to mar-

keting that goes beyond these traditional ap-proaches. With all due respect, as an industry we’ve focused on using new technologies to continue old strategic “product-centric” ap-proaches. We talk about being “customer-centric” by using loyalty cards and behavior tracking to “fine tune” the product-centric ap-proaches we put in front of consumers.

A new approach that is truly “customer-centric”:

•focuses on providing customers more choice than just “accept/reject” to offers and incentives

•seeks to grow share of wallet and not just share of market or response, and

•seeks to provide solutions to needs in-stead of multi-product cross-sell or up-sell

This approach does not require new technolo-gies, just different thinking about how to apply technologies.

Through testing this approach in both re-tailers and banks, we’ve learned how to not only get significant increases in total share of wallet, we learned that we’re actually engaging customers regularly before the POS. Custom-ers are coming to us to plan their purchases before they choose the POS they want to go to. So if the POS is “Moment of Truth 1.0”, we’re looking at “Moment of Truth 0.5”.

When you change the focus of your mar-keting to providing real value for high share of wallet relationships across all the products and services you offer, you teach consumers that the way to optimize the value they received for their business is by bringing all their business to you on a regular basis, instead of by cherry picking the best individual product offers from you and your competitors. And that is what the traditional approaches of “product-based” transaction marketing, fueled by coupons, has taught consumers. L

A:

—Bob VineyFranchise Owner & Business Coach, Action COACH Business Coaching

A new approach that is truly “customer-centric” focuses on providing customers more choice, seeks to grow share of wallet, and seeks to provide solutions to needs.

Divison Manager of Loyalty SolutionsFirst Data

What is your customer loyalty philosophy? It begins and ends with the consumer. Once you

have a true understanding of what is important to your consumer, you can design and implement a meaningful program. That program must be easy to understand, relevant, and easily refreshed to keep a consumer engaged. Missing a step with any of these components is likely to result in an unsuccessful program. Ultimately, a successful loyalty program will be tied directly to the brand and will be leveraged across the business.

What is your personal motto? Hard work beats talent when talent doesn’t work

hard. I know, it sounds a little hokey, but it plays well in youth sports and I believe it translates into the business world as well.

If you were not doing what you do today, how would you be spending your time?

Hitting towering fly balls to the Colorado Bears—the best bunch of 12 year-old kids a coach could ask for. Coaching the Bears is something I do in my free time and we’re preparing for a national tournament in Cooperstown, New York this summer. In my next life, I’d either like to coach high school baseball, or be the CEO of Loyalty 360. ;-)

Which talent would you most like to have? Wow. That’s a tough question, mainly because I would say my answer has changed over the years. Twenty

years ago I would have said a 12-6 curveball and a nasty slider. Since there is not a huge market for left-handed pitchers in their 40s, I’d have to say I’d like to be a “scratch” golfer. Now, if you had asked what super power I would like to have…

Stuart Kiefer

16

LOYALTY FORUM: BEHIND THE BRAND/PEOPLE


Stuart Kiefer is responsible for the strategic focus, new product development and innovation for Loyalty and Personalized Marketing at First Data. Kiefer has more than ten years of experience in creating, launching and managing loyalty-marketing programs.

Prior to his current role, Stuart managed large direct/database marketing relationships on behalf of First Data’s Donnelley Marketing Group. These efforts focused on the acquisition, retention and profitability of various credit card portfolios as well as the cross-sell efforts of partnering financial institutions.

Stuart coaching the Colorado Bears


What are the qualities you most admire in a person?

Courage, integrity, and a good sense of humor. The courage to try new things, integrity to follow through with a consistent set of values and principles, and the ability to laugh with people and at yourself from time to time.

If you could invite four people to dinner (past or present) who would they be?

This is a great question and one that comes up frequently in dinner conversations. The easy answers always seem to be Abraham Lincoln, Ghandi, Ronald Reagan, Warren Buffett or Bill Gates. Those are all great answers, but I’m going to go off the reservation a bit and start with Jimmy Buffett. I’m a big fan of Jimmy’s music and books. I’ve always said if I ever hit the lottery, I would buy a boat and sail around the Keys until I caught up with him.

Next, I would invite Brett Favre. First, I am a lifelong Minnesota Viking fan. I’ve suffered through four Super Bowl losses and a couple of NFC Championship game losses in my life. I think the Vikings best shot at getting to the big show next year is to get Brett to come back for one more season. I just want to do my part to help him see the light.

My third guest is probably the biggest Brett Favre fan I have ever met—Logan Andrew Bauman, it would be the greatest dinner ever. Logan was the best friend of my oldest son Tyler. He was like a fourth son to Mindy and me. Logan was tragically killed by an automobile just before Christmas 2008, forever changing our lives. Logan was a bright, funny, athletic young man with a very bright future. We miss him dearly.

Finally, if I’m inviting Logan and Brett, I have to invite Tyler Kiefer, my fifteen year old son. Like any parent, I would do anything for my boys and if I could give Tyler one more day with Logan, it would be the greatest evening of my life.

Which book(s) are you currently recommending?

Extreme Measures by Vince Flynn. Stuart Coleman is my kind of hero.

What can we expect from First Data for the rest of 2010 and beyond?

First Data will continue its transformation from a payments processor to a technology company. We are committed to ongoing investment, both domestically and internationally, in cutting edge technology solutions in loyalty, direct marketing, prepaid, mobile, and ecommerce as well as our traditional issuing and merchant lines of business.

What’s your advice for a novice loyalty marketer?

Think like a consumer. Look at several programs in the market today and make a list of what you like and what you dislike about each. Take the list of “likes” and evaluate how they could apply to your business. I recommend establishing a team of employees who represent the various disciplines within your company: marketing, I.T., finance and operations. Your success in contingent upon cooperation and integration with all areas, but remember it’s a marketing program.

Hard work beats talent when talent doesn’t work hard.

Think like a consumer. Take the list of “likes” and evaluate how they could apply to your business. Establish a team of employees who represent the various disciplines within your company.

L

Stuart and his three sons Tyler, Ben, and Charlie

Vice President Global Brand MarketingHampton Hotels

Many of us talk about building our cultures around the customer experience, however many of us tend to have a difficult time effectively executing, often due to time or finance constraints. How are you able to keep customer experience a priority?

Customer experience is a priority because our vision at Hamp-ton Hotels is to set the standard for competitors to follow. Con-stantly listening to our customers is how we innovate and evolve in order to stay relevant to today and tomorrow’s customers. This commitment to be a customer-centric brand is full circle at Hamp-ton from hotel product innovation and team member training to marketing and public relations messaging. At Hampton we believe that it is our ability to connect and drive guest loyalty at the hotel level that helps us build our circle of friends. We call our culture

“hamptonality,” one unstoppable brand with irresistible personality. We celebrate team members who connect with guests. We always keep customer experience a priority by leveraging guest insights for the future while providing a consistent experience today and unify-ing our brand voice internally and externally.

Share how a focus on customer experience has built loyalty to your brand?

Four years prior to celebrating Hampton’s 20th anniversary, we conducted a deep dive into what our most loyal and potential guests preferred in a mid-scale hotel brand. These travelers helped prioritize where Hampton needed to evolve and innovate to con-tinue to be a leader. Hampton guest loyalty and award recognition from business travel publications soared after our multi-year hotel product innovation launched, which included providing a hot free breakfast instead of the traditional continental offering and intro-ducing a new bed experience where the linens and duvets were laundered fresh for every guest. Just as important as our product innovations, our brand culture also evolved to align with guests, as did our customer messaging. Always listening is our philosophy, how we listen to guest allows us to innovate for the future.

Hampton Hotels has been recognized for being, one of the top hotel franchises in the nation and a part of Hilton Worldwide. A big hotel chain with very high standards. No matter which of our 1,800 hotels you check into, here’s what you can count on: friendly service, clean rooms, Clean and Fresh Hampton bed washed fresh for every guest, delicious free hot breakfast, free internet access and hotels that are in touch with the needs of today’s travelers. Every time. Guaranteed.

Loyalty Management takes a closer look at the woman behind the brand – Judy Christa-Cathey, Vice President, Global Brand Marketing, Hampton Hotels.

18

LOYALTY FORUM: BEHIND THE BRAND/PEOPLE


Judy Christa- Cathey

When you look back, what was your favorite ‘job’ experience and why?

My favorite job was actually my most unique op-portunity, wearing a leprechaun outfit and flying with the Chairman of the Board of Southwest Airlines, Herb Kelleher, while we served passengers Irish coffee on St. Patrick’s Day. Southwest Airlines has always believed in spirit of their team and the maintaining the person-ality of the airline. Herb Kelleher lead by example. He was willing to put on a green plaid suit and serve Irish coffee to customers for a fun-filled, three-flight-jaunt across Texas or even check bags for customers over a Thanksgiving holiday. This type of passion is a spark that carries any organization and should be celebrated.

Who has had the most influence in your life?

I’ve had a number of influencers in my life, starting with mom and dad. They have always believed that if I could dream it, I could achieve it. Add to that the love of my husband and his cheerful belief that my philoso-phy on life is “if it’s worth doing, it’s worth over-doing.” Top it off with an awesome daughter who inspires me and I have an incredible and loving network of support.

What inspires you?Strategic ideation, especially when you drop all

rules and boundaries of “reality.” Innovation comes when you allow yourself and your brand to dream and expand. Once you dream, you can establish a frame-work to ensure relevance, return on investment and roll out. You can predict the future by creating it if you leverage strategic ideation. But first you must dream!

Which talent would you most like to have?I would love to be an author. A unique blend of

John Grisham meets Dean Koontz with a little adven-ture and romance blended in. Why not create a whole new literature category! Who knows, my daughter heads off to college next year so perhaps I’ll take the time and discipline to take a stab at it!

What are the qualities you most admire in a per-son?

I admire people that are passionate about what they do and, therefore, do it to their utmost ability. Passionate people maximize projects and are willing to collaborate and partner to make their work better. Passionate people keep their commitments and want the best outcome whether it is their idea or somebody else’s. I think you can trust people who operate based on passion for what they do.

Which book(s) are you currently recommending?

“What Would Google Do” by Jeff Jarvis is a great read. It makes you step back and look at your company and your

brand in a new way. One of my favorites is “Crucial conver-sations tools for talking when stakes are high” by Patterson, Grenny, McMillan and Switzler. This book has been a great resource for me in managing business relationships.

What can we expect from Hampton in the future?Expect Hampton to be your friend in town providing lo-

cal advice and supporting you in your travels and you can expect Hampton to continue our innovations in service and product based on your values.

What’s your advice for a novice loyalty marketer?Play to your strengths. To do this, you need to under-

stand yourself. I highly recommend reading “Now, discover your strengths” by Marcus Buckingham. Take the online as-sessment and understand your strengths…and play to them! L

Innovation comes when you allow yourself and your brand to dream and expand. Once you dream, establish a framework to ensure relevance, return on investment and roll out. You can predict the future by creating it if you leverage strategic ideation.


Judy participating in Hampton’s Save-A-Landmark program

20

Loyalty Reads10 TRUTHS ABOUT LEADERSHIP…It’s Not Just About Winningby Pete LuongoAugust 2007 | Clerisy Press

In a world where greed and winning at all costs has permeated organizations from youth sports to Fortune Top 50 companies and everything in between, everyone is faced with the same challenge: How do we not fall into the trap of compromising our core values as we chase the end game? Can we create an environment where winning (success however you measure it) and employees feeling valued, respected, and part of something special are mutually inclusive? The answer is a yes!

Prior to the publication of 10 Truths About Leadership…It’s Not Just About Winning and his full time speaking career, Pete was President/CEO of the Berry Company, a 1.5 billion dollar yellow page advertising agency. Since retirement Pete has devoted himself to giving back through his book, speaking engagements, board membership, and by serving as executive director of the Center for Leadership and Executive Development at the University of Dayton where he also serves as an adjunct professor teaching leadership at both the undergraduate and graduate levels.

Pete has been fortunate to work with 100+ companies, collegiate athletic programs and numerous other organizations sharing his behavior driven model “The Leadership Pledge”, developed while he was at Berry, that focuses on people, support, expectations, feedback, and accountability. The ten truths are life’s lessons that help each of us understand that our lives will be valued by our willingness to make a difference in other people’s lives. Coaching and inspiring leadership at all organizational levels is Pete’s passion: his message will move and inspire you.

LOYALTY FORUM: BOOKS


THE INSPIRATION FACTOR: How You Can Revitalize Your Company Culture in 12 Weeks by Terry Barber March 2010 | Greenleaf Book Group Press

When all is said and done, everybody wants to know they have made a difference in someone’s life. Regardless of your personality type, background or age, you can choose to create an inspirational transaction and positively impact people around you, or as chief inspirational officer Terry Barber calls it, your “Inspiration Factor.”

And when the “Inspiration Factor” goes up, according to Barber, so does loyalty that can be applied to all facets of life—family, employees, team members, customers, donors, and friends.

Barber reveals the seven principles of inspiration and how implementing even one of them can positively impact someone’s life. Implement all seven and you will change the very culture in which you live and work. When the principles are applied at home, families become safe and fun environments. When applied at work, team members become more loyal as do customers, clients, and donors.

Throughout The Inspiration Factor, Barber uses insights, humor, and gripping stories to impart the seven proven principles and will help you—as an individual and as part of an organization—to:

•Be the most valuable team leader in your company •Grow your sphere of influence •Manage up •Get ahead by inspiring those around you •Revitalize your company culture after a very difficult economic down time

“Pete Luongo didn’t decide to sit down and write a book on leadership, he was called to do so. See, there are those times in one’s life where the ability to “not” do something is no longer an alternative. Pete and his witty, charismatic and “loving” personality are mere byproducts of a set of experiences he has noted, been moved by and found enormous success.”

—Curt W. Coffman, co-author of the New York Times bestselling First, Break all the Rules


THE B2B EXECUTIVE PLAYBOOK: How Winning B2B Companies Achieve Sustainable, Predictable, and Profitable Growth by Sean GeehanApril 2010 | Clerisy Press

Find out how the fate of your B2B Company rests in the hands of relatively few people, and what you need to do about it.The world for executives in Business to Business (B2B) companies is critically different from the world of their

Business to Consumer (B2C) counterparts. All too often B2C strategies and tactics are applied to B2B companies, which leads to disappointing, even disastrous results. B2B requires a completely different playbook.

“When I became CEO, status quo was not an option. I’ve witnessed the impact Geehan’s approach has made with many firms. Applying these transforming and results-driven principles was a top priority for me.”

—Joe Morgan, CEO, Standard Register

This book is an absolute necessity if:

In this groundbreaking book, Sean Geehan draws upon over 20 years of experience to outline the proven characteristics of successful B2B companies and the strategies they must adopt in order to survive and thrive. He and his team highlight case studies and research from market-leading compa-nies such as Harris Broadcasting, Crown Partners, Nuance, Henny Penny, Salesforce.com, Springer Publishing, AmerisourceBergen, Kodak, Intes-ource, Oracle, and more to prove what practices succeed and why others fail.

•Your top customers account for a large amount of your revenue•Your strategic planning meetings are unproductive or frustrating•Your company’s margins are being threatened or eroding•You have lost or are at risk of losing top customers•You have had new products fall short of revenue, margin and/or market share goals

•Relationships with real decision makers of your most important customers are questionable

•You struggle to measure the ROI on marketing or R&D programs•Your re-branding efforts have fallen flat•Your senior team disagrees on how to move the company forward•Your organization gets activity confused with results

SELLING TO THE C-SUITE: What Every Executive Wants You to Know About Successfully Selling to the Topby Nicholas A.C. ReadAugust 2009 | McGraw-Hill

It’s the number one goal of every salesperson: getting access to senior client executives—the C-Level decision makers responsible for approving top-dollar deals. But getting there may be harder than you think…Did you know?

•Today’ sale processes have a 97 percent failure rate

•2 of the top 3 reasons a salesperson wins or loses sales is because of relationship and reputation

•When a salesperson ‘cold calls’ an executive they have a 4 percent chance of actually meeting them

•When a salesperson establishes a relationship with an executive’s subordinate and are introduced through them, their chances of actually scoring a meeting with the executive jumps to 84 percent.

Bottom line: to make it to the top, you have to know what are most likely behind your customer’s thought process when it comes to making investments with suppliers.

Former executive director of Ernst and Young’s revenue growth and risk management practice and senior partner advisor at KPMG, Read, a recipient of the International Business Award for Best Sales Trainer, has sold in every conceivable forum—from the bazaars of Cairo to the kara-oke boats of Tokyo; from the lounge rooms of Melbourne to the boardrooms of Manhattan…all with unbelievable success.

In an informative and eye-opening interview, Read can reveal what every executive wants you to know about selling to the top including:

•The 8 drivers of executive decision making and how each one dictates the sales process

•How to make sure you are not giving the right message to the wrong audience

•The top secrets for persuading key decision mak-ers

•How to gain access to senior client executives responsible for approving top-dollar deals

•The steps to go from simple salesperson to top trusted advisor

“Applied behavioral economics is the mathematical description of the role human nature plays in just about…everything.” -Jim Clifton, CEO, Gallup Consulting

riving higher levels of growth and profitability in the new normal of today’s business environment re-

quires organizations to master a new discipline: the applica-tion of principles of behavioral economics. Behavioral eco-nomics complements traditional economic theory by filling in the gaps left by the realities of human nature. This per-spective can help business leaders understand the economic behavior of real people and serve as a platform for effective management solutions. It can provide executives with in-sights they otherwise would not have gained—and solutions they might never have considered.

What is Behavioral Economics?For the past 30 years, behavioral economics—led by

such notable scientists as Daniel Kahneman, Robert Shiller, Richard Thaler, Angus Deaton, George Loewenstein, and others—has documented flaws in classical economic theory by challenging its foundational premise—that individuals always behave rationally to achieve the best possible out-come. Instead, behavioral economics emphasizes the role of psychology and the interplay among rational, perceptual, and emotional processes in decision making and economic behavior. In fact, some suggest that economic decision mak-ing is 70% emotional and 30% rational.

Throughout much of its history, classical economics has embraced the view that Homo economicus, or “economic man,” makes decisions based on a cool and rational evalu-ation of the potential costs and benefits. The right decision is the one that maximizes an individual’s economic gain and minimizes his or her costs. But there are anomalies we must take into account—situations in which real people’s behavior simply does not conform to the predictions of classical eco-nomics. For example, people often use simple rules of thumb or shortcuts called heuristics to make decisions which can lead them to overestimate the likelihood of an event based on how typical, how easy to recall, or how vivid the event is.

What is Your Behavioral Economics IQ?by John H. Fleming, Ph.D., Gallup Consulting

D


FEATURES

Other anomalies include the endowment effect, whereby people place greater value on objects they own compared with objects they do not own. That is, people tend to demand a higher price to part with an object they already own than they would be willing to pay for it to begin with. Another is the tendency for decision makers to be loss averse. People feel more pain from losing than pleasure from achieving gains of equal size. For example, individuals tend to be re-luctant to accept the prospect of a 50-50 chance of winning or losing money unless the amount to be won is at least twice the amount to potentially be lost.

In the board room and at the leadership level, principles of behavioral economics play out in many decision-making situations, with substantial implications for organization-al performance. From the biasing effects of sunk costs, to the tendency to be swayed by how a decision is positioned or framed, to the tendency to be resistant to changing the status quo, executive decisions are vulnerable to the ill ef-fects of cognitive and perceptual biases and heuristics. For-tunately, many of these effects can be overcome—or at least reduced—with training, awareness, and discipline. But be-fore they can be overcome, executives must be made aware of them and the situations in which they are likely to arise—they need to increase their BE IQ.

Dozens of heuristics and biases have been documented in behavioral economics literature—far too many to describe here. But the upshot is that our emotional, cognitive, and perceptual processes limit how rationally we view the world around us and use the information we receive from it. These limits have a profound effect on the decisions we make—and on the way organizations need to think about how their em-ployees and customers make decisions and behave.

Applying Behavioral Economics and Evolving our Institutions of Data

At Gallup, our goal is to take the discoveries of behavior-al economics and apply them to management and business problems. We develop tools and methods to measure and manage both the rational and irrational elements of human nature to drive business success. For Gallup, applied behav-ioral economics is the mathematical description of the role human nature plays in just about…everything. This defini-tion spans the spectrum of issues from how customers and employees create real growth for organizations to how citi-zens and institutions build stable and viable societies.

Until recently, principles of neoclassical economics have guided capitalism. This discipline and its associated institu-tion of financial data—stock price, earnings per share, profit, and growth—is what business leaders are trained upon to steer their organizations, divisions, and departments. In general, this model has served global business leaders quite well. But recent developments in the global economy and the financial markets since the beginning of 2008 underscore its limitations. It is becoming clear that without the insights from fields such as networks and complex interactions, psy-chology, and econometrics—neoclassical economics may lead us down the wrong path. Classical economic indicators provide trailing indicators of performance—by the time a sale is made and the profit appears on the income statement, it is too late to do anything about it. In addition, any incre-mental benefits of accounting or other financial efficien-cies have largely already been realized. Further substantial gains in performance based on attention to neoclassical economic metrics are relatively unlikely, and additional en-hancements offer little in the way of competitive advantage

Some suggest that economic decision making is 70% emotional and 30% rational.

Loyalty Management™ • LOYALTY360.ORG 23Loyalty Management™ • SPRING 2010

continued on next page »

for most firms.The next institution of data to emerge was tied to process

improvement and quality management—Six Sigma, lean manufacturing, and Total Quality Management, for exam-ple. This institution of data worked well to improve output quality and wring inefficiencies and costs out of business processes, making organizations more efficient, effective, productive, and profitable. But like financial metrics, much of the benefit of focusing on process and quality metrics has been realized and big gains are harder to find. While quality is necessary—and declining quality is likely to be a leading indicator of future declines in performance—improvements in quality are unlikely to provide significant competitive advantage for most companies. For many organizations, in-cremental improvements in operational efficiency may con-tinue to provide some cost-reduction benefits, but they will yield little in the way of additional competitive advantage.

We believe that the next big institution of data will be found in developing leadership initiatives and metrics based on principles of behavioral economics because the gains to be found are much larger than in other areas and the po-tential is largely untapped. Mastery of applied behavioral economics holds the promise of realizing breakthrough im-provements in employee productivity and customer reten-tion—and real growth and profitability.

Our work with organizations around the globe has taught us that every company has an enormous—but largely untapped—potential for breakthrough improvements in em-ployee productivity, customer retention, and real growth and profitability by understanding and leveraging how hu-man nature drives business performance. This unrealized

potential represents an internal economy with its own set of rules and dynamics—an emotional economy—that can be measured and managed to improve business performance. Most important, the emotional economy drives the neoclas-sical economy.

What Is Your Behavioral Economics IQ? The rise of applied behavioral economics as a manage-

ment platform is of paramount importance to business lead-ers because it compels us to rethink the traditional rational/functional models of human decision making that guide many business decisions. But before organizations can har-ness the power of applied behavioral economics, they must increase their BE IQ by gaining an understanding how the emotional economy works in their organization and in the larger marketplace. Next, they must align their business processes and key performance metrics to take full advan-tage of the insights afforded by a behavioral economics per-spective. Finally, they must deploy these insights effectively to manage and optimize their employee and customer rela-tionships.

From a behavioral economics perspective, high perfor-mance organizations recognize the need to understand and accept human nature and capitalize on it to select and posi-tion employees, manage, motivate, and engage them, accel-erate their development, and unleash innovation and pro-ductivity, all to ultimately engage the emotions of their most valuable asset—their customers. Increasing your company’s BE IQ is the next vital management discipline and the key to superior performance and long-term growth.

Every company has an enormous—but largely untapped potential for breakthrough improvements in employee productivity, customer retention, and real growth and profitability by understanding and leveraging how human nature drives business performance.


What is Your BE IQ? (continued)

L

Loyalty Management™ | November 2009 9

n my work as a cognitive anthropologist I study how the mind works, how people “make meaning,” how people

form attachments and loyalties to things, how people make decisions. Decisions like how to select what to invest in, whether products or mates; why and under what conditions, people prefer Coke over Pepsi (or vice versa), Charmin over Cottonelle; why a person goes for one type of reward and not another; why a person believes in one God over another.

In that search I have inadvertently uncovered something about viva la difference: WOMEN CYCLE, MEN CONSUM-MATE. Marketers need to understand the implications of this difference to maximize customer engagement and com-mitment.

The male is oriented to the present, the concrete, the visual, the “hit,” the win, the “me.” Evolutionarily speaking, the male must bring home the bacon. No Dilly-Dallying. No excuses. The male is in the immediate, the “now”.

The female is oriented to the conceptual, to underlying dynamics, to the relationship between things, and to stabil-ity over the long-term. The female understands and sees patterns over time.

by Dr. Bob Deutsch, Brain Sells

“Sex Appeal”Men and Women are Loyal to Different Things

Males and females both think of themselves as pragmatic, and pragmatism is intimately tied to loyalty. However, a man and a woman are pragmatic in completely different ways.

Males and females both think of themselves as prag-matic, and pragmatism is intimately tied to loyalty. However, a man and a woman are pragmatic in completely different ways.

Males act and say things like: “You’ve got to act, you can’t wait too long.” “You must know how to look at the environ-ment, know what the data and specs mean. Then pounce.”

“My goal is feeling powerful and getting peoples’ attention.”Females act and say things like: “It takes time to have

things in order.” “I want to feel good about where I am and what I’ve done.”

“My goal is continuity, building positive relationships, and establishing long-term stability.”

For example, a Seattle couple that started a small busi-ness together has different ideas about inventory. Wife: “I live to reinvest in inventory when I have cash, so I can buy stuff off-season and sell it next year at a bigger profit. I also like to have inventory just as a customer service.” Husband:

“Get rid of inventory as fast as possible.”

I

FEATURES


In general, the two genders have different ways of perceiving time, causality and power.

emales want to understand things and want to be understood. Males are more focused on explanation.

Explanation entails seeing the world as governed by finite laws that humankind can direct through successive approximations. Understanding requires compre-hending meaning from the inside out, in its unfolding. To understand, the world can’t be approached from solely an intellectual stance.

In general, the two genders have different ways of perceiving time, causality and power. This implies six strategic principles to consider when designing offerings to increase customer engagement. For each principle, males and females fall to diametrically opposite ends of a continuum:

PATTERN OR POINT. Women are intrinsically inclined to perceive more than the metric of a product attribute or an instance in time; they appreciate the underly-ing pattern (idea) that gives rise to the fleeting moment. Men look for and want explicit things that they can act on and display, now.

UNDERLYING AUTHENTICITY OR IMMEDIATE APPEARANCE. For men and women, biography (B), persona (P), and current contingency (CA) must all be factored in to evaluating what is rewarding. For woman the sequence of these priorities is B, P, CA. For men it’s just the opposite: CA, P, B.

QUALITY OR QUANTITY. For women, bigger and more is not necessarily better; rather, a steady build is more compelling than an large, impulsive but short-lived response. For men, size matters.

CONNECTEDNESS OR INDIVIDUALITY. Females prefer that communality sup-plant personal dominance; women appreciate the idea that we are all bound to-gether. Men like to display their individual prowess and win; that’s success for the male.

SOCIETY OR MARKETS. To women, numbers are not people; people have per-sonal feelings and social intentions, and this is what society is comprised of. Num-bers are mere abstractions. Males relate to markets as numbers because they can be counted and the “goodies” duly noted.

RELATIVITY OR ABSOLUTISM. Women tend to recognize that almost all issues have grays, and exaggerations to one side or the other only cover-up the reality of subtlety and nuance. Males like to paint things in clear, black-and-white terms.

Male: Do what you set out to do and finish the job. Female: Evolve.Male: Achieve. Female: Experience.Male: Stay on top of things. Female: Create good relationships.Male: Get the biggest piece you can. Female: Seek inner peace.

Developing and engaging in a long-term relationship with women customers is not as easy as ‘pretty in pink’ or ‘basic black.’ Men are not as straightforward as

“I’m Number One.” But knowing the inner reality of the genders can help generate more loyal consumers and help marketers feel more in the pink by putting them more in the black.

F

L


uch has been written about how to im-prove customer service for the retail consumer.

However, do the same rules apply in more industrial, business-to-business markets? The Daniel Group has interviewed hundreds of thousands of B2B industrial companies regarding their service transaction experi-ence with our clients. The rich data collected through our ServicePerformance program has led to the fol-lowing lessons from the front line and an answer to the question above.

Communicate, Communicate, CommunicateWhen we first started analyzing the data, one of

the surprises was how strongly communication (from either the service technician doing the repair work or from someone at the client company) correlated with overall satisfaction and willingness to refer. This rela-tionship continues still. In the words of one of our in-terviewers, “Customers have an immense amount of patience with the repair process for large machinery. They simply want management and technicians to com-municate openly and honestly throughout the process.”

Effective communication must happen throughout the service process. It begins when scheduling the ser-vice. The phone system should be set up so customers can easily reach the desired person. Customers want to know when the repair will be started and if it is not to be completed when expected. They want some idea of the cost. The communication process needs to be ongo-

ing. If there is a change in when the service is expected to be initiated or completed, customers want to know. If there are any “surprises” in the invoice, customers ex-pect to be told BEFORE the bill arrives. One dealer has gone so far as to call each customer with a repair above

Lessons from the Frontline: B-to-B Customer Service

Customers want to know when the repair will be started and if it is not to be completed when expected. They want some idea of the cost. The communication process needs to be ongoing. If there is a change in when the service is expected to be initiated or completed, customers want to know.

M

by Lynn Daniel, The Daniel Group

FEATURES


a certain amount to let the customer know how much the invoice is, what was done, and answer any ques-tions. As a result, disputes have been greatly reduced and collections have improved.

When effective communication doesn’t happen, we see the impact. We ask customers to rate their willing-ness to refer this client to someone else needing this type of service. When the customer gives a low rating, we ask why and code the reason(s). Reasons to do with poor communication (from the technician or other cli-ent personnel) are either the first or second most fre-quently mentioned reason for getting a low referral rat-ing. Communication does TRULY matter!

Consistent Service Delivery Is EssentialWhen we compare the metrics of top-performing

clients with those of the bottom-performing clients we see significant differences and not just in the key performance metrics. For these top-performing cli-ents, there is less variation in customer responses from location-to-location, period-to-period, and measure-to-measure than for clients that are performing less well. This consistency speaks to two things these clients have done quite well. First, the processes they have in place are effective, though not necessarily elaborate or fancy. They allow customers to quickly reach a needed contact person. The employee has the needed tools and information to effectively deliver the service. Employ-ees pay attention to communication. Another trait of the top- performing clients is the culture present in the company. There is a palpable customer focus that is present among all employees. Employees are acknowl-edged for doing a good job. There is a focus on effec-tively solving customer problems.

The importance of consistency is not surprising. Past experiences create a knowledge base for the customer. If the experiences are generally positive, customers be-gin new service experiences with the assumption that experiences are likely to be positive. If past experiences are less positive, too often customers start new service experiences assuming the worst. Even if the new expe-rience is positive, it may not be seen that way because of accumulated experience.

Performance Accountability MattersThe online system that is part of the ServicePerfor-

mance program is called LinkConnect. We use this tool as the platform to manage client data, enter interview results, and share results with our clients. The system also provides information on who is using the tool. Among the better performing clients, there are a few things we have observed:

a. Employees at better performing locations tend to be more frequent users of the online system than are others. They use the feedback to find out how the location is performing and make changes accordingly.

b. Senior level managers are frequent users as well. They are able to drill down and see how a loca-tion is performing. Those that need improve-ment become a focus; those that are performing well are recognized.

c. There is a regular review process in place to de-termine improvement opportunities.

Our experience with ServicePerformance is con-firming the old adage that “you manage what you mea-sure.” This was confirmed by the comments of one cli-ent not too long ago. This client is a newer client. She

For top-performing clients, there is less variation in customer responses from location-to-location, period-to-period, and measure-to-measure than for clients that are performing less well.



called to discuss how their key metrics had improved over the past few months. One of the things she made special note of was the fact that the improvement had happened without “a single special project or initiative.” The improvement happened when managers were made aware of their performance measurement and held accountable for it. We recommend finding an effective way to measure your customer service delivery.

High Quality Service Can Be Delivered in a Down Economy

It is thought to be difficult, if not impossible, to deliver high quality service in a down economy. There are two clients in the ServicePerformance program that have proven this wrong. One is in an area of the country that was hit by an economic downturn sooner than others and the downturn has persisted. Even in the face of these economic challenges, this company has improved its service delivery. The chart on the right shows the monthly trend for the company during a tumultuous 2008. The metric is NPS (Net Promoter Score), which is an indication of a customer’s willingness to refer. As you can see, the scores for this client have been on an upward trend this year even in the face of a tough economy.

This client is not the only one with a track record like this. There are several others. Managers have made this improve-ment happen by having a clear focus on improving the areas that matter most to customers. They know, in the case of one client, that customers rated them poorly on the job getting done right the first time. After technicians improved their perfor-mance, customer satisfaction rose. In the case of another cli-ent, the regular feedback has prompted employees to pay more attention to quantity and quality of customer communication while service is being rendered. Again, customer satisfaction improved.

NPS Score (January 2008 - October 2008)90%80%70%60%50%40%30%20%10%0%

69%76%73% 72%

78% 78% 78% 77% NPS6 mo moving avg.

Number over points is monthly NPS score.

#ResponsesJanuary ‘08FebruaryMarchAprilMayJuneJulyAugustSeptemberOctober

70555953274555244153

79%

Janu

ary

‘08

Febr

uary

Mar

ch

Apr

il

May

June July

Aug

ust

Sept

embe

r

Oct

ober

71%


Performance improves with the frequency with which employees have been informally recognized for doing a good job. Something to do that is simple, easy, and costs nothing yet is often overlooked!

Lessons from the Frontline: B-to-B Customer Service (continued)


If You Want Outstanding Customer Service, Focus First on Employees

There are two clients in the ServicePerfor-mance program that are consistent top per-formers in their industry. When asked how they did it the reply was the same: culture. They went on to say that having a strong fo-cus on customers is a result of many things but one of the most important is recognizing em-ployees when they do well. This informal find-ing is buttressed by research done by Gallup, the research and polling organization. Their research showed twelve areas that were the most important in differentiating companies with superior financial performance from those that performed less well.

One of these areas is the frequency with which employees have been informally recog-nized for doing a good job. Doing something that is as simple and easy as an email, and costs nothing, is yet often underutilized.

One particular story from our database illustrates the power of a positive comment. During an interview for one client a customer mentioned how pleased he was with a recent service because of the technician who did it. The technician’s name and accolade was re-ported back to the client’s senior management. The details of this positive customer service experience that the technician was respon-sible for was then forwarded by the president to all 1,600 employees. It included a note ac-knowledging the technician’s good perfor-mance and reinforcing the fact that this is the kind of “Oh, Wow” service that is part of the company’s strategic plan.

While service delivery in business-to-business industries is very different than in consumer markets, there are similar lessons to be learned for improving the customer ex-perience. When developing strategies for im-proving customer service, we advise our cli-ents to focus on three primary areas: Process, Skills, and Attitudes. Of these three, the most important we find, is having people with the right attitudes. If the attitudes are positive, employees will develop the skills and look for ways to improve processes. Attitudes are the all important building block for outstanding customer service. L


HEAR LYNN SPEAK AT THE 2010 LOYALTY EXPO PRESENTING

Strengthening the Engagement Between Industrial Customers & Employees: Little Things Matter

“Among our current economic challenges, many industrial markets are facing more competition for a smaller pool of customers. Price and product advantages are easily duplicated, but top quality customer service is much more difficult for competitors to overcome. As a result, industry leaders are focusing on measuring, managing and improving their customer experience.

I am looking forward to the Loyalty Expo where I will provide benchmark information that our clients are using to gauge progress in improving customer service. I will also discuss which benchmarks are most strongly correlated to high levels of customer satisfaction.”

-Lynn Daniel, The Daniel Group

t was Peter Drucker who said “that the purpose of business is to create a customer.” Phil Kotler went on to tell us that marketing plays a very important role in this effort when he defined marketing “as the science and art of finding, keeping and growing profit-

able customers,” (Kotler on Marketing, 1999). Over 20 years ago, the TARP (Technical Assistance Research Program, U.S. Office of Consumer Affairs, 1986) studies found the cost of attracting a new customer was five times the cost of keeping a current customer. Research since has well proven there is a link between customer satisfaction, purchase decisions, customer experience and customer loyalty and tenure.

Research findings have consistently found that highly satisfied customers have a strong relationship with an organization and generally buy more or own more of an organization’s products and services. And these highly satisfied customers are also more likely to become recommenders. Customer buying more and referring more contributes to increased customer value. And the flip side also seems to be true—sub-par customer experience leads to customer dissatisfaction, attrition, diminished purchases and ultimately an increase in cost per customer, which erodes customer lifetime value. So it makes sound business sense to take care of our most important asset, our customers and to maintain satisfied and loyal customers.

by Laura Patterson, VisionEdge Marketing

Establishing Key Metrics for Measuring the Value of Loyal Customers

I


FEATURES

There are some excellent examples in various indus-tries that demonstrate the link between customer experi-ence, satisfaction, loyalty and market share. For example, Southwest Airlines and Nordstrom’s are both known for setting the standard for consistently delivery extraordi-nary customer service in their industries. And several of the largest U.S.A. banks have entire departments devoted to providing excellent customer service. Studies in the re-tail industry found that the more service behaviors exhib-ited the more likely customers were to be highly satisfied with their overall experience.

According to The Service Profit Chain (Heskett, Sasser and Schlesinger, 1997), the more satisfied customers are, the more likely they are to be converted into loyal custom-ers, that is, customers who are more likely to repurchase and recommend. In the banking industry, studies have

also shown a clear relationship between advocacy and service quality. The MSR group study (published 2007) found that 65 percent of U.S. consumers are advocates of their bank, that is they are both willing to recommend their bank and intend to open additional accounts (repur-chase).

Studies in the hospitality industry found a link between hotel employee engagement and guest satisfaction. Ho-tels with employees who can align their attitudes and be-haviors with guest expectations are more likely to create guest loyalty. The real challenge then is for every compa-ny to develop highly satisfied customers and strong advo-cates. In the 1990s, customer satisfaction was all the rage as a key metric. Today, it has been replaced with customer loyalty and customer experience. A recent study from Aberdeen Research, “Recessionary Marketing: How Best-in-Class Companies are Weathering the Storm”, polled 250 marketers across various industries, and found that 82 percent of respondents have reallocated their market-ing spending to invest in more customer-centric activities that tie back to bottom-line revenue. As a result, their metrics will need to change as well. Metrics related to brand awareness and shareholder value are being pushed further down on the list, while metrics related to custom-ers such as share of wallet, loyalty, and customer reten-tion equity are moving to the front of the line.

In addition to lifetime value and retention, there are six additional key metrics to consider when it comes to

measuring customer value:1. service quality, 2. touch point effectiveness, 3. customer satisfaction, 4. customer experience, 5. customer advocacy and 6. customer share of wallet

These six serve as valuable indicators of lifetime value and retention. Customer retention continues to be one of the most important yet misunderstood areas of customer strategy. While there are many things C-level executives need to know about customer retention, the most impor-tant is that any strategy you undertake to keep customers must be done under the overall heading of creating value for your enterprise and your customers.

Keeping your existing customers and growing their

value requires having a full understanding of their wants, needs and desires. This often requires a company to switch from a transaction perspective to a loyalty-build-ing perspective.

FIVE STEPS TO KEEPING YOUR CUSTOMERS1. UNDERSTAND WHAT CUSTOMERS VALUE

a. Don’t assume you know what your customers want

b. Do your homework—Conduct frequent cus-tomer research

2. BE PROACTIVE—ANTICIPATE FUTURE NEEDSa. Understand whether solving future needs

means new or different product features, bene-fits, changes in services, etc., and put these into play before the customers leave your company to find what they want somewhere else.

3. DELIVER ON YOUR PROMISES a. Your word is your bondb. If anyone makes a promise, keep it.

4. DELIVER YOUR PRODUCT AND SERVICES CONSISTENTLY EVERY TIME

5. CULTIVATE LONG-TERM RELATIONSHIPS

In addition to customer retention (churn/attrition), cus-tomer satisfaction, and loyalty every company should be familiar with and know how to calculate metrics related to experience, share of wallet, value and advocacy. These metrics are vital to helping you keep and grow the value of your most important asset, your customers.


The real challenge then is for every company to develop highly satisfied customers and strong advocates.

L

Service Quality and Touch Point Effectiveness

Customer Satisfaction and Customer Experience

Customer Loyalty/Advocacy and Share of Wallet

Customer Lifetime Value

Retention Equity

he science of customer satisfaction management has come a long way in a short time. It seems like just

a few years ago most companies were still gathering feed-back with a few telephone surveys or an annual business reply card mailing. No one had heard of a “Net Promoter Score” (NPS) or an “Enterprise Feedback Management” (EFM) system.

Now that we have more sophisticated survey tools and powerful mechanisms for measuring and benchmark-ing customer feedback, it’s easy to become fixated on the scores themselves. All too often people know their satis-faction score or loyalty index—by department, by region, by product, or by vertical market—but they don’t have a clear sense of how they achieved those scores or, more im-portantly, how to improve those scores.

How do we get beyond mere measurement mental-ity and into actually moving the needle and improving customer relationships? That’s the challenge we’ve been working on in the Customer Intelligence Group at Sim-plexGrinnell, and I believe our results could provide valu-able lessons and insights for other companies.

Eight Percent Improvement in 90 DaysSimplexGrinnell is a leader in the fire and life-safety

industry and has over 150 offices throughout the United States. In our business, it is critical for us to measure and monitor customer satisfaction at every interaction—from technical phone support from corporate to field support

If you want to improve your customer relationships, you need to understand why customers rate you the way they do; and you need a systematic way to respond to their issues.

through our local district offices. We want to know our customers so well that we have the ability to provide a service before they even request it.

In 2004, we began an overhaul of our customer satisfaction (CSAT) program to get closer to the truth about our customers’ experiences. We wanted to mea-sure and report on customer feedback in an open and

honest way and establish consistent metrics so we could monitor our progress.

With the help of the MarketTools CustomerSat product and concepts from “The Loyalty Effect,” by Fred Reichheld, we focused on five key measurements, one of which is SimplexGrinnell’s “Net Customer Advo-cacy” or NCA, which subtracts detractors from advo-cates and provides a ranking on a five-point scale (it’s similar in concept to NPS). Using NCA gave us a con-

Customer Satisfaction: Keeping Score Is Only the First Step

by Karl Sharicz, SimplexGrinnell

Analysis led to insights that helped answer the crucial “why” questions: If a customer was not entirely satisfied, why not?


FEATURES

T


sistent way to assess company performance, regional performance, and local office per-formance.

Our NCA scores and rankings based on customer surveys are accessible in real-time to every district and regional office by way of the MarketTools CustomerSat EFM solution. In early May 2009, one of our re-gional managers approached the Customer Intelligence Group to ask how they could improve their regional NCA score ranking. The real question revolved around deter-mining root cause—knowing exactly what might be keeping their customers from be-coming more loyal and stronger advocates.

The Customer Intelligence Group de-veloped a plan to increase that region’s NCA score, drawing on the capabilities of the MarketTools CustomerSat EFM solu-tion. Specifically, the plan gave each district manager full access to the data, feedback, and analytical capabilities contained with-in the EFM, including customers’ answers to open-ended questions about their satis-faction.

Collectively, this analysis led to insights that helped answer the crucial “why” ques-tions in detail: if a customer was not entirely satisfied, why not? What exactly had gone amiss? Which issues weren’t resolved ac-cording to expectations? Were there com-mon themes among the detractors’ com-ments? Were comments directed at specific products or services?

As a core element of the NCA improve-ment plan, the Customer Intelligence Group arranged and scheduled individual one-hour workshops for each of the dis-trict teams within the region. Attendance was required for the regional manager, the district general manager, and the technical support manager. Other stakeholders in the district were strongly encouraged to attend.

At the workshop, detailed survey find-ings extracted from the MarketTools Cus-tomerSat database were delivered to the team. The presentation included:

•Customer ratings for each service touchpoint of the transaction

•The key drivers of customer satisfaction for each district

•The demographics of the customers randomly surveyed for each district of-fice

•Verbatim customer commentsIt is important to note that the customer

commentaries were presented randomly and without identifying the organization or the customer who took the survey. This was done to keep the focus on the issues at hand rather than the individuals taking the survey.

At the conclusion of the initial workshop session, the Customer Intelligence Group scheduled a 90-day review session, with the understanding that each district would by then have implemented their action plan and be in a position to articulate how that plan led to changes noted in their NCA scores.

At the 90-day review session, it was discovered that this region—through the actionable intelligence provided by the Cus-tomer Intelligence Group coupled with a concerted focus on customer service—had improved its NCA score a full eight percent, thereby achieving their primary goal. In-terestingly, during the same period, other regions’ NCA scores changed by an average of one percent, a clear indication that the improvement resulted from the workshop and subsequent action plan implementation.

Moreover, as the experiment contin-ued so did the increase in NCA scores. At the 180-day review session, the region sur-passed the 10 percent improvement point; and the most recent quarterly snapshot of NCA performance by region suggests that this region has made significant progress toward being in the top position among all regions for NCA. This is truly a remarkable and commendable achievement.

We’re now finding that any skepticism that might have existed in regard to our NCA rankings and our EFM system have been transformed to enthusiastic accep-tance—from senior management to techni-cal specialists and operations personnel. We’ve seen that people appreciate having hard data to show them how to improve, what to improve, and where to focus.

We’ve seen that people appreciate having hard data to show them how to improve, what to improve, and where to focus.



Best Practices from Lessons LearnedThe actions taken by each district within the region

varied according to their unique customer satisfaction drivers, but in general terms here are just a few of the practices that led to NCA score improvement:

•All key service personnel were encouraged to read the verbatim customer comments stored in the Market-Tools CustomerSat system.

•Senior management within the district used the data to understand the experiences of customers more completely so that they could engage with them more directly.

•As a result of the data, more emphasis was placed on returning customer calls and calling customers in ad-vance of service visits.

•Individual employees were recognized for service excellence through “top 10” and “kudos alert” noti-fications generated by the MarketTools CustomerSat system.

•A concerted effort was made to achieve a first-visit fix.•The frequency of customer visits, especially by dis-trict managers, was increased.

•Achieving faster service recovery was made a higher priority.

•Employees were empowered to resolve certain issues directly with the customer without the need for man-agement intervention.

•Customer feedback and customer issues were added to the forefront of all service team meetings within the district.

Be Prepared to Respond to FeedbackThe MarketTools CustomerSat EFM system used at

SimplexGrinnell now handles more than 10,000 surveys and other forms of customer feedback each year and stores more than 35,000 verbatim customer commentaries. See-ing the results achieved by one region, other regions have become more interested in the improvement process and the capabilities of the system. But as we’ve expanded our customer satisfaction program, we’ve always kept one key concept in mind: if you ask customers for feedback, you have to be ready to respond to what they tell you.

That is why the Customer Intelligence Group has fo-cused on developing and implementing consistent pro-cesses for managing customer issues on a global basis. We strive to act not just as an escalation channel for customer problems but as a clearinghouse for all activities related to customer relationships.

In the words of our company president, Jim Spicer, “Customer satisfaction is not simply a program here; it’s part of who we are—it’s ingrained into the fabric of our company.”

We know that the quality of the customer experience is the true differentiator for SimplexGrinnell, not just the quality of our products and services. So for us, it was important not only to accurately measure the quality of our customer relationships, but to take action to improve those metrics. MarketTools CustomerSat has played an integral role in our ability to do that. Today we have a plat-form in place that allows us to be much more proactive in anticipating and responding to customer needs—so we can consistently deliver offerings that exceed customer expectations.

So for us, it was important not only to accurately measure the quality of our customer relationships, but to take action to improve those metrics.

Customer Satisfaction: Keeping Score is Only the First Step (continued)


L

Loyalty Management™ • LOYALTY360.ORGTO REGISTER, CALL 800-647-7600 OR 781-939-2500

e-mail: [email protected] • www.worldrg.com/efinance

Organized by:

The e-Finance Marketing & Innovation Conference

Featuring Innovative Thought Leaders from Banks, Credit Unions, & Financial Services

Jesse TorresPresident and Chief Executive OfficerPAN AMERICAN BANK

Shari StormChief Marketing OfficerVERITY CREDIT UNION

Jennifer GrazelVP of Digital Strategy and MarketingServicesPRUDENTIAL

William AzaroffDirector of Web Engagement & BankingVANCITY

Kevin LynchSenior Vice President, eCommerce Contact Center1ST MARINER BANK

Steven L. Kruskamp Jr.eCommerce Marketing Manager1ST MARINER BANK

Jeff GahnzVice President of MarketingNICOLET NATIONAL BANK

Jim CraigVice President, Marketing1ST ADVANTAGE FEDERAL CREDIT UNION

Julian ChuManaging Director and Chief OperatingOfficer, AustraliaENOVA FINANCIAL

Robert RichardsonOnline Marketing ManagerNEVADA STATE BANK

Ted JosephsonFVP Direct Banking & OperationsPEOPLE'S UNITED BANK

Daniel J. NadelbergManager, Web Analytics, BusinessIntelligenceSOVEREIGN BANK

Sanjay GosaliaSenior Manager-Acquisition Planning, Performance & ProfitDISCOVER FINANCIAL SERVICES

Best Practices That Leverage Innovation, Brand Differentiation,Online Strategies & Effective Marketing Channels

Interactive Sessions On New Developments• Mobile Marketing• ROI for Social Networking• Channel Integration• Regulation Navigation

• Web 2.0 to 3.0• Marketing Behind

the Log In• Increasing Conversions

Pre-Conference WorkshopTapping Into Mobile Marketing, the MostPervasive Channel in Financial Services

Richard K. CroneFounder & Chief Executive OfficeCRONE CONSULTING, LLC

Save $400Mention Promo Code:KAX499

June 22-23, 2010 • The New York Helmsley Hotel

Sponsor

Media Partners

Associaton Partner

f you’ve ever been one-half of a couple, you know this relationship is one of the most complicated you’ll ever

navigate. The peaks and valleys of relationships with our “significant others” can simultaneously confound, confuse, complement and complete us.

But too many valleys drive many couples straight to the counselor’s office—where, if our mediator is skilled, we learn strategies for improving the way we perceive, interact with and relate to our “better half.” We learn to look at the whole individual, rather than seeing only what we want to see. We learn to help them understand where we’re coming from. We learn how to bring out the best in them. And we learn how to communicate directly, rather than assuming we know what they’re thinking or expecting them to read our minds.

Customer Relationship Management (CRM) is a lot like being half of a couple. The tips we get from couples’ coun-selors can serve us well as we work to manage, sustain and nurture our business’s most vital relationships.

The Dating GameFormulating a CRM strategy is a lot like dating. On the

surface, that can sound like fun. But talk to a perpetually single guy or gal, and he or she will tell you that dating can be a lot of work.

If a successful relationship is your goal, you can’t just wade half-heartedly into the dating pool. You need to do some research and preparation. What types of people may be right for you? What types are clearly not worth your en-

ergy? Figure out whom to target, and where to concentrate your efforts. Also, get clear on what you have to offer.

Show Some AffectionLet’s say you’ve chosen well. Things are progressing. But

you notice some distance. Are you reminding your custom-ers that you care for them? To cement your credibility and build goodwill, you’ll want to show more than tell. Remind them of why they’ve chosen you.

Make No AssumptionsYou think you know what your customers want. But have

you asked them? You may have been off base—or things may have changes. Ask, directly and specifically, what they’re looking for in the relationship. That way, you can give them what they want—and get what you want from them.

All I Really Need To Know About CRM I Learned In Couples CounselingFor a winning approach to nurturing your most important business relationships, look no further than the counselor’s couch

You think you know what your customers want. But have you asked them? Ask, directly and specifically, what they’re looking for in the relationship. That way, you can give them what they want—and get what you want from them.


FEATURES

I

by Greg Nelson, agencyQ

Let Them Know They’re Being HeardWhen you do ask questions, listen carefully to the re-

sponses. And let your customers know they are being heard.In any relationship, people want to be understood. That in-cludes your customers. They’re not simply there to listen to you and your stories. Your customers need to know you are taking what they tell you to heart. Once customers have spo-ken, lip service on your part won’t do. To keep them with you, you’ve got to demonstrate that you value their input, ideas and feelings.

Demonstrate AppreciationAs we get more comfortable in a relationship, we tend

to take the other for granted. No one likes this—and most people won’t stick around if they’re getting that feeling. So thank your customers for what they do for you and your brand—for their loyalty, their referrals, their ambassador-ship. Make ongoing efforts to let them know they’re greatly appreciated.

Don’t Get ClingyAt the same time you’re showing love and appreciation,

you need to be careful not to cling to your customers. It’s fine to let them know you miss them—but don’t go overboard, or they’ll be turned off, perhaps even suspicious. Avoid the temptation to call or e-mail your customers too frequently, especially when they’re at the office, or you risk annoying them. Everyone needs a bit of space. Let the relationship and the communication flow naturally.

Don’t Rush ThingsSo you think you’re in love…Professing your love too

soon can send the object of your affection running fast and far. Your sincerity may come into question. Either can sabo-tage a relationship full of potential. So before you declare your feelings, make sure you understand them, and that your customers are ready to hear them.

Make Them a PriorityYou’re busy, your customers are busy. But you need to

make time for each other, or they’ll be left wondering wheth-er or not you really care. Set aside time in your schedule for your customers. In whatever way is appropriate, make sure you spend time on or with them.

Sweat the Small StuffIt’s not just the deep, long heart-to-hearts that bond custom-

ers with your brand. Equally important are your interactions in everyday life. Short, thoughtful conversations or interactions that make an impact can go a long way toward building loyalty. Your handling of everyday situations, the small ways you show your support, and your consistent reliability help strengthen that bond.

Find a BalanceIn every relationship, there is give and take of resources. Time and energy. Money and loyalty. Successful brands strike the right balance with their customers. No one wants to feel like they’re giving more than they’re getting, or wasting their resources on something that just doesn’t give back in the same way. Pay atten-tion to the balance, and readjust as needed to maintain it.

Keep Their SecretsMuch in a relationship is exclusive to the parties in it—and

should never leave those boundaries. It’s wrong—and danger-ous—to divulge things a customer has told you privately. Trust is key to any successful relationship, and if you violate it, you could find yourself on receiving end of a breakup.

Be RealisticA meaningful relationship doesn’t happen overnight. It takes

time, effort and ongoing commitment. A relationship is a contin-ual journey, not a series of grand gestures. Sending flowers every so often will not, on its own, keep a relationship intact. In the same way, your new technology platform or loyalty program will only be as effective as the business plan behind them. Keep your expectations in check, remembering that you need to bake the cake before you add the frosting.

Strive for UnderstandingIn any relationship, we are always learning. Each customer

is valuable in your quest to understand your market, and each is looking to understand as much about you. In the most success-ful relationships, both partners work toward the best possible understanding of the other and themselves—adhering to the aforementioned advice to help them along the way. Your CRM initiatives should reap understanding not only of your customers, but also of your business. Advancing both will lead to the most productive, satisfying and enduring relationships.

Much in a relationship is exclusive to the parties in it. Trust is key to any successful relationship.


L

witter has become a game changer for marketers everywhere, and the content posted on this site is 100

percent controlled by consumers themselves, not “pushers” in conference rooms. Which is why, if approached correctly, businesses could be enjoying impressions and contact num-bers that they have never seen before. But if ignored, they stand to alienate customers and losing out to others who “get in on the conversation”.

Your brand is likely being Tweeted about (some good, some bad), so how do you participate, and eventually turn those tweets to cash?

If you’ve been living under a rock and still don’t see the importance of social media, here are a few statistics for you to chew on:

•Twitter hit a major milestone this month when the 10 billionth tweet was chirped, proving once again, that this is no fly-by-night trend. (You can watch the live Twitter counter your-self http://popacular.com/gigatweet/).

•According to twibs.com, there are 22,167 twitter businesses on Twitter, 1,103 currently tweeting special promotions. Surprised by how few of the 22K are advertising deals? Don’t be. Coupons only work on Twitter if they are really outstanding deals (@RSHo-tel will occasionally tweet New York City Hotel rooms for $99

– these get retweeted (RT) like wildfire).

The best use of Twitter for business isn’t to post coupons; it’s to insert your brand into the sub-conscience of the minds of all those tweeters (23,573,178 unique visitors a month).

Facebook boasts equally impressive stats, with over 400 million active users (50 million users visit their account daily, with 35 million updated their status daily.) Additionally, these

users are commenting, joining groups, “liking”, or inviting oth-ers users to events in droves.

So we’re clear that the reach potential on both of these social media sites is extraordinary, but how do you get in on all this action the right way?

First: Understand the Social Media CultureWith any marketing channel, there is always the risk of

turning people off. It’s important to understand how online communities behave, and how to speak the language.

Remember that these sites reflect today’s “iChoose” culture. Social sites reflect an increasing flexibility to “customize” many aspects of peoples’ lives, allowing them to cater any media to their personal—and often fickle—interests. Additionally, social sites provide a platform and endless methods for sharing those opinions.

So not only could a person be complain-ing about your brand, they could be stirring up the shared opinions of others – in a very public arena.

Also, these users are extremely adept at pushing their own agendas, and that may

include lauding or booing your brand—and never underesti-mate the power of a super user or online celebrity.

Case Study: Director Kevin Smith (1,662,280 + followers) gets bumped from a Southwest Airlines (1,029,440 + follow-ers) flight, possibly because he might have been deemed a

“passenger of size” and may have required two seats. Smith took to Twitter to launch a “Twar” with Southwest Airlines and an online power struggle between the two Twitter Camps ensued. (Read more about this story in my blog: http://whereinthewebareyourcustomers.blogspot.com/2010/02/southwest-vs-kevin-smith-can-southwest.html.)

@SocialMedia: #Tweeting and #Loyalty by Michelle Marquardt


Your brand is likely being Tweeted about (some good, some bad), so how do you participate, and eventually turn those tweets to cash?

T


The ending to this story provides reassurance for the over-ly cautious marketers dragging their feet on launching social media strategies—the million plus Southwest Airlines twitter followers are still loyal fans, and Kevin’s fans also remained tried and true. In the end, both brands suffered some blows, but neither lost large numbers.

For Southwest, it was a lesson of how to tackle such a high-profile crisis. A key to their quick recovery was address-ing the issue head-on and then switching gears to more posi-tive stories. Kevin Smith (the brand) also came out strong as he stirred up important discussions about a long established rule that may indicate unfair or cruel treatment of overweight passengers, reaching new audiences and communities.

Second: Listen First, Tweet SecondDon’t just jump into this without listening first. Use sites

like TweetBeep (which works like Google Alerts—which you should also be using), to monitor your Brand name on Twitter. You have a problem if you don’t get many results, and you obviously have a problem if those results are negative. How-ever in the second case you are presented with an audience (which equals opportunity.)

Third: Leverage Existing Customer Service Protocols

To get started, you needn’t look any further than your Cus-tomer Service manual. You empower these reps to address customer complaints and concerns, and the same respons-es can be re-purposed for online complaints. There is more risk for companies that ignore online complaints than those that allow employees to attempt to help. Ignorance is not bliss—and many people are satisfied with just feeling heard and addressed. Keep in mind that it’s a wonderful thing to be proactive about issues rather than wait for the inevitable complaint call. By then it may be too late to reverse a negative experience. By listening online and reaching out to unsatis-fied customers—you accomplish two things; one, you let the complainer know you take them seriously and are offering to help and two, you do this publically—creating accountability

for both of you. If the complaint is bogus, you are free to say so—publically—which hurts the complainers legitimacy.

Fourth: Understand the Players and Their “Twitterality”

Just like the “real” world, there are varying levels of influ-ence online. Learn to distinguish the powerful from the meek. There is a high level of discretion on the boards and tweeters (as well as Facebookers and other online participants) can quickly measure anyone’s authenticity.

When you see complaints pay attention to them. Also critical to watch are the number of complaints a person posts, what types of reactions they garner, how many followers do they reach, and how often they are retweeted. If you’re South-west dealing with a Kevin Smith, you need to step up your game. If you’re a company dealing with a one off person who is having a bad day and has 2 followers, you have a lot less to worry about.

Finally: How to “Push” Using Social MediaIt’s not impossible, but you have to be careful! Tweet-

ers and Facebookers are incredibly savvy and can sniff out commercials, like a coupon—unless it’s an incredible deal. Leverage social media to establish your brand as a leader in its respective industry, and the loyalty will follow. Seek out common concerns or questions related to your industry and provide free, no strings attached solutions and tips. Then wait patiently, because eventually users that are benefitting from these messages will request product or purchasing in-formation. It’s social, not a sales call. Remember that this is the equivalent to a cocktail party— nobody likes getting stuck waiting in the bar line with that sleazy sales guy—they like the guy who is clever and tells you something you didn’t know. Also remember that Tweets are 140 characters. It’s not the place to tell a complicated story—it’s a place to lead people to that story. Quick stats, breaking news and valuable infor-mation. This increases your chances of being retweeted or shared and thus reaching a broader audience. It also shows that you are playing the social game, not selling anything.


The best use of Twitter for business isn’t to post coupons; it’s to insert your brand into the sub-conscience of the minds of all those tweeters (23,573,178 unique visitors a month).

L

e’re back to ten years ago when the Internet was hot. There are

so many new technologies and so much opportunity. It will be interesting to see which technologies break through the clutter and succeed.”

These are the words of a wise marketer I spoke with recently. You know, he’s right. There are so many new bright, shiny things out there for us, how do we choose?

We have been and are continuing to embark on the next technological frontier. Every day, new ideas and cutting-edge technologies are being developed—from social media sites and applications, to technologies that track behavior through these media, mobile marketing and loy-alty initiatives, and point-of-sale reward and recognition.

As marketers, we know we need to jump in and give these a try. On one hand, there are some short-term solutions that seem promising. But should I invest in these? And if so, how much do I invest knowing I’ll need an upgrade (read: totally new solution) within two years? On the other hand, what I really need is a long-term solution, but how do I choose the right one? From strategy to provider there are so many choices.

At L o y a l t y 360 we’re fortunate to get a d e e p e r look into many of these new technolo-gies. And, we hear a lot of feedback, judg-ments and opinions about how/when/why they are best used to drive marketing objectives.

Here is some of what we’re hearing:

First and foremost—Don’t forget the ba-sics! Technology is terrific, but the most important aspect of your business is the intimate relationship you have with your customers. Remember—there’s nothing

So Many Shiny Things, How Do I Choose?

intimate about swiping a card at a register. Sure there’s “touch” but what do you re-ally “feel”?

Social Media When it comes to social media, the

questions seem to be about the ‘how’. How far (how much) do we share and commit? How much resources do we commit to this initiative? How do we tie this to CRM? For those of you looking for answers, read Michelle Marquardt’s ar-ticle on page 40.

MobileThere are three hot topics when it

comes to mobile: customer engagement, digital coupon and digital payments.

Mobile is a great way to engage spe-cific demographics in your brand. Many organizations are using mobile to deliver promotional advertising. While Marketing 101 taught us that marketing and promo-tional efforts need a strong call to action, we often ignore this key objective in our brand advertising. But with the advent of mobile, there are no more excuses. (Look at Hipcricket for example, which has been assisting brands like Staples and Doritos’s not only in identifying customers, but also

being able to put an ROI analysis on specific ad-vertising and promotion campaigns.)

Another force driv-ing the usage of mobile is that many marketers have mandates to move advertising from print to digital. The reasons for

this shift span cost reduction, immediacy, and going green. But achieving these goals is not always a slam-dunk as many of the digital couponing solutions available re-quire POS integration—which means not hitting our cost reduction goals. Still, there are a number of options that work within your existing POS. For instance, Motorola has a solution that works with their POS equipment; edo Interactive’s solution happens near POS providing the

immediacy without POS implications. While there are many solutions—and many more will be coming—we’re seeing that future applications will combine with other POS enhancements.

In last week’s conversation, my wise marketer referenced a quote from 2000 about how mobile payments are immi-nent. Ha! 10 years later and still no sig-nificant mobile payment options, let alone usage. While there are new technologies, like Bling Nation, the experts we’ve spo-ken to believe this is still at least 5 years away.

Point-of-sale Rewards and Recognition

The overall goal with point-of-sale R&R is to provide immediacy to rewarding customers. We all know that rewarding at the time of action helps build and rein-force habits. As Pavlov showed us, when teaching your dog a command you need to reward positive behavior immediately. You don’t wait two weeks to give him a treat; he’s already forgotten what he’s done. We as consumers are not so dif-ferent. We’ll remember those brands that have rewarded us, not to mention those that have made it easy for us.

There are a number of new technolo-gies currently available (such as Maritz Realtime, Sparkfly and Creditz) that allow us to do this by incorporating brand/CPG offers (read: provide digital couponing).

Our best advice: Do your homework both externally and internally. Understand your customer as fully as possible. Who are they? What do they want? How do they want to interact with you? If your demo-graphic is people 50+ years old, mobile probably isn’t a core solution you should be considering.

Internally, understand your systems and also your culture. Know what’s pos-sible, the realistic capacity of your system and your team. This will help you hone in on the technologies that make the most sense for your business. We all like shiny new things, but they’re not always the most practical or the best fit.

by Erin Raese, Loyalty 360


Technology is terrific, but the most important aspect of your business is the intimate relationship you have with your customers.


W

L


TALK TO YOUR CUSTOMERS IN THEIR LANGUAGE. MOBILE.

Integrated Mobile Marketing.

Gift and Loyalty Programs.

Pay with Your Phone.

Mocapay knows how to put your business

into consumers’ hands. Literally. Mocapay

is the only mobile experience platform for

innovative merchants.

CONTACT MOCAPAY TODAY.

[email protected]

www.mocapay.com


Biometric RecognitionBiometric Recognition was formed to develop improvements in customer re-

lationship management in the retail point-of-sale and casino gaming operations spaces. The goal was to apply cutting edge technology to the problem of accu-rately capturing each customer identity when and where transactions take place. The result has been the development of an award-winning product for the im-provement of casino management systems. Biometric Recognition has recently worked with Bally Technologies, one of the largest manufacturers of casino gam-ing machines and casino management systems in the world, to implement player tracking using biometric technology embedded into casino gaming machines.

Biometric Recognition holds seven patents issued by the U.S. Patent and Trademark office for its inventions. These patents are currrently available for li-censing from Biometric Recognition. Licenses are currently offered in the casino gaming space separately from the retail point of sale space.

At the retail point-of-sale, the biometric identity of customers can be cap-tured and compared to databases. The presence of undesirable customers may trigger management actions. The transactions of customers may be appended to their identity for use in the implementation of various types of marketing pro-grams. These programs may be designed to induce customer loyalty, increase purchasing volume, increase purchasing frequency, or alternatively, induce brand switching or defection to competitive products. This marketing service may be sold to product manufacturers or distributors, just like advertising, coupon place-ment and direct mail services are sold, thus creating more revenue for the retailer.

All of this was made possible by advancements in biometric technologies, and computer processing power, networks, data storage devices, and database man-agement.

Want to learn more? Check out Alexandra Bohnet’s book Using Biometrics in Customer Relationship Management.Increasingly, companies are turning to biometrics to help them meet the challenge of retaining profitable, long-term customers. By using physiologi-cal or behavioural characteristics such as face geometry, voice, fingerprints and irises, customers can verify their identities for purposes ranging from payments to bonus point systems. This book examines the role that bio-metrics currently plays in Customer Relationship Management as well as

possible future uses and ramifications (for example, data privacy issues), from both the customer’s and the company’s perspective. In addition to a review of biometric methods, standards and tools, it includes a checklist for consumers considering enrolling their bio-metric information in a CRM program and also recommendations for companies who may wish to implement biometrics. Iris recognition programs at selected airport automated border controls, a Point of Sale fingerprint payment system and a season ticket face rec-ognition application are examined in detail.

LoyaltyInnovationNEW PRODUCTS, ADVANCEMENTS, & TECHNOLOGIES


Maritz Real-Time RewardsEngage customers in real-time at the Point of Sale to increase sales

and drive customer loyalty. When customers sign up for a retailer’s rewards program through Maritz Real-Time Rewards, they merely swipe a credit, debit or loyalty card and are instantly registered. The program then begins tracking purchasing behavior in order to deliver targeted promotions. These behaviors can include spend, number of visits, and time lapsed since the last visit. Maritz Real-Time Rewards enables retailers to set up promotions to drive frequency, increase average ticket, reward best customers, cross sell, market new products or deliver targeted messaging. In addition, retailers can drive customers towards higher margin products and/or reward behavior with low cost items.

This targeted approach ensures the right customer gets the right offer, receiving exactly WHAT they want, WHEN they want it.For example:

Chad is a truck driver who stops at “Burger Land” every week. When he uses his registered debit card, the printed receipt offers him a free breakfast sandwich if he comes back in within five days. He does not need to bring the printed receipt back. He simply swipes his card to redeem his free sandwich next time.

Liz is a frequent “Books & More” shopper and earns three points for every dollar spent when she uses her “Bank of the Nation” credit card. Upon checkout at “Books & More,” she will be prompted at the POS to use her “Bank of the Nation” reward points to pay for all or part of her purchase and reduce her out-of-pocket costs. This instant promotion requires nothing but the card Liz already uses.

For more information visit www.maritzrtr.com.


InfinianInfinian has created a patent

pending, POS technology that en-ables closure of the last mile in mo-bile coupons, promotions, loyalty

cards, Mobile ticketing, and direct mail. The Plug and Play software resides on the payment terminal and/or scanner, easing the integration into your stores POS. Infinian’s pro-gram captures consumer behavior data at point-of-sales/services for digital coupons and tickets to provide verifiable Redemption and measurement of ROI on Mobile Marketing campaigns & Mobile Commerce transactions.

Infinian has married their POS software with a SaaS based cloud service for retailer enablement. The hosted Infinian Coupon Cloud (www.mycouponcloud.com) and Ticket Cloud enables retailers and marketers to create, manage and dis-tribute coupons and tickets which are then tracked in real-time on an individual consumer level via a Unique Code when the coupons/tickets are redeemed at Point of Sale (POS) terminals. Their cloud-based service allows you to grow and own your very own mobile database of customers. This da-tabase provides detailed analytics, segmentation and con-sumer buying behavior, ultimately providing retailers with a one-to-one communication with their customers.

With Infinian’s Coupon Cloud and POS Software, there is only one point of integration; one system. Infinian’s POS Software has little baring on a retailers sales terminal. Once in place, all other digital and mobile coupon distributers con-nect to the retailers POS system via the Infinian Cloud. In do-ing so, the Infinian platform ensures that each retailers digital offer, regardless of the distributer, has the same redemption process, unique codes per user and the redemptions are guaranteed. Lastly, Infinian charges on a Per-Redemption ba-sis, so pay for performance. L

ProlitecProlitec offers brands and marketers a powerful

capability to use the scent of their product to promote it in a multi-sensorial communications program. To-day, many major brands use Prolitec as a cost-effec-

tive means to promote and sample products such as perfumes, detergents, shampoos, fab-ric softeners, gourmet foods and other products where “scent appeal” is needed to win sales.

There are two main multi-sensorial formats in which Prolitec provides the scent dimension: •Point-of-sale air treatment, in which the air in the immediate vicinity of an in-store product display is treated with the scent of the product being displayed. The scent works to enhance the visuals including text, graphics and the packaging of the product itself. The result is a visual and olfactory effect—a multi-sensorial appeal.

•Billboards and advertising panels can be equipped with Prolitec systems to treat the sur-rounding air space with the scent that is being advertised on the billboard. This is particularly effective in high traffic areas such as malls, airports and train and subway stations. This is a multi-sensorial approach that draws customers to the display while simultaneously enhanc-ing the visuals and allowing the prospective customer to “sample” the scent of the product.

Retailers utilize Prolitec’s Ambient Scenting service to create the desired olfactory envi-ronment for their customers in a manner that complements the many other ways—through sight and sound—they offer shopping experiences. Prolitec can be used to enhance Point-of-Sale promotion of products such as fine fragrances, detergents, foods, leather goods and other items. In addition, Prolitec’s technology offers Odor Remediation and Restroom Hy-giene in all public spaces that are subject to high traffic.

Prolitec’s use of Aromatherapy creates an ideal shopping environment and a more pleas-ing consumer experience.

1. Intense Data AnalysisThe companies with the best analytics (whether inhouse or outsourced) will be the survivors and winners in the new

consumer environment created by these laws and regulations.If you aren’t using data and analytics to segment your customers and target your offers, you aren’t managing return

on investment of your marketing campaigns. While ROI is always relevant, the impact of the legislation will make finding the right offer at the right price, and presenting it to the right customer, critical to profitability and legal and regulatory compliance.

Extremely targeted (read as: has to make money) marketing initiatives, designed to attract ONLY those customers the companies deem as “safe AND profitable” are only possible with intense data analysis.

2. Marry your Analytics to your MarketingFor those old enough to remember Watergate and the familiar line, “follow the money”…this new era of regulation has

ushered in a new line, soon to be familiar to marketers, which is—“follow the data.”In the new world of marketing accuracy and efficiency, not following your own data is not only careless, it’s down right

dangerous. What happens if your best customers get a price increase that was intended for a different segment of your customers?

Prior to the CARD Act, the consumer’s response might be a customer service call or complaint, but today, your cus-tomer’s likely reaction is to post a Twitter and/or a Facebook complaint that might go viral. And, if followed by an email to a regulator or legislator, then you are likely to experience a negative ROI on your marketing spend.

Now more than ever, let your data point the way and follow it by marrying your analytics to your marketing strategies and tactics.

3. Learn to do More with LessGet over it, your budget is smaller but your goals and objectives aren’t.

The good news is that the regulations and laws in this new era are forcing us be laser focused in our messages, offers and services. As marketers, finding the right customer for the right product has never been more important. Segmentation

The Five Things Marketers Should Be Doing Right Now (because of the new “CARD” act & the pending financial reform bill)

hy should the best marketing professionals and their organizations be welcoming the “Credit Card Accountability, Responsibility and Disclosure (CARD) Act” of 2009 and the

financial reform bill with open arms and open budgets?

Because opportunity like this doesn’t happen every day.

To help, we’ve compiled the Top Five things Marketers should be doing, right now, because of the CARD Act and the financial reform bill.

by Tom Koeppen, DataCo Solutions, LLC


W


and targeting, support-ed with quantitative data and analysis en-sures that your product and services match your customer appropriately, ensuring their satisfac-tion.

So, yes, our budgets are smaller and yes, pressure will still be there to generate results. But with analysis, seg-mentation and targeting we will be more efficient and effective marketers, generating more results with less budget and a maximized ROI.

4. Listen to your Customers

It’s an old adage but it’s still valid, and will be, even more so in this new era.

Consumers have the capability to uncover in-formation and compare products and services at an ever increasing pace. And under the new laws and regulations they will be better informed and smarter about their choices than ever before.

To win in this new era, marketers must find the products and ser-vices that will empower the customer to “have it their way”, to ensure their satisfaction. The only way to do this is to listen, listen everywhere, all the time…use Facebook, Twitter, blogs, your cus-tomer service center, and your web site to hear what consumers are thinking and posting. And don’t forget your competition—listen to their so-cial network sites as well.

If you aren’t monitoring your brand, compa-ny name or product and services via social me-dia monitoring tools, you are already behind the winners.

The winners are those companies that can identify their customers and target marketing strategies through the use of better customer in-formation, fresh customer insight and opinions and then use this information to offer the best product with the optimal benefits for that “most specifically possible” (highly targeted) best cus-tomer.


5. Churn, Learn and Return

Churn: Churn through your data, intensely, to under-stand your custom-ers’ actions, behav-iors and tendencies. Churn through the CARD Act and the upcoming finan-cial reform bill. You need to, more than ever, understand the new rules, the new do’s and of course, the new don’ts.

Learn: Learn ev-ery day, all the time. Learn what your customers are say-ing, what they are writing, how your product or service is performing, in their eyes. Learn the CARD Act and what your competition is doing. The access to information and data has never been easier or more ro-bust, learning from it? Now that’s what separates the win-ners from the losers.

Return: Need to focus…then try Re-turn, Return and then Return. It’s quite simply…that

simple! Focusing on return will ensure you are seg-menting and targeting, providing the best product or service to the right customer, in the most effi-cient and effective manner. The CARD Act and upcoming financial reform bill is and will change the customer and product landscape, but if you stay focused on return, you will win and so will your customers.

There you have it, the top five things you should be doing now more than ever because of the CARD Act and the pending financial reform bill. Embrace these five things and the hand wringing and worry over the future of marketing under the CARD Act’s regulation will subside. Embrace these five things and you will ensure that you are an informed mar-keter, providing valued products and services, to the right customers, in the most efficient and ef-fective manner.

Remember, you win when your customers win.

The winners are those companies that can identify their customers and target marketing strategies through the use of better customer information, fresh customer insight and opinions and then use this information to offer the best product for that “most specifically possible” best customer.

L

ost loyalty initiatives are missing a key ingredient. Like cakes without sugar, they may look appealing; however, the

omission will only be discovered once they are consumed.

Today most innovations in customer loyalty focus on three major areas:1. Brand and messaging – Use emotion to reinforce purchase de-cisions.2. Core product or service – Provide greater value and function.3. Ancillary service – Make the core product or service a pleasure to use.

Companies will spend significant sums in the hopes that a break-through project will boost customer loyalty. On occasion, the in-vestments are so large that the old adage, “It cost much more to acquire a customer than retain one” reverses itself. These debacles are products of lopsided business cases that provide reasonable cost estimates but no reasonable estimates of cus-tomer reaction.

The missing ingredient is intrinsic customer loyalty. Loosely defined, intrinsic loyalty is the loyalty customers exhibit without positive or negative influence from the company. The underlying notion is that loyalty has as much to do with the customer as with the company. Once the drivers of inherent loyalty are understood, many customer experience decisions become obvious.

Let’s look at three common loyalty segments that loosely re-semble ones seen in the insurance industry.

by Shiv Gupta, Farmers Insurance

What does a customer have to do with loyalty?

Loyalty Segment Intrinsic Loyalty Level Characteristics

Price Seeker Low Price drivenNo frillsLow utility from category

Delight Seeker Med to High Price insensitiveHigh innovationResponds to surprise & delight

Comfort Seeker High Low involvementHigh trustDesires simplicityDesires consistency

1. Price seekers: This group is seeking the least costly product or service. This is primarily due to the low value they place on the category. Offering frills or high touch service will only work for them if the price is very competitive.

2. Delight seekers: This is the segment most customer engage-ment efforts target believing that if you keep them happy, they will stay. These customers are loyal as long as you stay aligned with their evolving needs. They are engaged in the category and aware of the benefits you and your competitors provide. They also have the knowledge and inclination to measure you regularly against the competition.

3. Comfort Seekers: This segment is very loyal but often over-looked. Keeping them happy is relatively easy. They have low in-volvement and high trust. They seek relationships that are simple and consistent. They value innovation, but they don’t want too much of it.

The segment a customer falls into is not only a matter of person-ality but also depends on the category. The same customer may be a delight seeker when it comes to smart phones, a comfort seeker when it comes to dining out and a price seeker when it comes to air travel. Nevertheless, most industries will encounter all three types.

In order to develop an effective loyalty strategy, it is impor-tant to understand which segment(s) you wish to promote. At-

Intrinsic loyalty is the loyalty customers exhibit without positive or negative influence from the company. Once the drivers of inherent loyalty are understood, many customer experience decisions become obvious.


M


What does a customer have to do with loyalty?tempting to devise one loyalty strategy that will ap-peal to all three segments is very difficult. The good news is that there is a profitable loyalty strategy for each of the segments and it maybe possible for your company to develop multiple loyalty strategies - through the use of tiered brands, for example.

Aligning Company Strategy Around Inherent Loyalty Segments

Today, most loyalty ideas focus on the delight seekers. The reason is that the delight seekers best respond to the reciprocation rule, “surprise and de-light them and they will love you.” They are also the first to acknowledge your efforts and willingly provide feedback. However, most companies confuse ease of understanding loyalty drivers with ease of establishing customer loyalty. Keeping de-light seekers is costly because they demand constant innovation. However, they are also the least price sensitive and can provide healthy margins to fund that innovation. They will reward good innovation by becoming strong brand advocates but also punish for poor innovation. A few companies cater to delight seekers ef-fectively and win their loyalty are Apple, Bose and Ben & Jerry’s.

Price seekers are very loyal if you can provide a no frills but reliable product or service at a low price. They may even forego price shopping if, based on experience, they believe that no one else can match your price position. If a company that is capable of squeezing every penny out of your operations and running a lean shop, this customer is ready to reward you. The customer is not looking for a cutting edge customer experience (CE) and will wait for you to adopt new CE ideas once they are well established. By focusing on this segment, your company can do well. The only place where you must innovate is in cost efficiency. Examples of companies that do well with this segmentare Wal-Mart and Southwest Airlines.

The comfort seeker segment is perhaps the most under-ap-preciated and in many industries, the largest segment. They have come to expect a certain experience and consistency is what they are primarily seeking. As a result, they come with high in-

Loyalty Segment Operating Implications Benefits

Price Seeker Cost efficiencyBasic and simple

Low CE investmentLoyal to perceived price

leader

Delight Seeker Continual CE InnovationHigh touch

Greater pricing powerGood customer feedbackPotential brand advocate

Comfort Seeker Moderate innovationConsistent (& good) CE

Learn on competitor’s dime

High intrinsic value

trinsic loyalty. However, trying to elicit high levels of engagement from them may lead to frustration (on your end and theirs). The benefit of targeting this segment is that your customer experi-ence innovation can develop at a moderate pace, allowing you to focus on improving your processes instead of creating new ones. You can always adopt new innovations once your competitors have tested them. For most companies, this should be the most appealing segment. Some companies that do well with this seg-ment are McDonalds, HP & Starbucks.

Determining your loyalty segmentsTo develop a targeted loyalty strategy for your company, you

should first conduct an intrinsic loyalty segmentation study. In the next issue I will outline some basic steps towards creating a powerful loyalty segmentation study that quantifies the dollar value of intrinsic loyalty. Once this is completed, you may be sur-prised how much easier it will be to design and justify your loyalty program.


L

Come hear Shiv speak at the 2010 Loyalty Expo where he explores “How to tell when a customer is just not that into you: Developing a platform for optimization of your engagement strategy”

efore they’re regulated, credit card issuers need to also consider non-mandated, but essential

changes to the structure of their customer loyalty pro-grams. These changes will require a shift from the tra-ditional approach of marketing products to consumers based on product characteristics and instead shift to providing services and products that support the way in which consumers choose to live. And that doesn’t mean inundating consumers with the latest “lifestyle” credit card product that’s co-branded with a theme park, elec-tronics manufacturer or music distributor. It means final-ly taking a customer centric view of the “on-the-go, im-mediate satisfaction, brand promiscuous” world of today.

The financial services space has come under heavy scrutiny over the past 18 months. New consumer fair-ness regulations have been enacted, forcing disclosure and radical changes for fi-nancial services institutions. For instance, the Credit Card Accountability Responsibility and Disclosure Act of 2009 introduced many consumer protection initiatives, such as: Prior notice of rate increases; Limits on fees and interest charges; Payoff timing disclosure and many more.

The effects this new legislation will have on financial institutions’ balance sheets are up for debate. However, what is apparent is the environmental shift away from vague customer awareness layered in fine print to a con-sumer perspective that is more transparent.

by Carlos Dunlap, Kobie Marketing

The value of a change like this isn’t always initially ap-parent and may be only the beginning of a larger move-ment. Yet, the early trends indicate that a mandated move-ment towards consumer disclosure and protection will continue for at least the next three years.

With the above in mind, now is the time for card issu-ers to shift focus towards a payment device that supports how consumers want to live and interact with the world. A credit card that not only allows them to make transac-tions, but that makes life easier. This life-enabling device must provide consumers with the benefits and services that are expansive enough to cross many boundaries. It’s

the dynamic functionality required to make them use your product over the other two cards in their wallets, as well as preference over the additional 4 cards in their sock drawer and other pay-ment methods.

What the financial ser-vices industry and credit card issuers are facing these

days is hardly unique. It’s a predicament that airlines, the pioneers of consumer loyalty programs, found themselves in more than 10 years ago—an extraordinarily commod-itized product that forced industry leaders to innovate in order to distinguish themselves from the competition. If it was good enough for the “Godfathers” of modern day loyalty marketing, then chances are it’s the right approach for credit card issuers today. In fact, it’s overdue.

What is apparent is the environmental shift away from vague customer awareness layered in fine print to a consumer perspective that

is more transparent.

A Time for Change




B

Card issuers, this is your time. And here are the four things you must do to evolve your customer loyalty strategy to drive the most appropriate experience for each segment and optimize profits.

Differentiate the Customer ExperienceImplementing a variable program structure beyond standard,

gold, platinum and diamond will optimize the success of a loyalty strategy. Those traditional classifications are product centric and designed for the ease and convenience of the financial institution.

As airline frequent flyer programs increased in size and popu-larity, they were continually enhanced to include tiers based on customer usage and value. The first segments were gold and silver, followed by platinum and more elevated designations. The tier-ing strategy was just the beginning. It evolved into a more precise delivery of the customer experience. Based on customer value, as indicated by their tier designation, relevant soft benefits where in-troduced, including: first-class upgrades, special 800#s, privileged re-bookings, express security lines and priority boarding.

For issuers, a customer centric approach begins with talking to, treating and rewarding customers based on their unique attributes. This doesn’t mean an exhausted 1:1 approach. It requires a founda-tional segmentation to differentiate the customer experience based on how cardholders use the products, make their transaction deci-sions and the value they provide to the organization. The airline in-dustry was able to implement the tiered structure from travel pur-chases and preferences. Card issuers have considerably more data to access, analyze and implement to create superior data driven strategies that are more appropriate and appealing to cardholders.

Financial institutions also have additional products and servic-es that can provide insight into customer lifestyles, product usage, needs and attitudes. The Relationship banking approach continues to provide untapped opportunity for nearly all banks, investment brokers and insurance companies. By pooling the knowledge of customers across multiple product lines, organizations can more effectively drive customer understanding, engagement, responsive-ness, redemptions and of course—profitability.

RBC Bank found great success in allowing point pooling across their products and within households. Its strategy significantly in-creased program engagement, transaction value and redemptions—leading to a much healthier program for its members and for the organization.

Move the Brand Beyond Plastic Improving the customer experi-

ence is essential because it’s difficult to be loyal to a piece of plastic. Be-come more than a payment vehicle and provide greater value to custom-ers’ lifestyles. Their loyalty will be earned and incremental profits will be gained by becoming more essential to the way customers live.

Although the card may serve as the payment device, the program website can function as a frequent destination spot, providing relevant lifestyle information, as well as tradi-tional program content. By providing additional content, a program sponsor can deliver more value to cardholders while driving greater affinity towards its brand.

The next area of expansion for any program website is to allow non-bank content or modules, similar to a Google or Yahoo! home page. Allow program members to customize their pages or even allow the program site to be loaded as a module in Google and Yahoo! Meet them where they live and become more relevant.

Branches are foundational, but not essential to most customers and cer-tainly not to cardholders. Therefore, introduce events and activities that drive engagement with your brand in the branches and with trained per-sonnel who are prepared and under-stand how to deliver the appropriate experience to each customer. Events should include motivational speakers,

It’s time for a real change. You have an extraordinary opportunity to shift your focus towards improving the customer experience by creating added value for your customers, leading to increased engagement and affinity towards your brand.



business/individual networking events, job fairs, kids’ birthday parties and small business seminars. Further-more, branch personnel, as well as call center reps, re-quire both performance metrics and incentives to be fully engaged in the customer experience strategy.

Moving to mobile payments is another strategy that’s being tested around the world and will soon have real ap-plication in the United States. Therefore, it’s time to take the payment vehicle to the next level by forming alliances with handset manufactures, wireless providers and mo-bile processors to ensure relevancy in the new world.

Focus on Program Growth, Not CostsUse the abundance of data to derive customer knowl-

edge that allows you to engage customers in the way they live today. Expand beyond your brand. Many issuers to-day may have an online mall or merchant-funded network, geared towards increasing card transactions. Instead, change the perspective to a customer POV and develop alliances with many product and service providers who can provided enhanced value for cardholders or discounts for being a cardholder, without the need for a transaction.

For airlines, the natural alliances were hotels and car rental companies. For financial institutions, the universe is much broader and may include: health clubs, chambers of commerce, non-for profits, cultural organizations, pro-fessional/recreational networks and support groups.

By better engaging cardholders based on the value provided and by adding convenience to their lives, issuers will drive loyalty to the brand and not just to the loyalty program. The incremental gain in loyalty translates into profits for the issuer and reduces the need to continually erode value out of the program.

Transform The Loyalty Strategy Into A Profit Center

Move your loyalty program away from a marketing expenditure and transform it into a profit-generating LOB. Traditionally, this is accomplished by measuring the incremental lift in transaction revenues and profits. However, going forward, issuers need to focus on brand-ing their currency and selling it to partners who enhance the brand—using it for external promotions and employee incentives.

For the airline industry, profitability resulted from program expansions that included a more diverse set of partners and sales of miles currency. Airlines first sold their miles to telecomm and credit card issuers, but then expanded their network to include multiple industries with a desire to purchase promotion currency. The strat-egy behind frequent flyer programs was forever changed from a marketing expense into a revenue and profit gen-erating line of business. Frequent flyer programs began to be viewed as assets to the airlines and in many cases, held the distinction of being the most profitable line item on the company’s balance sheet.

Issuers, it’s time for a real change. You have an ex-traordinary opportunity to shift your focus towards im-proving the customer experience by creating added value for your customers, leading to increased engagement and affinity towards your brand. All elements required are in place: customer data, technology and opportunity. Deter-mine your strategy and commit to your customers.


A Time for Change (continued)

Use the abundance of data

to derive customer knowledge that allows

you to engage customers in the way they live

today. Expand beyond your

brand.

L


The Human Connection® is about the people who affect your business success:

employees, channel partners and customers.

Solving business challenges with people solutions

MarketingInnovators.com 800.543.7373

...referring someone to your brand. ...a trusted partner. ...a crucial measure of success. ...The Human Connection.®

Loyalty is...

• Sales Incentives• Employee Engagement• Channel Performance• Customer Loyalty• Recognition

he downturn economy has led many organizations and employees to question loyalty issues in the work-

place. Perhaps the better question is, “Should there be loy-alty?”

Change is inevitable in today’s fast moving global econ-omy and successful leaders need to be continually seeking improvements in processes and procedures to maximize efficiency and effectiveness across their organization. True leaders and managers initiate and stimulate change. Smart executives recognize that change in fact sustains an organi-zation helping it grow.

This is true across all industries, with particular empha-sis on the medical, financial services and manufacturing sectors. With the drastic changes in these sectors, loyalty is becoming more important than ever before. Why? Em-ployee loyalty drives creativity, innovation, and productivity that result in improved performance, and profitability.

The foundation of loyalty is trust, and trust is the founda-tion of all relationships. Leaders and managers can establish trust by integrating a combination of:

•Congruency of words and deeds, •Communications, •Respecting people’s ideas, •Following through on commitments, •Recognizing both strengths of the organization and areas for development, and

•Willingness to admit mistakes.

There are five essential strategies organizations can im-plement to create and foster increased loyalty among em-ployees, customers and other stakeholders.

These five essential strategies reflect a structured ap-proach for developing individuals’ commitment to the or-ganization’s vision and strategy. These are effective on any scale, from developing greater loyalty between a single manager and his/her direct reports to implementing a glob-al change process within a major multinational corporation.

Creating Loyalty Inside, Outside a Company: Five Strategies

Strategy 1: Engage employees in discussion The current corporate culture has the potential to be

overwhelmed with employee anxiety and fear. It is critical for management to be committed to creating and sustain-ing a meaningful open conversation with employees, via focus groups or informal discussions. Managers at every level, starting from the top, should actively challenge and encourage staff to contribute thoughts, ideas and creative solutions to improve their jobs, their departments and the overall operation of the organization. This is especially true during periods of restructuring and change.

As part of this process, organizations should ask em-ployees about their level of pride and commitment to the organization. Employees need to actively contribute to a discussion that focuses on:

•Top three strengths of the organization•Three areas in need of improvement•How employees can contribute to the overall growth, profitability and customer satisfaction lev-els

As best stated by Harold McAlindon, author of the Little Book of Big Ideas, “The quality of an organization can never exceed the quality of minds that make it up.”

Strategy 2: Create focus and shared vision Business leaders and managers need to to create focus

Employee loyalty drives creativity, innovation, and productivity that results in improved performance, and profitability.


T

by Dianne Durkin, The Loyalty Factor


and strategy through clear, concise and consistent shared visions, values and po-sitioning for the organization—especially at times of great change. Strategies must continually be reviewed to ensure every-one in the organization is aligned with those strategies.

In difficult times, communications becomes even more crucial. Team meet-ings, emails, teleconferences, video con-ferences, and other sources of commu-nications are of utmost importance. It is

critical to reach all employees to convey changes in direction or strategy.

Strategy 3: Communicate, communicate, communicate

Sharing the vision, values and posi-tioning of the organization is most criti-cal when the workplace seems particu-larly volatile and unstable. Employees can elevate the vision and strategies set forth by the management—hence it is important that an in-depth understand-ing of company goals and standards are shared with employees across the orga-nization.

As The Great Place to Work Institute co-founder Robert Levering suggested,

“Perks are nice, but employees are look-

ing for something more basic. They want to be told the truth, especially if the news is bad. They also want, corny as it sounds, to feel they make a difference and to be given the chance to grow.”

Strategy 4: Empower individuals to solve business issues

Individual contributors know exactly what has to be done to improve efficien-cy or effectiveness in an organization or department. Leaders and managers can

empower them to formulate the solution and allow them to share it with manage-ment.

Forming employee teams to explore and work on major business issues will provide creative and innovative thinking that will surpass management’s expec-tations.

Strategy 5: Continuous evalua-tion and feedback

Sustaining market share and main-taining the best competitive advantage requires continuous improvement. Re-peating these steps will create a compet-itive edge and help individuals feel they are continually growing and improving.

Connie Glaser of the Atlanta Busi-

ness Chronicle said it well: “When the going gets tough, people tend to revert to the steadfastness and predictability of traditional values: trust, loyalty and meaningful personal relationships.”

It is important to remember that loyalty does exist in the workplace, provided employees feel they are cared for and have an opportunity to learn and grow. Management can achieve this by listen-ing to employee input, engaging them

in solving business issues, and clearly and consistently communicating future strategies and major changes.

When employees are loyal to their company, their managers, their col-leagues and their work, the quality of their work, the product or service they create are better and is reflected in the way they deal with customers. Happy employees offer better service and products to customers which in turn results in loyalty.

Employees and customers together build a company’s brand. Employee loyalty builds customer loyalty, which builds brand loyalty. It’s as simple—and as difficult—as that.


Managers at every level, starting from the top, should actively challenge and encourage staff to

contribute thoughts, ideas and creative solutions to improve their jobs, their departments and the

overall operation of the organization.

L

oice of the customer…Engagement…Loyalty. What do these buzzwords mean? How do we use them to drive value? Where are the best practices?

These often-used terms have connotative and denotative meanings that can be quite different depending on who uses them and how they are used. Loyalty 360 - The Loyalty Marketer’s Association continues to see uncertainty about loyalty, engagement, and voice of the customer. Questions posed by our members and partners about these buzzwords keep coming fast and furiously.

The confusion indicates that in this challenging economic environment, the focus on loyalty and engagement is becoming ever more important. Customers, clients, employers, brands and channel partners believe that voice of the customer, Web 3.0, the Groundswell, etc. can give them a well-needed competitive edge. Yet, they don’t know how to execute these initia-tives effectively. They’re looking for best practice examples of groups creating engagement, excitement, and commitment to help the answer the overriding question: HOW?

Voice of the Customer—What Does That Mean for Loyalty & Engagement?by Mark Johnson, Loyalty 360

V



On one hand, brands and consumer package good companies tell us that they want to re-engage their customers and have more direct communica-tion with them, and that social, mobile and emerg-ing media is helping them to do this. On the other, they want to have better and more actionable data results. They want to see the true 360° view of the customer, yet realize that they are not privy to data from other sources—such as channel partners, merchants and distribution channels—that allow them to complete this circle. Getting the true voice of the customer doesn’t just mean using social, emerging and mobile media. It also means focusing on traditional media channels such as the call cen-ter, direct mail response, customer loyalty program, surveys, etc.

Merchants, banks, hotels, restaurants, travel and entertainment companies pose to us a litany of the same questions. These entities want to work to-gether and collaborate in a manner we have not wit-nessed in quite some time. Capturing a 360° view of the customer means knowing what Jack Jones is spending at Applebee’s, on Delta, at JC Penney, and at 5/3 Bank. They want this level of broad in-sight because they know it will enable them to make more effective communication decisions and tailor the form, factor, and fashion of these timely com-munication in order to increase its effectiveness.

But they continue to ask: HOW? How do I get this information? How can I create loyalty? How can I create engagement? How can I make the insight I have more actionable? How do I drive the behavior that I need to drive? How do I change the mindset within my organization to be more accommodating and amenable to this new transition?

The answer is two-fold: 1. Listen. Listen, not in a lip service fashion, but lis-ten with the belief that there is wisdom in crowds. Listen with the purpose that small is the new big. One blogger, one online community not addressed can have serious impacts on a brand. Being truly committed to listening to and engaging customers requires a corporate mandate guided by a visionary leader who compels the organization to look at their actions and address these questions honestly:

•When companies say they are committed to voice of the customer, yet they are only focused on call center responses, is that a true voice of the customer?

•Or when companies say they are committed to voice of the customer, yet they are only focused on social, mobile and emerging media respons-es, is that a true voice of the customer?

•Or when companies say they are committed to voice of the customer, yet they only use third party opt-in data, is that a true voice of the cus-tomer?

2. React. Once you listen you need to react with the purpose to engage and empower the dialogue with your audience. There’s no doubt the pendulum has

swung from the brand to the client. For every success story that becomes lore within this new “social community” and “engage-ment marketing” space, we hear five where the “visionary” that sold them on the new technology that would revolutionize their brand, their company, their product, their offering has failed. That’s because it comes down to commitment and a realization that the world of marketing is going to be more dynamic now than it has ever been. Customers, clients, employees, brand partici-pants want control. Yet control means engaging in an interactive dialogue with the brand and brand participants. It means making the input for the various channels concise, relevant, interest and actionable.

I was recently at a loyalty conference where one of the speak-ers purported that we should treat our “best customer” with the best rewards and engagement. I thought to myself, what is your best customer? How do you define that customer and what are the best rewards and engagement for them? There’s no place for this type of old school thinking in this new media market of en-gagement, loyalty and voice of the customer. I challenge you to listen—to truly listen—to react, and to engage.


It comes down to commitment and a realization that the world of marketing is going to be more dynamic now than it has ever been. Customers, clients, employees, brand participants want control. Yet control means engaging in an interactive dialogue with the brand and brand participants.

L

ULTA Beautyloyalty program profile

Enrollment ExperienceULTA offers two rewards programs online—ULTAmate Rewards

and The Club at ULTA—enter your ZIP Code and the program di-rects you to a program available in your area and both are free. In many ZIP Code, both choices may be available since several stores can be in an area. Registration is easy and quick—since I had an ULTA loyalty card already, a pop-up offered to print my new ULTA-mate Rewards card with my existing account number. A seamless experience: adding email addresses and confirming street address-es allows for reward continuity benefits.

Register for email alerts to receive an extra special welcome!

Program BasicsULTAmate Rewards

Membership is free and with orders of $50, shipping is free. Three free samples are included in all online orders.

Earn 3 points per $1 spent in-store or online. Reward certif-icates can be used in-store merchandise or online. Earn points faster with special offers for ULTAmate Rewards members.

In addition, Members can go platinum & receive exclusive platinum member rewards.

Spend $300 or more annually? MORE BONUS POINTS EVENTS—DOUBLE, TRIPLE, 5X THE POINTS! Receive invita-tions to special events and special salon offers.

The Club at ULTAMembership is free and you can earn Reward Certificates

four times per year based on specified period spending. Re-ward Certificates are good for FREE beauty products or salon services which are redeemed in store.

You’ll also receive valuable coupons through the year and special Club member benefits.

Reward Certificates start with a spending level of $50, $100, $150, $200, $250 and $300…Each spending level’s re-ward offers a variety of beauty products such as nail lacquer or 10 oz. ULTA shampoo or conditioner at the $50 level. The selections increase in retail value as the reward levels increase, with an assumption of $5.00 retail value for a $50 reward level. Each award level offers a selection of brand name and ULTA private label merchandise. A Salon service is offered at the $250 and $300 level. Top level reward assumes a retail value of $45 for any fragrance selection.

The Retail ExperienceULTA stores are spacious and engaging and their

sales associates are friendly, helpful and inquire about a purchaser’s Club and/or membership status with every purchase. The merchandise array is extensive, with national brands and private label, particularly in body lotions, washes and bath products. Frangrance selections include popular brands such as Ralph Lau-ren, Juicy Couture, Philosophy and classics such as Chanel and Estee Lauder. Men’s fragrances are just as extensive with brands such as Tommy Hilfiger, Dolce & Gabbana and Giorgio Armani.

Professional Styling products feature more than 35 brands along with Hot Tools styling products and curling irons complement ULTA’s salon services.

Gift card purchases count towards ULTAmate Rewards and with upcoming Mothers’ Day, Fathers’ Day and a raft of Graduation events, reward levels can rack up…

THE VERDICT

Two Thumbs Up! With great merchandise, friendly associates and gift cards, it’s easy and rewarding to get to the next reward level. ULTA places $5 off a $10 purchase through bind-in coupons in specially targeted magazines—and as a subscriber, it’s a reminder for me to get out and do some shopping! After all, I can always use another scented candle and who doesn’t like getting favorite mer-chandise as a reward? Give it a try…I’m a fan!!



L

June 6 - 8, 2010 • OMNI CHAMPIONSGATE • ORLANDO, FL

high-touch, high-tech, high-impact: building holistic relationships that engender customer & employee loyalty

2010 EXPO PREVIEW

loyalty expo 2010 preview


Interested in our

Read biographies, explore session and workshop topics, and register—all at loyaltyexpo.com!

Speakers & Sponsors?

HIGH-TOUCH, HIGH-TECH, HIGH-IMPACT: How to Build Holistic Relationships that Drive

Customer, Employee LoyaltyLoyalty Expo 2010 is a one-of-a-kind opportunity for leaders from companies worldwide to gain a better understanding of how best to create 360° experiences that engage customers, employees, partners—and deliver bottom line results.

Customers and employees are multi-dimensional, so the ways in which companies build strong, interactive relationships with them must be as well. Loyalty Expo 2010 is bringing together a slate of best-in-class speakers and partners to provide attendees with the insights, education, and proven tools they need to build the strong bonds and emotional connections that drive loyalty and deliver long term success.

The thought-provoking agenda filled with keynotes, interactive sessions from Procter & Gamble, Delta, Hilton Hotels, Best Buy, Farmer’s Insurance, Coca-Cola, Kroger, GNC, SunTrust Bank and many others, and peer group discussions will drill down to teach executives how to implement an impactful voice of the customer, high tech/high touch initiative to build and sustain strong relationships with their customers, employees and partners.

Loyalty Expo 2010 will also feature a series of peer discussions groups during which marketing executives can explore together many of the challenges and opportunities facing organizations today.

The next few pages are a preview of what you’ll learn at the 2010 Loyalty Expo.



Hundreds of companies have customers who admire them, but only an elite few have true advocates—passionate, vocal, loyal fans—who tell the stories of their experiences and about how much they “love” them.

This session takes you “behind the scenes” of the decision making that goes on inside beloved companies. Through a series of real life examples, you will discover the five decisions common to companies that customers and employees call “beloved.” This session will do much more than rile you up! As part of your transformation journey, you will learn how to make decisions that yield outcomes that create financial prosperity and prosperity of the human spirit.

Beyond learning about what others do, this session will provide you a process for evaluating how you make decisions—a mirror to hold up to your own personal decisions and to the decisions of your operation. As a result, you will see how far or close you are to making decisions like the beloved and prosperous companies.

Discover the following to sustain growth and profit through customer devotion:

•Do your decisions today earn your company beloved status? If so, how can you sustain it? If not, what changes do you need to make?

•Do you have a reciprocal relationship of trust with your customers? With your employees?

•What does it take to provide clarity of purpose for those who serve customers?

•How do customers and employees describe your “company personality?”

•How do you let customers’ lives inform the actions and behaviors of your operation?

•When mistakes happen, how can you apologize swiftly and with humility?

Filled with as many suggested actions as anecdotes, this session demystifies and creates clarity on the road less traveled by beloved companies. It gives you a path to follow in their footsteps—a path that is right for you, for your company, and for your people.

The Five Decisions of Beloved & Prosperous Companies

2010 LOYALTY EXPO KEYNOTE SESSION

How to become a company customers love and can’t live without

Jeanne Bliss is not an evangelist or observer of companies. She’s been inside them for twenty-five years, arm wrestling them on behalf of their customer!

As “Chief Customer Zealot” for five large U.S. market leaders, Jeanne’s fought valiantly to get the customer on the strategic agenda, redirecting priorities and creating transformational changes to the brands’ customer experience. She has driven achievement of 95 percent loyalty rates, changing customer experiences across 50,000-person organizations…and convincing even the staunchest curmudgeons to help push the customer rock up the hill.

Jeanne BlissManaging Partner,Customer Bliss



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. Properly configured, consumer engagement is a metric that has been proven to be the most reliable and correlated to sales. While the value of media entities (and combinations thereof) can always be defined by their size of the audience or their demographics, they cannot be uniquely di!erentiated unless we examine the levels of engagement they engender.

Brand Keys will present Loyalty Expo attendees with a real consumer-centric, engagement-based holistic measure for cross media planning.

Contemporary Engagement Measurement: Using Engagement to Measure Cross-Media Marketing

Robert Passiko!

Founder & President,Brand Keys

Jim Harris

CEO,Wall Street Journal O"ce Network

Without a framework to create, innovate, and ensure a unified customer experience, your company’s best intentions in marketing, loyalty programs, employee involvement and customer service collapse. Poor customer experiences undermine those investments, and cost companies almost $100 billion dollars annually in lost purchases and defections to the competition. Who’s the champion of the Customer in your organization, and how does your work influence the Experience?

Join Michael Hemsey, President of Kobie Marketing, to understand how brand leaders in a variety of industries holistically view and manage the customer experience—and understand, design, and continuously invest in positive experiences to drive sales, loyalty, and market growth.

These real-life examples, fom Hilton and others, will help you create your own customer experience framework and develop best practices for your company, and your customers.

The Best of the Best! Best Customer Experience, Best Examples in the Marketplace

Michael Hemsey

President,Kobie Marketing

Loyalty is not just some marketing theory. Nor is it the sum total of today’s ubiquitous points schemes. It is a real engine of both emotional and rational aspect that fuels consumer engagement. It is a leading-indicator of customer behavior and—if managed properly—a leading-indicator of sales and profitability. Its applications for planning—going well-beyond demographics, past behavior, and satisfaction, is critical if brands wish to prosper. This session has—unlike the usual industry presentation suspects—a real, in-market validity study attached that reports out real ROI and proves the efficacy of how we define ‘loyalty,’ how we leverage it for brands, and how we implement it.

-Robert Passikoff, Contemporary Engagement Measurement

knowledge. delivery. results.how motivat ing.

Let us motivate you.At A! nion Loyalty Group (ALG), we o" er ways to drive pro# table 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 pro# tability goals. We believe loyalty should be a business strategy with a positive ROI. And our proven loyalty solutions repeatedly result in pro# tability for our clients.

Visit us at www.a! nionloyalty.com/loyalty or call 800.622.4863 to learn more about our loyalty marketing services and how we can help create loyalty between you and your customers.

to le arn more about our loyalty



Powerful market dynamics are bringing us to an inflection point in customer engagement and loyalty marketing:

•Traditional rewards programs are becoming commoditized•Customers have more choices than ever•Retailers are more sensitive than ever about costs of payment acceptance•Technology capabilities surrounding the point of purchase have rapidly grown

The market is ripe for extending loyalty to the point of sale—the “last mile” in customer engagement, and a powerful opportunity to create lasting value where there was once only cost. Point-of-sale loyalty programs create a direct point of engagement to customers creating real value for Card Issuers/Processors, Retailers and Customers:

Card Issuers Want:•Increase customer spend/transaction volume•Di!erentiate o!ering/product from competitive programs•Enhance value proposition for interchange/merchant service fees

Customers Want:•Relevant and meaningful interactions and promotional o!ers•Ease of use and participation•On-Demand reward and recognition

Retailers Want:•Greater insights on customer buying behaviors and preferences•Tangible results from programs •Lower costs and more value for their customers•Uninterrupted service performance

Jake Sterling, Financial Services and Point-of-Sale technology expert, will lead an interactive discussion about point of sale Loyalty and the value it creates. Alpha Bank will discuss their point-of-sale loyalty program “Bonus”; providing campaign examples and results.

Point-of-Sale Loyalty: “The Last Mile in Loyalty”

Jake Sterling

Division Vice President Payment Technology,Maritz Real-Time Rewards

Philippe Bontemps

Vice President Business Development, Welcome Real-Time

Jonathan Silver

President and CEO, A"nity Solutions

Sandra Gudat

President and CEO, Customer Communications Group

Martha Kanner

Point of Sale Loyalty Product Manager, Alpha Bank Greece



The loyalty space is becoming increasingly crowded, but finding a way to cut through that clutter with a program that partners with cause-driven brands, rewards people for doing good and

provides economic stimulus for all involved will help grow and retain membership, attract partners with common goals and ultimately shift consumer behavior.

•The RecycleBank Story

•Loyalty Program with Purpose Brands Enjoy Significant Public Relations

•Loyalty Industry: Do Our Norms from the Past Present the Best Playbook for the Future?

•Major decisions driven primarily by contingent liability management limit program’s potential

•Number partners; value derived; engagement; and growth rates are restricted

•Loyalty’s New Paradigm: Changing consumer behavior to benefit the Loyalty Program Operator, Key Partners, and a Purpose at the same time may unlock new potential

•Results from the New Paradigm: Unparalleled program growth, unprecedented consumer engagement, economic stimulus for all stakeholders and a better world to live in

•Case Study: Partnering for a Cause

Doing Well By Doing Good

Morely Ivers

Chief Rewards O"cer,RecycleBank

The Pampers Gifts to Grow program has successfully developed a consumer data base of over 6MM customers. Furthermore this program has been able to generate a positive ROI based on fully loaded costs. It has allowed the Pampers brand to drive BOTH sales and the bottom line without resorting to coupon wars with their competitors. The Gifts to Grow program is allowing Pampers to have an informed and meaningful, one-to-one dialogue with their customers and the results are improved customer retention and incremental sales.

What the audience will learn:

•What kinds of brands and scale are necessary to make an initiative like this work for them

•How to build the value proposition and still remain profitable

•How to drive for results (retention and increase customer purchases)

•Pitfalls to avoid

The Ultimate Integrated Marketing: Bridging the Gap between Brand, Digital and In-Store

Abby DrydenAssistant Brand Manager for Baby Care, Procter & Gamble

Suzy Cox

VP Group Account Director, Carlson Marketing Worldwide

RecycleBank has taken fundamental loyalty and reward strategies to a new level by changing consumer behavior, socially, towards environmentally preferred actions. Loyalty Expo is the ideal venue for RecycleBank to share this new loyalty industry paradigm it has created with other thought leaders and potential program partners—a model where over 2000 RecycleBank Reward Partners are actively benefiting from the increased brand value and revenue driven through their association with The RecycleBank Rewards Program.


Marketing professionals need a new approach to loyalty—one that focuses on generating lasting customer attitudes and behaviors toward their brand and its products and services. But old thinking and rational, transactional-based programs alone won’t get that kind of loyalty. Through a deep understanding of people, marketers can tap into the way our minds and emotions work, and create programs based on mutual gain and true engagement. During this energetic and interactive workshop, you’ll learn about:

•The progression from transactional and rational relationships with your customers to ones based on “irrational loyalty”

•Key principles of human behavior like attention, memory, fairness, fun and goal-pursuit and how understanding these principles enables you to engage more thoroughly and personally with your customers

•Real world examples of how companies create irrationally loyal relationships

•Ways you can adapt your own program to utilize some of these principles through interactive discussions

While everyone is looking for the latest and greatest silver bullet to drive customer engagement and loyalty, the ones that are truly lasting and most impactful are those that are brand-driven, customer-relevant and distinctive. This session will take a look at best practices of how brands connect with customers to drive engagement across channels and how that pays o! in terms of results. Real world examples will include a variety of industries including travel and hospitality, retail, restaurants and telecommunications. The session will feature engagement strategies and tactics across channels, both within and outside of loyalty programs and also include how leading brands are using social media to engage customers.

We will explore engagement initiatives in areas such as:

•Customer experience•Loyalty program enrollment, communications, rewards and elite tiers•Research and data collection•Integrated campaigns

Irrationally Loyal: The Neuroscience of Engagement

Brand-Driven Engagement: Strategies, Real World Examples & Measures via Loyalty Marketing & Beyond

2010 LOYALTY EXPO WORKSHOP

As a loyalty marketing expert, Barry’s focus is in the area of integrated communications strategies that drive both brand engagement and increased customer lifetime value.

Barry KirkDirector of Loyalty Strategy,Maritz

Phil Rubin

CEO, rDialogue;

Featuring Natalie White, VP Customer Marketing and Relationships, Kimpton Hotels and Restaurants

Build true loyalty by buildingbetter relationships.

A more strategic, data driven approach can help you move to the next level of loyalty. With genuine insights into the needs and expectations of your customers, you can talk with, treat, and reward different customers in unique ways. This is what we call true loyalty.

Bring this approach to life with comprehensive services from Maritz. It's our business to understand what matters most to people. Enable them with knowledge and tools. And motivate them to change behaviors. To start working on your relationships, stop by booth #100 at the Loyalty Expo.

Ready to learn more now? Visit maritz.com or call (877) 4 MARITZ.

Time and space are running out! Register now for the 2010

june 6 - 8, 2010

www.loyaltyexpo.com

register now at www.loyaltyexpo.com

OMNI CHAMPIONS GATE

THE CONFERENCE BRINGING PEOPLE TOGETHER TO

&CLIENT RELATIONSHIPSfocus on maximizing customer, employee,

ORLANDO, FLORIDA

4120 Dumont StCincinnati, OH 45226

PRSRT STD

U.S. POSTAGE

CAROL STREAM, IL

PERMIT No. 475

PAID

Documents

Loyalty Management Sex Appeal Loyalty Based on Our Sex