You are on page 1of 64

VOLUME 5 NUMBER 3

Third Quarter 2013

IN THIS ISSUE

J.D. Power: The Voice Behind Voice of the Customer

Engaged Customer is at the Center of New GM Business Model With Trane Its All about the Customer Social Media Catapults Wholly Guacamole to New Horizons:
A Social Media Case Study 2013 ENGAGEMENT & EXPERIENCE EXPO

ADVANCING LOYALTY

ADVANCING COMMERCE

Getting customers to buy is easy when you know how they spend.

Truaxis
A MasterCard Company

Our transaction analytics helps see a true picture of consumer behavior.


Truth is, the transaction data collected from participating financial institutions is the most accurate way to predict consumer preference. Its at the heart of our loyalty platform, Truaxis, which uses industry-leading technology to deliver personalized rewards and money-saving offers to the debit and credit card customers of these financial institutions. Take advantage of this new channel to drive incremental business from your existing customers, and to help find new ones all in a cost-effective, turn-key solution. After all, its whats inside that counts. Find out how to reach more customers at truaxis.com.
MasterCard and the MasterCard Brand Mark are registered trademarks of MasterCard International Incorporated. 2013 MasterCard. All rights reserved.

In this Issue...
THIRD QUARTER 2013 VOLUME 5 NUMBER 3 WWW.LOYALTY360.ORG

FEATURES

20
How to Increase Brand Loyalty Through Pinterest Marketing
By Sharad Verma

LOYALTY FORUM: IN EVERY ISSUE


6 Letter from the Editor 7 Loyalty 360 on the Web 8 Your Voice 11  Behind the Brand
Eric V. Holtzclaw, Laddering Works

14  360 Insights: The Challenge of Data


Mark Johnson, Loyalty 360

16 By the Numbers: Employee Engagement 18 Q & A: Ask the Experts

22
J.D. Power: The Voice Behind Voice of the Customer
Interview with J.D. Power

30  Behind the Brand


Dave Mangano, Siemens Industry, Inc.

34 Loyalty Innovation 36 Trending Now 50 Loyalty Reads

Engagement Expo Preview

60

26
Social Media Catapults Wholly Guacamole to New Horizons: A Social Media Case Study
Jim Tierney | Loyalty 360

2013

November 5-7 | Westin Galleria Dallas, Texas

register now!
Visit EngagementExpo.com

Loyalty Management THIRD QUARTER 2013

In this Issue...
THIRD QUARTER 2013 VOLUME 5 NUMBER 3 WWW.LOYALTY360.ORG

TECHNOLOGY, TRENDS & REWARDS


38  The 4 Ps of Customer Experience Chuck Christianson | Connexions Loyalty 40  Customer-Centricity: an FI Imperative in a Competitive Banking Universe Rami El-Zeini | Aimia 42  Engaged Customer is at the Center of New GM Business Model Jim Tierney | Loyalty 360 46  Re-Imagining Membership/Loyalty for Sports and Entertainment Venues Larry Witherspoon | Alvarado

BEST BUSINESS PRACTICES


48  The Key to Personalizing Each Customers Loyalty Experience? Acting on Business Intelligence Michael Hemsey | Kobie Marketing 52  Making Shopper Iinsights Stick Milen Mahadevan | dunnhumbyUSA 54  How To Deepen Customer Loyalty with Smarter Video Kelly Ford | Sunday Sky 56 With Trane Its All about the Customer Jim Tierney | Loyalty 360

42
Engaged Customer is at the Center of New GM Business Model
Loyalty Management Editorial & Production Team
Erin Raese - Editor in Chief Mark Johnson - Contributing Editor Christopher Schatzman - Design Director Jim Tierney - Senior Writer Crescent Printing Company - Print Production

How To Deepen Customer Loyalty with Smarter Video

54 56

Contacts
Article Submissions & Advertising: Erin Raese erinraese@loyalty360.org or 513.800.0360, ext. 210

With Trane Its All about the Customer

2013 Loyalty 360, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed 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 authors 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 interpretations thereof. The opinions expressed herein are subject to change without notice.

Loyalty Management THIRD QUARTER 2013

FROM THE EDITOR In preparing for this years Engagement & Experience Expo, weve had the pleasure of speaking with Dave Power, founder of J.D. Power & Associates. Aside from the thrill of speaking to one my idols, his story is truly amazing. From his vision and power of observation, to his persistence and dedication, Power offers a fascinating perspective on the imperative of listening to the voice of your customer to drive a successful, profitable business. It took Dave Power 10 years of research practice and information sharing with organizations to finally reach a C-suite audience. Since then, more and more c-level executives are getting involved and listening to their customers; yet just as many are not listening or not acting effectively on the information to create the necessary positive customer experiences to drive strong engagement and, ultimately, long-term loyalty. (See page 22 for more from Dave Power). In this issue and at the upcoming Engagement & Experience Expo, organizations like Siemens, GM, Trane, Liberty Mutual, Fresherized Foods, and Fossil are sharing how theyre changing what they do to incorporate customer feedback to enhance their products, services, engagement, and their customers experiences. On page 42, Jim Moloney, General Director, Customer and Relationship Services for General Motors Company, shares a recent, significant shift in GMs direction to focus on the customer. . We were running contact centers as cost driven complaint departments. Now its much more centered around an engagement opportunity.. Sean Otto, Senior Customer Satisfaction Analyst for Trane, shares how important the customer experience is in a B2B environment (page 56), and that even when you dont see your end customer, you still need to have their desires for a positive experience at the forefront of your planning. Wholly Guacamole may sound like an expression, but its also a hot brand within Fresherized Foods. Tracey Altman shares how shes used social media to create engagement directly with her customers. Not only is she engaging customers in the fun experiences guacamole can bring, but shes also allowing customers a say in key areas such as branding and new product development. Check out her story on page 26 and Wednesday Nov. 6th at the Engagement & Experience Expo. We hope you enjoy this issue and we encourage you to join us and Dave Power at the 3rd annual Engagement & Experience Expo, Nov. 5-7, at the Westin Galleria, Dallas, TX.

Measure on a new scale.


What happens when an agency mixes best-in-class analytics, leading technology and customer strategy with digital media excellence and provocative creative? Visible results. Of entirely new proportions.
Expect more. merkleinc.com.

Sincerely,

Erin Raese
Editor-in-Chief Loyalty Management erinraese@loyalty360.org

US Aginity Exchange Solutions Trane PunchTab vPromos

WELCOME NEW LOYALTY360 MEMBERS!

Europe Cherry London Ketchup PMCG Verint

age.indd 1

Loyalty Management LOYALTY360.ORG

5/23/13 2:37 PM

Whats New
On Loyalty360.com

LOYALTY 360 ON THE WEB

LOYALTY 360 HITS EUROPE!


We are pleased to announce the launch of Loyalty 360 in Europe. Visit loyalty360.eu for the latest customer related news and to become a member! Plus join us October 7th and 8th in London for the Loyalty Expo event. Details available: loyaltyexpo.eu

LOYALTY EXPO EUROPE


The two-day event will be jam-packed with learning and networking opportunities including: interactive sessions, marketer-only peer-to-peer roundtables, networking receptions and exhibit hall. The roundtables have been quite popular at our past events as participants take advantage of this opportunity to share experiences and discuss challenges and solutions.

THOUGHT LEADERSHIP VIDEOS


Loyalty 360 continues its Thought Leadership series with compelling videos from loyalty thought leaders. Jerry Preyss, CEO at Interbrand, shares his philosophies on the role that technology, customer feedback, social media and community play in customer loyalty. Euan White, Senior Vice President at dunnhumbyUSA, talks about his companys new Customer Centricity Index model, which measures customers perceptions of how well retailers meet their needs and wants.

FEATURED ARTICLES Found exclusively @ loyalty management online


loyalty360.org/loyalty-management ImpAimee Munsell, Director of Smarter Marketing for IBM, talks about the importance of being authentic and how brand strategies now converge around the connected and empowered customer. Eoin Comerford, CEO at MooseJaw, shares the brands philosophies and strategies for building customer loyalty, touching on the importance of understanding how employee engagement impacts customer experience and retention. Loyalty 360 CEO Mark Johnson interviews Laura Rick of the Miami Dolphins to uncover how the Dolphins tackle unique challenges to maintain and grow a loyal fan base.

Loyalty Management THIRD QUARTER 2013

LOYALTY FORUM: YOUR VOICE

If You Were Granted 3 Wishes to Help You Reach That Goal,

Were all striving to build long loyal customers.

What Would You Wish?


1 2 3
Really actively listen to your customers rather than pay lip service Do the basics well before trying to overlay sophisticated marcoms Prove you value your customers with personalisation, relevancy, and added value

The point is dont try to be too clever until you really have the ability to deliver good value, great service and treat every customer in the way you would like to be treated. -Andrew Dixon, Managing Director Pure & Natural Brands Ltd. (EMEA)

1 2 3

An inner feeling of 100% customer centricity in all levels of the organization Perfectly integrated tools and systems to offer targeted service In case the above 2 does not work - NPS and churn KPIs for every employee with weights over 50%

Unlimited budget and resources

Crystal ball to see the future True brand definition and commitment throughout the entire
organization
-Anonymous

-Serdar Senay, Enterprise Retention and Loyalty Unit Manager Vodafone Turkey

Loyalty Management LOYALTY360.ORG

remember those dials they use to gauge an audiences interest. it is live and they turn to the right or turn to the left to gauge their interest. i wish i had that so i can see every move we make and how it effects our consumer.
-Tracey Altman, Vice President, Marketing and Product Development Fresherized Foods, Home of WHOLLY GUACAMOLE & WHOLLY SALSA

1 technical skills. Because everyone is a customer and attitude is 90%


of your interaction and technical can be taught

Employees were hired first for their attitude and second for their

2 loyalty program our customers deserve it! 3 customers through social media

For my company to invest more money in our engagement based To move away from an informal survey process and engage our B2B

-Jennifer K. Schmitt, Director Customer Excellence Siemens Industry, Inc.

1 leadership role

Leadership awareness and complete buy in to CX as a profession and Unlimited budget to support systems & programs to help measure Execute a true day in the life of our customer program for all

2 and improve CX

3 employees to experience

-Roberta OKeefe, LEAN Six Sigma Master Black Belt Customer Experience GE Power & Water

1 the entire organizations clients 2 necessarily scores

Single CRM database, with timely, complete data representative of Aligned incentives through the organization to drive behavior and not Metrics from the aggregate B2B loyalty environment to benchmark

3 our performance against

-Anonymous

...dont try to be too clever until you really have the ability to deliver good value, great service and treat every customer in the way you would like to be treated.

Loyalty Management THIRD QUARTER 2013

LOYALTY FORUM: BEHIND THE BRAND

Behind the Brand


ERIC V. HOLTZCLAW is founder and CEO of Laddering Works, a marketing strategy firm, and Vice President of Professional Services at PossibleNOW, the industry leader in preference management. He advises startups to Fortune 500 clients on the development of customer-centric products, services, marketing messages, and experiences. Eric has spent more than 20 years founding multiple start-up companies, including one of the first profitable Internet enterprises. He is the author of Laddering: Unlocking the Potential of Consumer Behavior and his weekly radio show, The Better You Project, shines a spotlight on entrepreneurs individual business journeys and successes.

With eric V. Holtzclaw, Founder and Chief Strategist of Laddering Works, and acting Vice President and General Manager of Professional Services at PossibleNOW

What do you see as the next big trend in customer engagement and loyalty? I see a lot of promise in augmented reality because of its mobile and in-context application. Augmented reality is an opportunity to create experiences that both engage customers and encourage their repeat use. Success will hinge on implementing augmented experiences that cater to customers individual needs and preferences. What is the biggest challenge you are currently LOOKING to solve? Integration to the mobile channel. Large companies in particular are slow to adopt new channels and seem to think they can delay the adoption of mobile much in the way they did the adoption of the Internet. The technology flywheel is rotating too quickly to ignore this important channel for engagement and a delay in creating a mobile strategy is in essence a decision to allow a competitor to dominate that space.

are slow to adopt new channels and seem to think they can delay the adoption of mobile much in the way they did the adoption of the Internet.
What marketing innovation do you wish you had come up with first? From a marketing perspective, I think smartphones and apps are the greatest innovation and remain a largely untapped channel. If marketers would concentrate on building truly useful apps that support and understand their customers, some of the main problems that keep marketers up at night relationship, retention and showrooming would be easily solved.
Continued on page 12

Large companies in particular

Loyalty Management THIRD QUARTER 2013

11

LOYALTY FORUM: BEHIND THE BRAND


Eric V. Holtzclaw continued...

You recently wrote a book, Laddering: Unlocking the Potential of Consumer Behavior. What was the catalyst that inspired its creation? I spent over a decade working with the largest most important brands. They would bring me products, services, experiences and marketing campaigns that were failing miserably because they were based on erroneous hypotheses that were very simply corrected by having the right conversation with the intended customer. The reason was these companies rely on outdated techniques based on mass-production philosophies. I wanted to share the knowledge I had gained and help companies large and small avoid these pitfalls.

What is the core message in your book that you want readers to grasp? The world of marketing and product development has changed dramatically and the key to success is understanding why a customer behaves or reacts the way they do. Most companies focus on what and how - these metrics considered alone without a true understanding of the customer are not an accurate representation of success or failure and lead to flawed initiatives.

Dont

Quick Fire Questions*


What is your favorite word? Thanks. I dont think we say it enough Cant. I choose to live in a world of possibility What is your least favorite word? What turns you on creatively, spiritually, or emotionally?

An authentic story over a cup of coffee or a glass of wine Arrogance. The more you know, the more you realize how little you know

What turns you off?

What is your favorite (PG-13) curse word?

Shoot, but if I am being honest I rarely use PG13 curse words

what sound or noise do you love?

The ocean

what sound or noise do you hate? what profession other than your own would you like to attempt? what profession would you not like to do? if heaven exists, what would you like to hear god say when you arrive at the pearly gates?

Squealing brakes Journalism. I think its the ultimate combination of my passions

Doctor. I am a complete wimp when it comes to blood

Good job

*Inspired by James Lipton on Inside the Actors Studio we asked Gregory to share his quick fire response to the questions originating from the French series, Bouillon de Culture hosted by Bernard Pivot.

1 2 3 4 5 6 7 8 9 10

decisions have been made a certain way for years doesnt mean that you should continue to make decisions that way in the future.

listen to the norm. Just because

12

Loyalty Management LOYALTY360.ORG

What is your personal motto? My professional belief is that we need to understand people for where they are an attempt to change them or their behavior is futile without this core understanding. My personal motto is save like you will live forever, spend like you will die tomorrow. When you were a kid, what did you want to be when you grow up? I still ask that question of myself and others. As a young kid, I either wanted to be President (specifically Jimmy Carter) or I wanted to work at IBM. I ended up at IBM at the beginning of my career. I guess I still have time to be President when I grow up, but I am not sure that I am built for the politics. Who has had the most influence on your professional life? Everyone I have worked with or for has tremendous influence on my professional life. From some, I have learned lessons that I know not to repeat. Others have provided me with the encouragement and advice that have helped me move to another level. I have a top 5 list of confidants that change over my career each providing different perspective that allows me to make decisions more objectively.

Myprofessional belief is
that we need to understand people for where they are an attempt to change them or their behavior is futile without this core understanding.

Favorite leisure activity? Does this influence your work? I absolutely love to travel. Any job or project that includes travel as a component is of interest to me. It helps me get outside my comfort zone and to interact with new people. I love to see how alike we all are no matter where we live and I relish the downtime that travel affords to both read and write. Do you (or would you) like to volunteer? What organizations or causes are you most passionate about? I work with several organizations that assist the homeless. Homelessness is a cycle that is incredibly hard to break and any level of intervention in the way of a hand up is important to breaking this cycle. Many programs that support getting to the root of an underlying problem arent easily available if you dont have an address and you cant apply for a job without one. How do you measure success or failure? There is no such thing as an overnight success. I think that it takes time to see if an initiative or plan is going to work out and while I believe in course correction, I think an overall plan should be given 6 to 9 months before a dramatic change is made. This is especially true when measuring marketing initiatives or loyalty programs that are meant to increase engagement or customer relationship. Relationship takes time it doesnt happen overnight and is not the long-term result of a viral campaign or gimmick. Words of advice for the novice marketer? Dont listen to the norm. Just because decisions have been made a certain way for years doesnt mean that you should continue to make decisions that way in the future. Your most important question to answer is why? Keep asking why until you understand and can relate. L

join eric V. HOLTZCLAW at the 3rd Annual 2013 Engagement & Experience Expo! We encourage you to join Eric as he shares insights on The Power of Progressive Profiling with Brent Wheeler, Senior Vice President of Customer Acquisition Services, Response Mine Interactive and Florian Vollmer, Senior Vice President, Design and Principal, InReality

Loyalty Management THIRD QUARTER 2013

13

LOYALTY FORUM: 360 INSIGHTS

The

Challenge of Data
Mark Johnsom
Loyalty360
Data as an idea is one that has great power and great promise, yet it should be viewed with great reverence for its power (both positive, negative, and downright scary) and a realization that just because were talking about it does not mean we understand the nuanced complexities involved. For every brand or sponsor who deals with big data who truly gets it, there are several more who are lost in the complexity of data -- how to describe its challenges objectively, or position its product or service in a manner that is compelling to the market. For every opportunity, there is a challenge, there is a risk, and there is capitulation. For everyone who understands, there are numerous who are lost. For all the excitement of the big data it almost seems banal at times. For every opportunity we see that data can create insight through the opportunity to model behavior, to find criminals (from the meta-data that cell phone companies provide law enforcement entities), we are also made aware of the threats of big data, the security concerns, and potential for abuse such as secretive NSA programs (PRISM, XKeyscore exposed by one Edward Snowden) to the challenges of truly understanding what data should be used. Data as an idea is simple, yet I have never seen so many truly confounded by such a simple idea. The biggest concern I continue to see is those who think they have a better grasp of the challenges and opportunities, and feel they as a brand or a vendor believes their capabilities far exceed where they actually are. We continue to speak to people day in and day out, and data is paramount to most marketers. It is complex and increasingly moreso is the challenge for marketers to make data exciting. For every marketer who is tuned into big data and is positioned to expand or exploit its potential,

It is interesting this idea of data (big, small, transaction, structured, unstructured, modeled), and if I have read one article on big data, I have read 10,000. The uniqueness of the topic has waned, as the cauldron call of relevancy in the cacophony of dissonance continues to grow.

there are those who are confounded by the challenges, with a realization that their marketing or operational organizations do not have the mental dexterity or financial wherewithal to understand or exploit the data troves they have. Even those who may have the financial wherewithal for the short-term investment, do not have the commitment from senior level executives to ride out the challenges to reach the opportunities in the journey. Data brings great power, and even greater responsibility. You look at the challenges of Google and the multi-touch points it has on individuals. The challenge for Google is it once had an idea within the organization to allow individuals to limit access to this data, to limit access of the various touch points, yet if it (or other aggregators of data) actually gave individuals a choice, it may not materialize in the manner it thought, were accustomed to, or in a manner that led to continued financial strength (unfettered access to the data). The challenge of data is to balance the value and insight with the need for integrity, disclosure and balance; these have not always been part in parcel. It is interesting for every discussion we have where data is relevant, timely, and engaging; there are others where data is misused, misconstrued, and misunderstood. Making data interesting is the challenge, along with understanding disparate data-making models. We need to make discussion of data simpler, yet with its increasing complexity, that task in and of itself is a challenge. It was only two years ago that Google was looking to develop a new privacy control tool for users that could be used across all of Googles platforms that would allow them to select on a sliding scale how much data they were willing to share with Google.

Individuals could designate whether they want a minimal (kitten), medium (cat) or maximum (tiger) collection of information about them across all of Google services. Yet this was disbanded earlier this year. Google claimed the challenge was integrating disparate platforms and making sure privacy standards were adhered to. Inasmuch as there are complexities between platforms, Im sure the challenge was the realization that if the consumer decided to select minimal access to data, that youd have a hard time gleaning the behavioral insight on that individual going forward. Responsibility for Google to allow us accessed (or access to) control our information was confounded by the fact that there is great and growing monetary value to Google. The realization that some individuals may turn off access was surely a large consideration for Google scrapping the product. The maximum-security protection, or Tin Foil Hat, goes against Googles interest in getting new and current users to share more information. Tin Foil Hat was the security preference that Google developed -- and intended to use -- that would allow individuals to remove all access to their data for Google. So if I choose that option, Google would have little, if any access to it. Google thought about it and did not want to set that preference and allow users to have this option. Google doesnt want you opting out; it wants greater access to your data. Thus, the paradox: Google talks about allowing individuals the right to use/monitor/control their data, and it removes that option. So for all the talk of data and giving you control and access to it, we need to first examine how we are talking about and understanding data. The challenge to make data relevant should be quite simple, yet in an effort to increase its value, we have confounded so many that they have tuned out much like understanding the strength of our economy. Is the participation rate growing or falling? Is the government assessment of unemployment correct or is the job study? Is the Conference board or University of Michigan household study a more indicative assessment of consumer confidence? Oh wait, that is the banality of BIG DATA. Stay tuned; it is only going to get more complex. Just make sure you are telling a better story. L

Loyalty Management THIRD QUARTER 2013

15

LOYALTY FORUM: BY THE NUMBERS

o f A me r i c a n w o r k e r s a r e n o t e n g a g e d o r a c ti v ely d i s e n g a g e d i n t h ei r w o r k . A n n u al c o s t o f d i s e n g a g e d em p l oy ee s ? $ 3 0 0 b illi o n i n t h e U. S. a n n u ally.

{
25%

Engaged employees with a lot of flextime have 44% higher wellbeing than actively disengaged employees with very little or no flextime.

The impact of FLEXTIME

44% 27%

Workers aged 65 and older are the most likely to be engaged in their jobs.

Workers aged 30 to 64 are less likely to be engaged at work than are those who are younger or older. Men are much less likely than women (33%) to be engaged at work. There are no significant differences in employee engagement by income level.

of engaged employees who take less than one week of vacation, still report higher overall wellbeing than actively disengaged employees (some of whom take 6 or more weeks off).

From once-in-a-lifetime experiences around the world to everyday moments just down the street, we make it easy for our clients to reward their customers.

We create loyalty.

c x l oy a l t y.co m

800.622.4863

LOYALTY FORUM: Q&A

Q&A
Q:
L
Weve rolled out our loyalty/ customer recognition initiative, now were challenged with getting people involved. Whats the right amount of communication? What information or content should I include in my communication? Do I need to run an additional incentive?

Ask the Experts:


For successful B2B programs, we recommend a well-planned strategy that includes three types of communications using a combination of direct, digital, social and mobile communications.
aunching a loyalty program without the proper communication plan is like running a cruise ship without an itinerary. Theres a lot of confusion and you may lose a few tourists. For successful B2B programs, we recommend a well-planned strategy that includes three types of communications using a combination of direct, digital, social and mobile communications. The first type is enrollment and awareness communications. These go out to each member immediately after program enrollment and focus on information related to value proposition, rules structure and other program-centric news, such as accelerated earn opportunities or new reward offerings. The second type is a series of triggered communications that are based upon members specific behaviors and/or trends. As members participate in the program, key behaviors automatically relay timely and relevant messages to drive increased activity and engagement. These types of messages are highly effective and consist of the following: Achievement of program milestones Redemption reminders Re-engagement offers Recognition of special events like birthdays and anniversaries Surprise and Delight offers The third type is program status updates. These are quarterly or monthly communications that contain individualized points and program level information for members. The communications also contain dynamic content based upon the members interests and include information on new products, program promotions, exciting updates and featured rewards. If initial enrollment has been challenging in your B2B loyalty program, we recommend leveraging your sales reps or inside sales teams as much as possible. This includes educating your team on the details and benefits of the program so it can be communicated directly to your business customers. Incentives for your sales team members as they sign-up businesses can be an effective tactic as well as auto-enrolling your very best customers. So as you move your ship out of dock, its important to feed and entertain the passengers onboard your program and dont just put it on cruise control.

Bob Konsewicz Director, B2B and B2C Loyalty Solutions Brandmovers, Inc.

18

Loyalty Management LOYALTY360.ORG

I
From my experience you need to have a clear customer focused proposition for your initiative...that you can quickly deliver on so you immediately demonstrate the value to me of being involved in this.

wish the answers to your questions were simple, one-liners but, unfortunately, this is a bit like asking how long is a piece of string!

There are so many factors you need to be considering - including: who is your target audience - is it your end users or your channel partners or a combination of both? why should they be interested/sign up for your initiative? how are you measuring the success of your initiative? what products/services are do you provide - what is the sales cycle for them? how are you communicating with your members at the moment, how often & with what. From my experience you need to have a clear customer focused proposition for your initiative...that you can quickly deliver on so you immediately demonstrate the value to me of being involved in this. Regarding how often & what to communicate. The simple (but complicated to deliver) answer is - as long as you continue to deliver relevant information (& thats the key word relevant) as a member I will interact with that information. So frequency doesnt become a key issue. If however you continue to send me information that I clearly dont want (based on my response or lack of!) then frequency quickly becomes THE issue.

Mary Carse Carse Consulting Keep the value proposition simple, direct and without significant hurdles to achieve the promised rewards.

here are very good comments and suggestions here and I would only add to your latest list of questions that for the initial rollout of the program there may need to be additional outreach through various channels. Since this is a B2B channel - I would start with my best customers and begin a direct outreach program through multiple channels (email followed up by phone or test a phone call with an email afterwards). We all receive rewards program messages, but as it was stated earlier my time is limited and if the subject line doesnt interest me I am moving on. Email has become the new direct mail and we all remember that a customer generally only takes a few seconds to decide whether or not to open an envelope or if it goes into the circular file unopened - so your envelope better be direct and with a pertinent message that makes me say - Ok, Im interested enough to open this. Same for an email - if you cant wow me in the subject line or the first couple of lines in the email which I can see in my preview screen - Im hitting delete or ignoring it all together. Ive always felt that unless a customer specifically tells me which channel they want to be communicated in that I may need multiple touch points to finally secure a sale (or enrollment in this case). If there is a call center to take orders - are your agents having the conversation with the customer when they place their next order?

The other suggestion I would make is to be sure the reward is directly tied to my business with you. Are you offering me a restaurant coupon when our business is electrical supplies - not interested? Are you offering me an earned discount on a future order for my continued business - now Im interested because it saves me money and is directly tied to our business relationship? Make sure the reward isnt disjointed from the nature of the business and dont make this difficult for me either. Keep the value proposition simple, direct and without significant hurdles to achieve the promised rewards. Best of luck!

Michael DeGregorio Vice President - Marketing | RBS Citizens, N.A.

Loyalty Management THIRD QUARTER 2013

19

FEATURES

Through Pinterest
Sharad Verma
Piqora
The visual social network Pinterest emerged on the scene last year and has quickly become the online social community of choice for companies looking to drive visual brand engagement and social ROI. Since May 2012, Pinterest traffic has more than doubled in size and is now the third-largest social network in the world, just behind Facebook and Twitter. Recent surveys suggest that 12% of all US Internet users are now on Pinterest. As consumers flock to this highly visual social platform, savvy companies are creating a formal presence on the site in order to drive traffic back to their ecommerce webpages to drive future sales.

How to Increase BRAND LOYALTY

Marketing

Pinterest also has a 75% bounce rate compared to 90% for Facebook, according to BloomReach. When it comes to driving actual sales, on average, Pinterest results in $1.50 in revenue per visit, compared to $1.15 for text-based search and a mere 90 cents for Facebook. Unlike search, social visitors have an inherent curiosity to browse categories and discover, and marketers are recognizing that these customers need to be presented with visually compelling options before they will make a decision to purchase a product. The Pinterest community of consumers and brand followers is out in full-force, finding treasures on company websites like Overstock.com, ZGallerie, Etsy and BlueNile, sharing inspiration with their friends and followers. The Pinterest community of trend-setters has an undeniable brand influence over others on the network as people often trust the recommendations of friends when making purchasing decisions. According to Stormy Simon, co-president of Overstock.com, integrating a visual feed of trending products from Pinterest, known as a gallery, onto their own website harnesses the power of trend-setters in the Pinterest community, who are curating the hottest in home dcor, as well as the savings from Overstock.com and brings top trending products on to our website and Facebook tabs. At Overstock.com we check more than 500,000 prices every week, so fans know that theyre sharing products with big savings off retail prices. In another example, the marketing team at the jewelry retailer Blue Nile began noticing that a large number of consumers were spending time on Pinterest, and created a presence to showcase its

Since May 2012, Pinterest traffic has more than doubled in size and is now the third -largest social network in the world, just behind Facebook and Twitter.
products, particularly since consumers were already pinning its products on the social network. The retailer debuted its Pinterest presence in February 2012 and began highlighting its offerings via theme-based boards like Wedding hair & earrings and Mother of the bride gifts.

The vast majority of Pinterest users are women between the ages of 25 and 34 and a recent Pew Internet & American Life Project survey of 1,000 US adults found that nearly 20% of women using the Internet are now on Pinterest compared to just 5% of men. Clearly, Pinterest is an ideal place for brands and retailers to invest their time if they wish to connect with this demographic.

20

Loyalty Management LOYALTY360.ORG

For brands looking to get started on Pinterest, here is a compilation of best practices for building their followers and driving sales on the social platform... Once you abide by these recommendations, you are poised to experience an exponential growth in the number of followers, repins, website traffic and sales. Best of luck and happy pinning!

Best Practices for Brands Using Pinterest


1. 2.
nently feature Pin-It buttons on your existing website to drive brand engagement on Pinterest and dont forget to include clear call-to-actions on your site.

Optimize Your Website for Pinning 80+% of pins on Pinterest originate from websites. Promi-

Include Descriptive, Yet Concise Product Descriptions and Price This makes it easier for people to convert once they discover your products on Pinterest and wish to click through to make a purchase.
Create a Visual Web Experience Pinterest is the Google for the visual web. Be sure to create cohesive boards with themes to drive pinning and engagement. Install a Pinterest gallery on your own site to get people accustomed to the Pinterest experience and which integrates naturally to the experience on the social network. This gallery should pull in all the popular and trending products on your site that are performing well on Pinterest. Know How To Track the Right Metrics On Pinterest, there is a limited set of performance metrics that can be tracked. Be sure to research working with other Pinterest analytics vendors to effectively track the performance of your marketing efforts. Here is a subset of the metrics you should be prepared to track: Pins from Website, Average Pins per day, Number of unique pinners, average pin per pinner, number of repins, repin-to-pin ratio, visits from Pinterest, Visits per pin, Purchases and revenue. Mix up Your Board Content Boards should not simply be collages of product imagery. To be most effective, create themes like specific rooms of the house, colors or textile continuity to drive people to assemble their own look and collections. Since it is a visual experience, dont be afraid to try something new and build both vertical and horizontal categories that encompass the products you wish to promote. Launch Periodic Pinterest Promotions, Sweepstakes and Contests - Running Promotions can create a boost in Pin activity that drives reach and awareness. The spikes in activity will increase organic follower growth. Learn how to drive loyalty through constantly updating your boards with new or featured products.

3.

4.

5.

6.

However, for marketing experts, Pinterest itself offers only limited analytics tools to measure and analyze the effectiveness of brand campaigns, so Blue Nile connected with a vendor to measure success and consequently launched a Pinterest contest. The eight-day Be My Valentine contest netted the retailer about 5,000 new followers, which is 233% more than the roughly 1,500 new fans it gains during a typical eight-day window, the company reported. And, adding to that excellent

result, the retailers pins were re-pinned more than 50,000 times, exposing hoards of shoppers to the brand. Thats because when a consumer logs on to Pinterest she sees the items her friends have pinned or repinned from another users board. L

Loyalty Management THIRD QUARTER 2013

21

FEATURES

J.D. Power: The Voice Behind Voice of the Customer


H
aving the opportunity to interview J.D. Power was quite compelling. Having been somewhat familiar with him and the awards that bear his name, I knew there was more than likely a great story behind the brand and, more importantly, the man. Yet my familiarity with the name was solely on the basis of J.D. Power as a brand; the sublime power of the name, the award and, therefore, the man was truly not understood. The J.D. Power brand has an amazing connotative and denotative strength -- strength in the value of the rating. Most people are aware of the prestigious awards that carry his name, especially those with consecutive years of achievement. Yet, much like the survey industry he so profoundly changed, I did not truly understand the intricacies involved in what the value of the rating means. Nor did I know how the rating, the brand, and the man so profoundly altered the industries he touched in his life. I knew the rating acknowledged strength of a brand and brands that valued customer satisfaction. This allure always brought immeasurable value to a brand -- as I had never been part of a brand which had won or competed for said award. Since I was not as aware of the story -- and the value of the story -- as I am now, I can tell you that J.D. Power was a revolutionary, a visionary (a term that I think is overused in our self-aggrandized society, but is stoutly appropriate here), a man of amazing integrity, a man who brought value to the consumer that we had never seen before; and yet was probably the most humble interview I have ever conducted. You always hear of people who wanted to make a difference in their industry, or in the lives of others, but rarely are they as altruistic as they claim. J.D. Power embodies this virtue.

22

Loyalty Management LOYALTY360.ORG

Realizing a Challenge
The most fascinating piece of the J.D. Power story is that he realized there was a challenge in the market due to how traditional research had been conducted -- the lack of value given to the customer, who truly lacked a collective voice. This lack of voice was rationalized as the factories of the 1950s and 1960s were built for scale. They were the former factories of the war machine that needed to be operated at a certain capacity to turn the profit necessary to build the rapidly growing middleclass society. Power saw something that brands did not see -- his sublime realization that building products, services, and offerings that met the explicit (expressed) as well as implicit (irrational) needs of the consumer would give brands valuable equity with their consumers, and create immeasurable loyalty. This is the same value and loyalty that brands are searching for today; the same loyalty and value that -- without J.D. Power and the focus he placed on the consumer -- would not resonate today in this customer-centric environment targeting real time, social, and personal interaction. There would be no Voice of the Customer if not for the challenges cognizant to J.D., and the changes he pushed so ardently for and achieved. Power was willing to take a stand against traditional models, although this translated to alienation from traditional friends, family, (as many in his family were involved in the Big Three Ford, General Motors, and Chrysler), and the market/industry he joined after leaving Wharton. He realized and saw corruption in the auto industry, which the franchisee system was not focused on to address and let the good old boys networks remain in a state of stasis.

The Forefather of Customer Experience and Voice of the Customer


J.D. Power was the forefather of customer experience and voice of the customer. He believes that there was compelling power in the voice of the customer and his unwavering commitment revolutionized how brands (first off in the auto industry) viewed and, more importantly, listened to the customer. His commitment to this vision is the reason that he fought against the traditional research methods of the day (where it took days among competing fiefdoms to design surveys that would be administered by brands, yet would shed no compelling insight to the challenges facing them; where the people being researched were the ones conducting the research). These individuals were the ones who were responsible for constructing the survey, and decided who and how the surveys were to be sent, and controlled the data. Given Powers initial challenges in the auto industry, its little wonder we have the euphemism: garbage in/garbage out. One of the biggest challenges J.D. Power had with regard to research, particularly in light of the automobile industry, was the fact that it controlled the research and didnt let anyone else look at the research. Power believed that if an individual could challenge the proprietary nature of traditional research and truly retain ownership of it, there could be a very unique process of examining data and creating insights. He believed that if you create a process which surveyed a large group, controlled the data, and gave access to the Big Three, it would result in unique, open, and compelling research.

Building products, services, and offerings that met the explicit (expressed) as well as implicit (irrational) needs of the consumer would give brands valuable equity with their consumers, and create immeasurable loyalty.

Loyalty Management THIRD QUARTER 2013

23

FEATURES
J.D. Power continued...

The opportunity for brands: You could get a more compelling data set as the universe was expanded significantly and the relation between the brands could be established. You were no longer asking (or being coached) as to your satisfaction with one brand. Power was amalgamating datasets on diverse manufacturers and selling the results back to the manufacturers. The ironic thing is that, in retrospect, these companies should have valued the insight as they could (or should) have rated the results against theirs, and the delta should have caused an internal drive to address. But manufacturers and their alliance of dealers, unions, and the arcane product and distribution manner did not want this. It was comfortable with the process that had existed for so long; until the Japanese manufacturers (Toyota) hired Power to help them understand the U.S. market.

It Didnt Happen Overnight


From when he started his company in 1968 to the early 1980s, there remained a reticence to truly listen to the outside individuals and outside data. There was a belief that the Big Three organizations would only want to truly know their industry and, therefore, they would be the ones controlling the research. The traditional challenge with manufacturing in the auto industry is the fact that it was based on meeting certain goals. Most cars were not profitable until they hit 200,000 units,

24

Loyalty Management LOYALTY360.ORG

(Brands) need to be able to understand customer experiences and the customer engagements they have and measure them based on the expectations of the individuals to truly foster long-term loyalty and unique relationships.
and therefore the focus was on the manufacturing process versus designing cars. Yet when Toyota approached Power seeking insight as to how to generate more interest in the U.S. market, it caused a paradigm shift for the way the traditional Big Three viewed the consumer. There was also the opportunity with Mazda, which had a defect in its rotary engine, yet had compiled research and customer satisfaction surveys that stated the issue was not bad enough to merit being addressed. But Power believed it was a significantly larger issue and during one of his first comprehensive studies he was able to show to Mazda -- much to its chagrin -- that this was a significantly bigger issue than initially thought. way Toyota worked with its given network, the way it worked with its American subsidiary, and how that affected the relationship he had with them. The challenge with internal customer satisfaction numbers was that they didnt do a good job of ranking satisfaction -- Cadillac versus that of a Ford or that of Dodge -- so the ability to take customer satisfaction numbers from a wide swath of the American public that incorporated all of brands was very unique.

Finding That True Voice for all Customers


The traditional top-down autocratic research processes of the Big Three led to a unique opportunity for J.D. Power. But the challenge remained in getting brands to partake and buy in to customer satisfaction surveys. The brands didnt initially feel J.D. Power was honest (due to the fact that many of them may not have been) and they felt he was not equipped to develop a survey or relative processes that were truly representative of the market or had any germane value. He witnessed this when he was taken to task with regard to the Mazda rotary engine numbers -- the numbers were leaked to the press and J.D. had to develop his first PR campaign. He thought quickly and was able to develop his first press release that gave credence and credibility to the research processes he was putting into place. Yet when Mazda saw that Power questioned the validity of his numbers vis--vis the numbers it had, J.D. was actually able to show them the methods by which they were simulating and rating data were not representative of the comprehensive total audience to which the Mazda products were sold. Mazda realized it was wrong and its capitulation was a hard-fought win for J.D. and marked the turning point in the push to give you and me the voice we have today. L

Most Companies Believed Customer Satisfaction Wasnt an Issue


Most companies interviewed did not believe they had an issue with customer satisfaction, since they were the ones writing the surveys and they could script them in a manner which -- consciously or subconsciously yielded deceivingly positive data. We saw this in a modest example when the engine of the Mazda was significantly worse and was a concern of the customers yet in Mazdas internal research they did not see this problem, Power told Loyalty 360. This was a challenge getting the senior-level executives to understand that what they thought was the situation, was not actually the situation they were facing. The challenges that J.D. Power faced are similar to challenges brands are facing today. They need to be able to understand customer experiences and the customer engagements they have and measure them based on the expectations of the individuals to truly foster long-term loyalty and unique relationships. Traditionally, dealers have had a perception issue thats been very hard to shake. They did not know how to fix numerous service issues created by products that were pushed on them by the manufacturers, and the manufacturers really did not care if issues could not be fixed and had no concern for the calls from their dealer network for better training and products of a higher quality. This disconnect in the system was fraught with challenges. Power spoke about the challenges dealer networks had when servicing cars.

2013

Hear more from j.d. power as he presents

Most Important Asset: The Consumer


They did not feel a commitment to the customer because it conflicted with the dealers and manufacturers, the brands and disparate unions, Power said. All of this led to a challenge for the most important asset: the consumer. When Power eventually got in to see Toyota, he realized that there was a huge opportunity, but there were challenges regarding the

at the 3rd Annual 2013 Engagement & Experience Expo!

the keynote speech

Loyalty Management THIRD QUARTER 2013

25

FEATURES

Wholly Guacamole to New Horizons


A Social Media Case Study

Social Media Catapults

ffectively listening to your customers is becoming the single most differentiating factor among brands today. Loyalty is about behavior and the challenge for marketers is to understand their customers along with the rapidly changing landscape. Customer-centricity has become a massive buzzword within the industry, while brands attempt to implement this business model. Successful marketers are the ones who truly and effectively listen to their customers, and obtain insightful customer data that provides for authentic, relevant engagement that is consistent to the brand. By practicing this, marketers foster customer comfort, familiarity, safety, and trust. And that is exactly what is happening at Fresherized Foods the home of Wholly Guacamole and Wholly Salsa brands. For Tracey Altman, Vice President of Marketing and Product Development for Fresherized Foods, listening to customers and allowing them to help shape and propel your company supersedes any other marketing tactic. Its a part of her daily routine that excites her and everyone at the company. By truly listening to its customers, especially through social media notably Facebook and Twitter -- Wholly Guacamole has soared to new heights in the past six years amid a rebranding process that has resulted in superior name recognition and fiscal success.

Name change sparked wider recognition Six years ago, Altman told Loyalty 360 she was unsure of taking on a new position at a company then known as Avo-Classic not exactly holding the same name recognition ring to the public as Wholly Guacamole. Altman realized that Avo-Classic maintained a cult following, but the recommendation was to build a brand that needs to be fun. Part of building that brand identity, Altman explained, was incorporating the most important element of the company: the customers. Altman created the fun during the rebranding process by asking customers to suggest new names for the company via Facebook and Twitter. The name was built all around having a good time, she said. I had less than $1 million to launch a new brand and someone said you need to do the Facebook thing. I said Id handle it, start it, and understand this whole Facebook thing. Altman said the company name of Wholly Guacamole came from a consumer after the company ran a contest online We took the name off the box for two months and turned it into a voting contest, Altman said. The one thing social media has taught me is they can really help you. If they love the product a lot, people out there want to help you. When Avo-Classic transformed into Wholly Guacamole after receiving numerous options from customers -- it sparked a new and compelling brand identity, Altman said.

26

Loyalty Management LOYALTY360.ORG

Passion and Entrepreneurial Spirit We get 200-400 emails a month from people saying they love our product, Altman said. Its a family-owned company. They were all about doing something fun and right, and I fell in love with them and fell in love with their passion. And that company passion led to a unique and all-encompassing relationship with its customers. Its that entrepreneurial spirit that I love so much, Altman explained. We have this great commitment. We are about the consumer. Wherever they are having a conversation, I want to be part of it. Social media is where they are having it right now, so we are there. Since the brand is all about fun, Altman said that lends itself perfectly to involving customers and social media using things like sharing recipes, party ideas, and asking customers for their opinions on a variety of company objectives. Using Social Media Makes Us All Smart Marketers Using social media to help build and drive your brand makes us all smarter marketers, Altman said. Theyre not the final decider, but they certainly have impact and weve made changes in our packaging because of that feedback. Whats more, Altman solicited Wholly Guacamole customers via social media and asked them what they thought of some tagline proposals from an ad agency the company was working with, which set off a bit of a firestorm. We put it on Facebook and asked our customers to look at these ads and tell us what they thought, she explained. My creative agency was on the phone with us right away. But our target audience was awesome. It was an important day and we realized that we have to start doing more of this social media thing. They (your customers) want you to succeed. Theyre rooting for you. When Wholly Guacamole wants insight on almost anything related to its marketing efforts, Altman turns to its customers.

Positive Impact of Social Media on Brand Last year Altman said her boss asked her to illustrate the positive impact of social media on the brand. It didnt take long for Altman to prove her point. I did a chart of how our revenue went up each year, Altman explained. Then I drew the same kind of line for our social media growth. I told him I can stop doing social media for a year and see what happens, and he said he didnt want to do that. He decided it wasnt a good idea to test it. Since Altman deftly integrated social media into Wholly Guacamoles marketing plans, the company has experienced double-digit growth in each of the past six years. Wholly Guacamole is now the No. 1 guacamole and dip in the produce section of most retailers across the country. It was a perfect storm because we got our act together on the branding side, and consumers started learning more about healthy eating and its a healthy product, she said. As a New Englander, I didnt know what guacamole was until When Altman took the job at Wholly Guacamole, she had one fairly large personal obstacle: As a New Englander, I didnt know what guacamole was until I moved to Texas, she said. At the time, our product was a very regional product. But that has changed now. Wholly Guacamole is the worlds largest user of HPP (High Pressure Processing) technology and is Americas best selling brand of pre-made guacamole, and has been for 10 years. Attention to detail has brought the brand to where it is today. The product is made with real Hass avocados and natural ingredients that dont include preservatives, artificial flavoring, or fillers.
Continued on page 28

By truly listening to its

customers, especially through social media


notably Facebook and Twitter - Wholly Guacamole has soared to new heights in the past six years amid a rebranding process that has resulted in superior name recognition and fiscal success.

Loyalty Management THIRD QUARTER 2013

27

FEATURES
Wholly Guacamole continued...

A brand of the people Placing the customer first is the most important thing a brand can do in todays omni-channel marketing world and this approach can result in extraordinary two-way conversations with your customers, resulting in invaluable insight that can be implemented and boost your bottom line. Altman knows a little something about dedication and devotion since Wholly Guacamoles customer base is nothing if not loyal. Another Fresherized Foods brand customers are loyal to is Wholly Salsa which was added to the company fold in 2009. This is the behavior that makes it a two-way street for consumers to be part of the brand, she said. We are a brand of the people so it means a lot to our current and future strategy. We are a dip company who wants to help consumers find small wins whether that is with weight, feeding a family quickly, healthy snacking, or peace of mind. The consumer is the key to how we are growing and managing the brand. Brands Should Be Loyal to Their Customers There is an incessant amount of discussion about customer loyalty to brands, but now that phrase has been reversed as many marketers believe brands have to be loyal to their customers. To that point, Altman shared an experience at a recent conference where she attended a session and asked the featured speaker a question after his presentation.

After Altman asked her question, the speaker retorted: We marketers have to own our brands, not the consumer. Altman said she sat down dumbfounded and discussed the speakers response with other stunned attendees at her table. Customer Should Be Center of Marketing World The customer should be the center of the marketing world, Altman stressed. Having the consumer be part of that is exciting. Now we have to balance what the consumer wants and needs with trends and things consumers cannot articulate. Having the consumer on your Board of Advisers helps with brand extendability, research, and making sure the brand continues to be relevant. Wholly Guacamole owes so much of its burgeoning success to the power of social media, Altman said. Taking action at Wholly Guacamole without customer input does not happen. Just how large a role does social media play for Wholly Guacamole? It has been a key component for the past six years, Altman said. We integrate it into every program as well as planning. L

hear more from TRACEY ALTMAN at the 3rd Annual 2013 Engagement & Experience Expo! We encourage you to join Tracey as she presents during the session, Wholly Guacamole: 10 Things We Learned About Social Media (hint: its not about guacamole).

28

Loyalty Management LOYALTY360.ORG

LOYALTY FORUM: BEHIND THE BRAND

Behind the Brand


Dave Mangano, Siemens Industry, Inc.

D
T

ave Mangano is Senior Vice President, Field Operations for Siemens Industr y, Inc., Building Technologies Division for the America region. The Siemens Building Technologies Division is the worlds market leader for safe and energy efficient buildings (green buildings) and offers customers solutions for energy efficiency, building automation, heating, ventilation and air conditioning (HVAC), fire protection, and security. Across the United States, the Building Technologies Division employs more than 7,000 employees from approximately100 branch locations; worldwide, Siemens employees more than 30,000 people with 500 locations in 51 countries. hroughout his career in Siemens, Dave has always demonstrated a passion for customer experience. He joined Siemens Building Technologies Division in 1995, and has been leading the field operations since 2006. In this position, he helped the company to become a world leader in delivering customer excellence. Among his responsibilities are the guidance of each branch offices employees, strategic customers, quality, standards, and profit & loss statements. Dave has been married to Susan his partner in life and best friend for 29 years. They treasure their family of three grown children and five grandchildren.

30

Loyalty Management LOYALTY360.ORG

Well-trained and satisfied employees perform better and commit to deliver an outstanding experience to our customers. Loyal employees are emotionally involved with the company; therefore, employees are willing to create and maintain relationships that work for our customers.

As we get to know the leadership Behind the Brand, Dave discusses his perspective on driving customer excellence.

What are the key areas of focus for Siemens through the remainder of 2013 and into next year? Our priority is to deliver an excellent experience during every customer interaction. However, customer excellence begins with our employees, who are the direct connection between our company and our clients. Therefore, employees are our primary focus. Well-trained and satisfied employees perform better and commit to deliver an outstanding experience to our customers. Loyal employees are emotionally involved with the company; therefore, employees are willing to create and maintain relationships that work for our customers. With that in mind, we have developed a series of training and strategic initiatives that are focused not only on professional development, but also on personal attributes and employee empowerment. In return, we have improved our clients overall experience with Siemens Building Technologies, and increased our day-to-day operation metrics by 7% over the last three years. Based in our metrics results and customers feedback, we acknowledged that by focusing on the employees first, the organization would have high employee satisfaction and lower turnovers. Consequently, we would create empowered and expert workforces, committed to delivering an outstanding customer experience. In 2013, we achieved the highest employee satisfaction survey results and, consequently, we currently enjoy an outstanding retention rate. The results demonstrated that 88%

of our technicians are highly satisfied with our training programs, which improved their abilities to quickly respond our clients. It is clear that the investment in our employees is directly responsible for increasing our customers loyalty; therefore, we expect to continue with the same strategy in the near future. Is your existing customer strategy focused more on acquisition or retention? Why is this the most valuable approach at this time? Do you see this focus changing within the next few years? There is a delicate equilibrium between acquisition and retention. Acquiring new costumers is important to each and every organization; but retention has become an essential business strategy for our organization. Customer retention is vital for profitability and growth, and that is one of our main focuses. However, customers can only be retained if they are loyal. This year, Siemens Building Technologies enjoys the highest level of customer loyalty, which has impressively been increased by 14% over the last 3 years. That was possible because of our employees and the adopted innovative initiatives that provided our clients with unique value and excellent customer experience. One of our strategies was creating practices that tie in closely with our clients vision, whether that means faster service or cost reduction--its all about the customer. For the next fiscal year we are going to concentrate on two programs that will focus on the execution of our customer experience: the trusted advisor program, which helps us focus on delivering the right customer experience; and the outcome-based service,

which is an approach that delivers personalized service solutions with tangible measurements. I dont expect our strategy to change in the near future because, although our solutions make up the foundation of our business, the key lies in the consistency of our customerfocused strategies. These strategies have a direct correlation with our loyalty metrics, employee satisfaction, and profitability. What actions are you taking to meet or exceed your customers expectations? We take our customer feedback very seriously, not simply to ensure that things are going well but also to build in methods of systematic innovation and improvement. Through our Voice of the Customer program, we integrate it into everything we do at Siemens Building Technologies. After listening and understanding our clients feedback, we make a commitment to insure that we meet their expectations by: making their issues our priority keeping them informed at every stage of a project understanding our customers busi- nesses as well as our own becoming experts in their facilities providing a single point of contact for each one of them This commitment is having a clear impact on our performance; our annual report showed a 60% decrease in the time it takes to complete a service call or resolve a problem after receiving a customer requestthats over just two years.
Continued on page 32

Loyalty Management THIRD QUARTER 2013

31

LOYALTY FORUM: BEHIND THE BRAND


Dave Mangano continued...

My advice is to always master your basics before moving forward to the next level. It is that simple!
What do you believe is key in creating the ultimate customer experience? The key is creating a balance of employee satisfaction, customer loyalty, and shareholder value. These are all equally important, and if we focus on employee satisfaction and customer excellence, the shareholder value will follow. Together, this balance benefits our employees and shareholders, and, ultimately, our customers. As VP of Operations for a large global organization, how do you empower Siemens employees to influence the customer experience? We strive to provide a clear direction and vision of what we are doing and why we are doing it. Every employee at Siemens has KPIs [key performance indicators] that directly influence our customers experience, but we give our employees the authority to look beyond KPIs and make decisions that are right for the client. That is what is effective. We concentrate on taking care of our employees first. As a result, we are creating that balance between employees, customers, and shareholders. When we are hiring new employees, we also look for this attitude. We concentrate in finding the right person to join the organization: proactive people that look beyond the numbers; people who have a strong positive attitude and the ability to creatively resolve problems. How are you doing things differently than your competitors, and why? The two approaches that distinguish us from the competitors are our massive local presence and the commitment of our employees to deliver excellence. In the USA alone, Siemens Building Technologies has more than 100 branches, employing over 7,000 people. We are fostering a culture of high performance by investing in our employees. That is a clear distinction in the marketplace. It is easy for leaders to make the mistake to sit and think, As a senior leader, I am the reason we are doing well. But that is not really true. At the end of the day, we are only as good as our team. We recognize that we do well because of our employees, and that is really a differentiator for us. What is your personal motto? Never bet against our team. We always come through. What do you value among your friends, family, and coworkers? I like to keep things simple, clear, and easy to understand thus we all arrive at a common interpretation. I would say effective communication is one such value. With that come positive attitude and energy, trustworthiness, honesty, timeliness, accuracy, and well-roundedness. When we combine those values in someone who has the ability to provide an excellent customer experience, we are helping our customers create safe and comfortable environments for the people who use their facilities.

32

Loyalty Management LOYALTY360.ORG

If you were not doing what you do today, how would you spend your time? Thats an easy answer. My family is my greatest treasure and I am proud to say that my wife Susan is my best friend. If I were not into business, I would spend my time traveling around the world with Susan or having fun racing cars a passion that I have carried on through my life. Who has had the most influence on your professional life? Our team at Building Technologies really inspires me to be successful, and their passion is an important factor in my desire to excel. My wife, Susan, is also very important in my professional life. Spending the necessary quality time with our employees and customers really requires the support from my familyfamily is really the foundation for professional growth. I wouldnt be where I am today without the support of both my family and our team. Do you like to volunteer? What organizations or causes are you passionate about? I have a passion for giving back and volunteering is a wonderful way of doing it. I have been involved with several organizations for more than a decade, but one organization that drives my passion is Chicago Cares. They are dedicated to transforming Chicagos underserved neighborhoods and schools. Every time I volunteer, I leave the event with a high sense of satisfaction for what I have accomplished. It is also great to work with my colleagues and see

teamwork and relationships evolve. After a solid day of working in a school, for example, we know that our work will have a significant, positive impact on teachers , who dont have all the resources they need , and on students, who can go back to clean, organized, classrooms and libraries. Its uplifting. How do you measure success? That is pretty simple. Success is nothing else than exceeding measured objectives. My goal is to perform at the highest level possible, creating a good balance among employees satisfaction, customers loyalty and financial results. We rely on the employee survey results to get their feedback on how we perform, and measure customer loyalty through internal metrics. By achieving and exceeding our benchmarks, we can track and measure our financial results, which is an important gauge from a shareholder perspective. All three of those have to be at a level of high performance and in complete balance for us to be successful. Do you have any words of advice? My advice is to always master your basics before moving forward to the next level. It is that simple! L

Quick Fire Questions*


What is your favorite word? SIMPLICITY What is your least favorite word? PROCRASTINATION

The key is creating a balance of employee satisfaction, customer loyalty, and shareholder value.
hear more from siemens building technologies at the 3rd Annual 2013 Engagement & Experience Expo! We encourage you to join Linette Myland as she presents the Siemens Voice of the Customer Engineering Innovative Experiences session.

What turns you on creatively, spiritually, or emotionally?

DOING SOMETHING THAT HAS A MEASUREABLE IMPACT AND MAKES A DIFFERENCE

What turns you off?

a lot of talking without substance

What is your favorite (PG-13) curse word?

bs

what sound or noise do you love?

fast engines

what sound or noise do you hate?

small, barking dogs

what is your favorite flavor?

garlic

what is your least favorite flavor? if heaven exists, what would you like to hear god say when you arrive?

lime

well done

*Inspired by James Lipton on Inside the Actors Studio we asked Gregory to share his quick fire response to the questions originating from the French series, Bouillon de Culture hosted by Bernard Pivot.

1 2 3 4 5 6 7 8 9 10

Loyalty Management THIRD QUARTER 2013

33

TECHNOLOGY, TRENDS & REWARDS

Loyalty Innovation
vPromos makes existing debit and credit cards work like virtual punch cards with the vPunch Rewards program. Its a unique loyalty marketing program that allows merchants the opportunity to have their customers earn and redeem rewards in real-time, using their own debit and credit cards. The program is designed to help merchants identify, engage, motivate and reward consumers while increasing visit frequency, spending, online recommendations and referrals for their business. Consumer activity is automatically tracked and rewards are earned & redeemed in real-time through the use of consumers existing payment card. Customers are automatically engaged through Email, SMS Text messages and social media. Merchants have online access to program tools allowing them to create custom offers and invitations to increase sales and revenue.

Products, Advancements & Technologies

Synqera, a retail technology start-up, develops big data-driven technologies that bring the personalized online shopping experience to physical retail stores: creating a more compelling in-store experience for consumers, and greater customer loyalty and increased sales opportunities for retailers. Its software platform is the first intelligent retail technology to leverage a combination of Big Data and real-time customer response to viewed content. Synqeras software syncs the physical profile of each customer facing the sensorsenabled devices, data from the loyalty card, and actual shopping basket with the parameters of preliminary uploaded content. The software then creates rich visual media on the interactive in-store devices for each customers unique order, shopping tendencies and response rate, in real time. The content is not only responding to the best practices of movie and entertainment industries, but employs principles of gamification in how customers are engaged in-store. Optionally, this highly personalized content can be also delivered outside the store through mobile apps, SMS text messages, e-mail or web-site content customization all channels are managed via one Back Office interface. The Synqera technology allows multitasking solution: to increase the average customer profitability by offering targeted products based on automated analysis of the ever-growing customer database, to visualize loyalty program benefits, to promote affiliate programs and e-services, or simply make you customer smile with interactive engaging content. The marketing solution can be tailored to a companys needs and integrated with back-end infrastructures, such as CRM, ERP and POS systems, that can be used for personalized, interactive communications with the shopper.

Connect with Your Customers Where They Live To stand out in todays crowded marketplace, your communications need to include a personalized message targeted to the right person at the right time. Including personalization helps your message get through to the recipient, leading to greater customer engagement and increased response rates. Most importantly, personalization helps your most valued customers feel as though they matter to your organization. There are many ways to include personalization in your marketing campaigns and loyalty programs, but one of the most powerful ways is to visually connect your customer with your business. locr maps, the worlds leading provider of personalized maps and geolocation services, makes creating that level of connection possible. locr offers personalized maps that can be included in all forms of communications, including print, email, mobile, video, and personalized

URLs. These maps graphically outline the route a customer would take to get from their location to the location of a business, an event, and can even highlight multiple locations where your customer can engage with your business. Including these personalized, detailed maps within your marketing campaign enables you to create an emotional connection with your audience. Customers literally visualize themselves visiting a business or location, seeing how they would get from their own location to yours. In addition to supporting successful marketing campaigns, this type of personalization is a critical part of maintaining a valued connection with your customers. It conveys a deep relationship; you know where the customer is, and can help them find where they are going. To learn more about locr, visit the companys website.

Boxever The Customers Loyalty Programme Use Big Data to turn loyalty on its head - the Boxever Platform allows travel companies to enhance the customer experience, making rewards personally meaningful and encouraging loyalty in unique and inspiring ways. The major advantage for loyalty management is that customers are not required to log in. Traditional, Regional and Low-Cost airlines are using Boxever to understand their customers and provide a personalised customer experience. Understanding customer lifetime value and combining that with other factors such as purchase history and shopping behaviours enables Boxever to inform your e-commerce merchandising engines how best to incentivise your customer. For example, high value customers can be offered discounts or upgrades depending on their past purchase history.

Boxever removes the need to track loyalty points or numbers as it is able to aggregate real-time customer data across multichannels and devices into an individual profile that identifies the customer spend, searches, products purchased and customers lifetime value. You can segment each customer or visitor to offer them a personalised experience their very own website or email with relevant loyalty offers that will excite and create a stronger, more profitable customer relationship. Launched last October, Boxever is taking the travel industry by storm. The innovative platform has been specifically designed for travel-specific data and understands the intricacies of pricing, availability, channels, touch-points and loyalty management. For those interested in learning more about Boxever, visit www.boxever.com or contact us directly hello@boxever.com.

EYEQINSIGHTS: Loyalty Centers Make the Physical Store the Bright Spot of Loyalty Insights For many retailers, the physical store is the black hole of customer insights. Loyalty programs may be able to combine insights of online behavior and purchases in-store, but what about behavior in-store? Knowing what your customers bought is a good thing - knowing what they almost bought is pure gold. eyeQInsights fills this gap and creates an enhanced in-store shopping experience for loyalty members to boot. eyeQInsights Loyalty Centers are highly engaging touch-screen tablets that invite loyalty members into special shopping experiences that give them access to the best deals and objective product information about products in the physical store. It also helps the loyalty program to collect or validate key information visits to any store location, age, gender, dwell time, and in-store location browsing history. It even recognizes sentiment. Imagine

tapping into the current emotional mindset of a loyal shopper and understanding which message will motivate him or her best at that moment. eyeQInsights utilizes proprietary customer-learning technology to determine individual customer characteristics and browsing patterns in-store. Loyalty members receive personalized messaging and real-time individualized promotions relevant to the products they desire through the interactive displays. This provides brick-andmortar retailers an even greater level of customer intelligence and engagement than online. Retailers providing this unique Hybrid In-Person / On-Line (HIPOL) shopping experience gain hyper-targeting abilities and increased recruitment of loyalty customers, and their loyalty customers gain an outstanding personalized shopping experience. The physical store with eyeQInsights Loyalty Center can truly be the bright spot of loyalty insights and growth instead of the black hole.

LOYALTY FORUM: Trending Now

Trending NOW
The recent focus on big data and new technologies has led some brands to emphasize the importance of creating emotional connections with consumers. Every touch point we make is tied to an emotional connection. Yes, we consider facts as well, such as price, features and functionality, but our emotional minds are always pulling the strings behind the scene. The most successful brands understand the power of emotion and can effectively create a shared purpose with customers, often by using big data and new technologies to inform how and where to apply the emotional appeal.

EMOTIONAL CONNECTIONS WITH CUSTOMERS

Brands to check out:

Dove Real Beauty Sketches GE Agent of Good Verizon Powerful Answers

A consumer- and marketer-driven loyalty evolution is currently underway. Consumers are asking for loyalty programs that are more flexible, real-time, seamless and personal. Marketers are grappling to understand how to create loyalty initiatives built on vast amounts of customer data from disparate data sets, using new technologies that are often unproven. Marketers are under pressure to utilize the new technological and data applications at hand, but in a way that appeals to both consumers and shareholder bottom line. Costs, privacy concerns and organizational changes are also a top concern. Brands who are able to bridge the gap by appealing to customers while quelling bottom line concerns will come out on top.

LOYALTY EVOLUTION

Whos leading the way?

Wendys ESPN MTV

The ability to capture and mine customer feedback shared on social media and other communication channels is making it easier than ever for brands to utilize voice of the customer across all points of the purchase funnel and product life cycle. Brands like The Container Store and SAS have transformed their businesses by building consumer insights programs that inform product innovation and R&D, in-store and online merchandising, and optimized marketing communications. A number of brands have recently used voice of the customer to determine product names and features, including Nissans initiative that asked its social community to suggest technology to be included in an upcoming car design.

PRODUCT DRIVEN BY VOICE OF THE CUSTOMER

Brands leveraging VoC to enhance their product offering:

The Container Store Nissan SAS

36

Loyalty Management LOYALTY360.ORG

Reward Loyalty with Luxury

Rymax will take your corporate gifting needs to the next level and leave a lasting impression on your business partners and employees. With merchandise from over 300 brand names, at price points to fit every budget, no order minimums and fast and reliable shipping guaranteed, Rymax will fulfill all of your corporate gifting needs. We have the perfect gift to inspire, motivate and engage.

These and thousands more gifts available through Rymax:

Contact us for thousands more reward choices!


www.rymaxinc.com/L360 1.866.684.1174
Copyright 2013 Rymax Marketing Services, Inc. All rights reserved.

FOREVER BETTER

TECHNOLOGY, TRENDS & REWARDS

Customer Experience
Chuck Christianson
Connexions Loyalty
Were entrenched in the experience economy consumers expect experiences that meet them wherever they are. For marketers, there are four critical elements inherent in any good customer experience:

The 4 Ps of

people, products, purpose and passion.


People How likely are people to recommend your brand? This question is the foundation of a brands Net Promoter Score (NPS), a loyalty metric that measures a companys promoters, passives and detractors. According to Jim Bush, American Express EVP of world service, For every servicing transaction, we ask, How can we get the customer to feel better about American Express and recommend it to a friend? Thats a promoter. For a promoter who is positive on American Express, we see a 10 percent to 15 percent increase in spending and four to five times increased retention, both of which drive shareholder value. While NPS is a great tool, the original notion of a promoter may need updating. We all know that what people say and what they do can be two different things. And, in the age of social media, an active approach is key. Now consider the concept of defenders. Defenders are active on social media sitesthey dont wait for you to invite themthey proactively talk about your business, correcting negative comments and amplifying positive ones. So how important are these advocates to your bottom line? In surveys of the U.S. banking industry, for example, those in the attractive affluent segment rank as the least satisfied with their principal bank. Yet, a Bain & Company analysis shows that a loyal affluent consumer is worth nearly 3.5 times more than an average one. Do you know how likely customers are to recommend your brand? Products How do you create products that are thoughtful in design, peerless in quality and disappear into the experience? The founder of Twitter, Jack Dorsey, asked his team to think about the Golden Gate Bridge. Why? As Jack Dorsey said in a recent interview with 60 Minutes, Because we see the bridge as a perfect intersection between art and engineering. It has pure utility, in that people commute on it every single day. But commuters dont think about how it functions. They admire its simplicity and beauty. So think for a moment: what is your Golden Gate Bridge? Dorsey equates the bridge to technology. When people come to Twitter and they want to express something to the world, the technology fades away. Its them writing a simple message and them knowing that people are going to see it it disappears because its so intuitive. It just works. Connexions Loyaltys client loyalty sites have seen a staggering 225 percent YOY growth in visits from mobile devices. Seventy-five percent of those mobile visitors are using a tablet to access the site. The majority of users are accessing the site from 6pm to midnight, meaning that many of them are multi-taskingsitting on their couches, watching TV and surfing around on their iPads. And, surprisingly, 32 percent of mobile visitors are visiting the site daily. Those are engaged users! Likewise, how seamlessly will your next product blend into the experience of your customers?

38

Loyalty Management LOYALTY360.ORG

Purpose How do you empower customers to stay engaged? Given the financial risk involved in negative customer experiences, theres no surprise that this is factoring into executive level business strategies. According to the Global Insights on Succeeding in the Customer Experience Era from Oracle, 97 percent of executives agree that delivering a great customer experience is critical to business advantage and results and, the average potential revenue loss for not offering a positive, consistent and brand-relevant customer experience is 20 percent of annual revenue. Relieving pain points for your customers is critical to your purpose as an organization. When it comes to air travel, people complain about all kinds of things, from mechanical delays to unaccompanied children running in the airplane aisles. Supported by Connexions Loyaltys MotivEngine product, a major airlines customers who experience non-weather related travel issues are compensated for their trouble by the brands customer care associates. The program features 66 segments based on a flyers travel status, from super-frequent flyers to the most infrequent passengers. The compensation comes in the form of gift cards and digital goods. The initial results are very positive: after launching the program in November 2012, the airline

Passion Finally, how do you create mutual ambassadorship with your customers, resulting in their lasting loyalty? Customers care about giving back. According to the 2012 Edelman goodpurpose Study, 72 percent say theyd recommend a brand that supports a good causean astounding 39 percent increase since 2008. Theres a dramatic acceptance of companies doing well while doing good. USA Today coined the phrase, kindness is becoming the nations newest currency and you can see why. That same Edelman study noted that 47 percent of consumers say they buy, every month, at least one brand that supports a good cause. Thats a 47 percent increase from 2010. A growing number of companies have experienced success related to their kindness. For example, with every pair of shoes purchased, TOMS gives a pair to a child in need. The name TOMS is derived from the word tomorrow, a reference to their mantra of shoes for a better tomorrow. Shoes positively impact health, which facilitates education and opportunity for children. Thanks to their customers, TOMS has given more than 2 million pairs of shoes to children in need around the world. In similar fashion, Warby Parker provides eyewear with a purpose. Almost one billion people worldwide lack access to glasses. Without glasses, people cant learn or work as well. For every pair of glasses sold, Warby Parker plans to distribute a pair to someone in need, and has given more than 250,000 pairs to date. Now think about your up-and-coming audience. The 95 million Americans categorized as Millennials (those born between 1982 and 2004) are tech savvy as well as socially and politically progressive. As USA Today notes, they live and breathe social media and are broadly convinced that doing the right thing isnt just vogue, but mandatoryit has to come from within.

Do You know Your

promoters, passives and detractors?


The Incenter of Loyalty: Bringing it all together You may remember from high school geometry the incenter, the point where the angles of a triangle intersect at the center of the inscribed circle. That circle and that point are the center of loyalty its where it all comes together: people, products, purpose and passion. Bringing these elements together to incentivize customers creates memorable experience for them, which become the incentivizer, or better yet, the incenter of loyalty. L

more than doubled their use of this tool as compared to the first eight weeks. And, 73 percent of consumers who have received a gift code have used the offer. Smart companies today are asking themselves how they are removing pain points and keeping their customers engaged.

Because the job market is soft, more college graduates have chosen to pursue higher education. In fact, the number of people enrolled in higher education increased by 26 percent from 2007-2012. Thats 193 million people. Once they acquire these higher degrees, Millennials will emerge as the new leaders in global spending. Is your company positioned to do well by doing good as you align with the next generation of spending leaders?

Loyalty Management THIRD QUARTER 2013

39

TECHNOLOGY, TRENDS & REWARDS

Customer-Centricity:
an FI Imperative in a Competitive Banking Universe

Rami El-Zeini
Aimia

T
PER SO N

hanks to a slow-growth economy, competitive pressures, and regulatory challenges, getting closer to customers is a must for todays banks. The financial crisis that came to a head five years ago eroded consumer trust and movement towards a customer-centric mindset is a clear step banks can take to rebuild that trust. Customer-centric marketing simultaneously helps banks retain their best clients while also driving multiple product relationships to increase their lifetime value.
In fact, many large issuers are now discussing how to improve the customer experience, simplify the banking process, and create greater customer loyaltyall in a focused attempt to regain and build trust. But moving away from a product-focused mindset towards true customer-centricity, while still remaining profitable and cost-effective in a regulation-heavy environment, is a challenge even for the biggest and boldest banks. The Power of Personalization The rise of card-linked offers is a great example of how banks are extending their ability to get closer to customers. New tools and platforms allow banks to use a cardholders transaction data in real time, or near real time, to provide relevant, targeted offers that enhance the value proposition for consumers. These personalized offers, discounts and dealssome of which are available at point of saleare a simple yet powerful way to deliver value that not only creates an emotional connection with consumers, but also provides an immediate, tangible improvement in the customer experience. Bank of Americas BankAmeriDeals, for example, has enjoyed success here. Cardholders register their Bank of America debit or credit cards with the program, which offers cash-back deals in online banking statements based on cardholders actual transactions. For example, if a cardholder buys a tall soy latte at their favorite coffee shop every Monday, a discount offer

TION IZA L A

EARL YE N

ENT GEM GA

ICE CHO ER

Increase Personalization Boost Early Engagement Improved Choice and Control

CUST OM E

So, how can FIs adopt customer-centric marketing? For many banks, its about going back to basics: That is, leveraging existing data to create more meaningful connections with customers. Banks have long been in the enviable position of possessing tremendous amounts of powerful and predictive data. But while weve always been well aware of the potential insight locked within these data assets, effectively harnessing the data to build better relationships has been difficult. Now, however, technological advancements in analytics and data-driven loyalty are allowing FIs to increase personalization, boost early engagement, and offer improved choice and controlelements that can take customercentricity to new heights.

40

Loyalty Management LOYALTY360.ORG

TROL ON RC

CUS TO M

Financial institutions that stake their claim in the mobile frontier with such customer-centric applications can build sustainable, profitable, and reciprocal relationships with their best customers.

off their next coffee purchase is a highlyrelevant, personalized offermuch more so, than, say, a random offer for a spa treatment he may never use, or a magazine subscription for a publication he is unlikely to read. Easier Early Engagement Banks have altered their popular loyalty card programs to offer more immediate value and connect with customers earlier on in their lifecycle. Consumers who redeem their loyalty points, particularly those who redeem early in the relationship, stay longer and spend more on their cards. FIs are now constructing their programs to make it much easier to begin the redemption process, offering low-cost redemption items such as digital downloads and low-dollar-value gift certificates to get customers engaged early and often with the brand and program. PNC Points, the loyalty program of PNC Bank, is a perfect example of these efforts. Thanks to the wide variety of relevant pointsbased offers for everyday purchases baked into the program, cardholders can either cash in often for small treats, or save up for larger travel or electronics rewards. More Consumer Choice and Control Thanks to the wealth of financial service options and comparative information available today, consumers hold more power in their day-to-day banking relationships than ever before. Banks are under tremendous pressure to provide their customers with more options, such as more self-service tools in online and mobile banking spaces. Those FIs that continually innovate to give consumers more choice and control over their banking interactions will win. New mobile banking applications, peer-topeer mobile payments, mobile check deposits, and QR code applications are just the start of the coming revolution in FI technology designed to meet the growing consumer demand to conduct financial relationships on their terms. Chases QuickPay program, in

which customers can send money to nearly anyone using their email address or mobile number, as well as Chases Mobile Deposit option, are good examples of a bank increasing choice and control for their customers. Bankings Customer-Centric Future Thanks to the explosion of smartphone and tablet ownership in the US, mobile banking adoption continues to rise dramatically. Today, the majority of mobile transactions are made up of checking balances, fund transfers, and online bill pay. Tomorrow, the potential of mobile to play an even greater role in banking interactions will increase exponentially especially with the development of mobile wallet applications. Financial institutions that stake their claim in the mobile frontier with such customer-centric applications can build sustainable, profitable, and reciprocal relationships with their best customers. Nor are social banking applications far behind. Privacy and regulatory issues still force FIs into more traditional forms of communication, with a resulting lag behind the sexier social media efforts in the travel and retail industries. But some banks are dipping their toes in the social waters. While often unstructured, social data is still an enticing piece of the puzzle that can help marketers connect engagement data with transactions. Marketers can use social information to add better context to consumer behavior, and

also to increase timeliness, thereby enhancing relationships through real-time interactions underpinned by customer permission and trust. As banks continue on their journey towards richer, deeper customer relationships, theyll continue to look for ways to better harness and use existing data. Theyll also continue to experiment with new technology that improves and simplifies the customer experience while forging stronger emotional bonds. By embracing customer-centricity, FIs can regain the consumer confidence they lost in the financial meltdown. The rewards are there for the taking: incremental value, sustainable loyalty, and greater customer lifetime value. L

Rami El-Zeini leads Aimias US business development efforts in the financial services space. An industry veteran, with over 15 years of experience serving Fortune 500 companies, Rami has a proven track record helping clients design, build and manage impactful loyalty solutions.

Loyalty Management THIRD QUARTER 2013

41

TECHNOLOGY, TRENDS & REWARDS

Engaged Customer is at the Center of


Jim Tierney
Loyalty360 In the wake of an undeniably harsh recent company timeline, marked by questionable vehicle quality, market share declines, financial losses -- and finally a 2009 bankruptcy and federal bailout General Motors could have swiftly retreated and taken cover from fiscal and perceptional vicissitudes. But, the venerable automaker has shifted gears and its companywide mindset -- toward a laser focus on the customer, customer engagement, and the customer experience. General Motors wants the customer to be the focal point of its business model so much so that it changed the name of its call centers to Customer Engagement Centers. GMs new Customer Engagement Centers are designed to improve the overall customer experience by reaching out to new owners to answer questions and resolve issues. GM hopes to funnel data collected at the Centers to its designers and engineers to capture the voice of the customer and to enhance further improvements in vehicle programs.

NEW GM BUSINESS MODEL


C u s t o me r E n g a g eme n t Ce n te r s

Susan Waun, a member of GMs Global Communications team, told Loyalty 360 that the name change to Customer Engagement Centers reflects the companys goal to provide the best overall customer experience in the industry. We are taking a more proactive approach with our customers on their terms, Waun said. GM is transforming into a customer-centric company. To create a positive and lasting impact on customers and ultimately drive loyalty, relationships, and support needs to extend beyond the point of sale. We consider every contact with our customers as a huge opportunity. In the Customer Engagement Centers, Waun said, When a customer contacts us for assistance, were eliminating the escalation process where a customer might be passed to another representative. Instead, our customers will communicate with well-trained advisers who are enabled to make decisions. Another difference between the former call centers and the new Customer Engagement Centers is GMs proactive social media team, which is heavily involved in Facebook, Twitter, and popular online vehicle forums. These are specially trained advisers monitoring the web and reaching out to customers to offer assistance, Waun said. We interact and assist our customers using the type of communication channels they prefer, including online chats, social media forums, email, and phone. We believe we are leading the industry with our social media team, which handles more than 9,000 unique interactions per month.

42

Loyalty Management LOYALTY360.ORG

A transition to fast, competent, and proactive engagement with customers goes above and beyond a simple name change, Waun said. This is about providing an industry-leading overall experience to our customers as we practice with our new infotainment systems: Chevrolet MyLink, Buick and GMCs IntelliLink and the Cadillac CUE. We just expanded our Connected Customer Specialist team. The main job of these 50 specialists is to train tech savvy GM dealership employees so they can help customers to get the most out of their state-of-the-art infotainment systems.

E me r g i n g Wit h Re n e w e d Vi g o r

General Motors emerged from that onerous stretch with renewed vigor, enthusiastic senior leadership guiding that journey, and a fervent hope that it can reach that mountaintop again in the automobile industry. And for the first time, General Motors was named the car company with the best quality according to the J.D. Power & Associates annual automotive survey released in June. After GM discontinued the Hummer, Saturn, Pontiac, and Saab brands, the new General Motors Company retained four of its major brands: Chevrolet, Cadillac, GMC, and Buick. It kept 3,600 of its 6,000 U.S. dealerships. When GM filed for a government-assisted Chapter 11 bankruptcy protection in June 2009, the company reported $82.29 billion in assets. Jim Moloney, General Director, Customer and Relationship Services, for General Motors Company, is incredibly enthusiastic about the companys new direction.

But Moloney cant deny the challenges facing GM, many of which involve changing the customer mindset about the brand. We have discontinued brands, so we have some things working against us and those customers are in the open market, he said. We disappointed them with some decisions we had to make. We need to ensure theyre still being communicated with by the company, and were delivering this incredible new portfolio we have to launch.
1 5 , 0 0 0 P h o n e C a l l s / E m a i l s P e r D ay

We have incredible leadership driving massive change across the organization,

Any time a customer or dealer calls looking for assistance, we have a variety of special groups that handle calls, social media interactions, chats, and emails, Moloney told Loyalty 360. I can honestly say Im incredibly bullish on the focus were putting on the customer. In the contact center, were shifting our beliefs. We were running contact centers as cost driven complaint departments. Now, its much more centered around an engagement opportunity. Customers have reached out to us and want more information, so how do we turn those things into much more positive interactions? Moloney added: We believe these interactions foster a relationship that maybe we didnt pay enough attention to in the past. Its competitive in this category and we cant afford to lose a single customer and thats continuing to permeate our mindset.

We interact with a significant number of customers per day, Moloney explained. How do we ensure that these interactions are positive ones? How do we make sure were reinforcing the journey of the customer, the customer experience? Weve been at it for awhile and continue to build on that momentum. Were in the early stages of a more seamless and integrated approach to customer management. Now how do we get the marketing divisions/contact centers/ lifecycle management people all pulling the rope in the same direction? They are all important enablers. In the contact center, Moloney said: Were moving away from passive to how do we use proactive marketing, proactive customer engagement tactics whether its driven by business rules or advanced analytics. Were on that journey and are becoming more integrated than we ever have.
J. D. P o w e r T o p Q u alit y Ra n k i n g

For the first time, General Motors was named the car company with the best quality according to the J.D. Power & Associates annual automotive survey released in June a particularly encouraging vote of confidence in GMs resurgence. The J.D. Power scores were positive, but we have to stay humble, Moloney said. Were also dealing with a whole generation that wouldnt cast an eye on our products and how do we get them connected?
Continued on page 44

Loyalty Management THIRD QUARTER 2013

43

TECHNOLOGY, TRENDS & REWARDS


New GM Business Model continued...

In the contact center were moving away from passive to how do we use proactive marketing, proactive customer engagement tactics whether its driven by business rules or advanced analytics.

Were on that journey and are becoming more integrated than we ever have.
In taking the product and the experience to the next level we need to have excellence and we need to have leadership and this company is committed to make that a reality, he said. Manufacturers that truly have a network aligned with them will be at a competitive advantage. GM has made a pretty solid investment in that space. Theres a realization we have to move beyond where we are today and make sure were truly listening to the voice of the customer. We want to create true advocates for our brands, our products, and our dealers. Moloney wants to transform those satisfied customers into brand advocates so theyre out there on Facebook and Twitter and on all the forums, telling friends how proud they are of GM products. Increasingly, Im cautiously optimistic that were back in the conversation, he said.
B r o k e n M o d el

I n c r e d i b le L ea d e r s h i p

Moloney pointed to the recent promotion of Alicia Boler-Davis to Vice President of Global Quality and Global Customer Experience as a prime example of GMs company mindset shift directly toward and for the customer. We have incredible leadership driving massive change across the organization, Moloney said. Its the first time we put those two giant silos together. She sees opportunities that, quite frankly, we have ignored. Were also gathering data that spilled all over the company in many ways, and have started to consolidate it so we have a better lens. We get a pulse every day and theyre tapping into us.
E v e ryo n e i s B u y i n g I n

That corporate culture tunnel vision focusing on a customer-centric approach has permeated GM from the top to bottom as the company strides toward a return to respectability and credibility. Its truly a tuned-in customer experience organization, Moloney said. You cant ignore the folks who are having such rich interactions. Recently, we had a social media push and now we have our social media employees working beside marketing and public relations in a new way of collaborating around the customer. Its incredibly exciting to be part of this transformation taking place.
H o w D o Yo u C h a n g e Relati o n s h i p s Bet w ee n Deale r s a n d P r o s p e c ti v e B u y e r s ?

The GM model of old was so broken, Moloney explained. If you looked at supply and demand, we were desperate for many years to keep factories running and make sure our obligations were met. We got into unhealthy relationships with our dealers and partners. It was a death spiral where no one was making any money and we werent rewarding the right behaviors.
See k i n g a Ret u r n t o t h e B r i g h t L i g h t s

Moloney wont hide his ultimate goal. The level of technology and innovation in these products nowadays is mind-blowing and I dont think youll see that let up, he said. Were in an arms race across the category. Weve had a major transformation of our contact center and Ill put our efforts up against anybody. When we get our act together, were pretty formidable. I like the way were marching. When you go through the dark days we did, frankly, we want to put points on the board and do the right things for our customers, Moloney added. Were fortunate we have a second chance. With smart people and resources, why cant we be earning the same accolades as others? I want to see GM in those bright lights. L

Everybodys appetite for change got a tuneup coming out of bankruptcy, Moloney reflected. If we go back to the same place that got us in such trouble, wed be back in a bad way. The willingness to change has been very much in the open and different than pre-bankruptcy. With new personnel coming in, it was a challenge all around us. But weve started to build momentum around initiatives such as Chevrolets significant partnership (renewed long-term partnership in January 2012) with Disney. We can use tools and learnings from Disney and apply them to GMs brands. At the end of the day, our dealers have to be the heroes. Theyre the ones consummating the deal with the customers.
We r e Ba c k i n t h e C o n v e r s ati o n

Moloney cant contain his excitement about what the future could have in store for GM.

44

Loyalty Management LOYALTY360.ORG

TECHNOLOGY, TRENDS & REWARDS

Re-Imagining Membership/Loyalty
for Sports and Entertainment Venues
Larry Witherspoon
Alvarado

The Cleveland Cavaliers and Quicken Loans Arena Clevelands Quicken Loans Arena, The Q, hosts over 200 events a year and is home to the NBAs Cleveland Cavaliers, the AHL Lake Erie Monsters and the AFL Cleveland Gladiators. Like many other professional sports organizations, the Cavs were looking to increase ticket sales and drive attendance to a variety of events held at the arena. Although they already had powerful ticketing and CRM systems in place, the Cavaliers were also considering other tools and technologies that could help them continue to build and incentivize their fan base. In 2011, the Cavaliers organization decided to explore a stored value payment system as the basis for a new membership/loyalty program that could be introduced to their fans, with the overall goals of increasing ticket sales and revenue. Because such systems typically require integration with both ticketing and POS systems, it was important that the solution chosen be compatible with their existing systems and infrastructure. It was also important for the Cavs to have a system that would allow them to roll out a limited program that could be fine-tuned first, and then add features as needed. Initial Launch of the Program After a recommendation from the teams ticketing company, Veritix, Inc., the Cavaliers implemented Alvarados VenueView360

Membership/Loyalty Platform in 2012. Initially, the Cavs implemented the platforms stored value ticket module which allows the loading of value to be associated with a tickets barcode. Fans could present the tickets at concessions and retail point-of-sale registers to redeem the stored value as payment. This made the redemption of stored value convenient for both the fans and arena, and created an overall positive experience. Initially, these loaded tickets were used to incentivize group ticket sales, sweetening deals by adding $5 or $10 of expiring stored value to a ticket, good for use up until the end of the ticketed event. Later, the Cavs also sold a limited number of single game tickets with added stored value. According to Kevin OToole, Cavaliers Senior Director, Business Intelligence, The value on the tickets was quick and easy for our fans to redeem. The platform helped us with group sales efforts, and also allowed us to tailor special loaded ticket offers for specific games. When asked about the overall impact of the program after one full season, OToole felt the Cavs had gained a deeper understanding of what drives ticket purchase behavior, as well as a deeper understanding of how customers spend money while in the arena. While not divulging specific numbers, he did reveal that the Cavs definitely saw a substantial impact to their revenue as a result of the program.

Cavaliers, Empower Wine & Gold United Members For the upcoming 2013-2014 season, the Cavs plan to roll out perks for Wine and Gold United members, the teams new season ticket membership program, rewarding members with a lump sum bonus of stored value dollars that are tied to their personal account. The dollar amount of stored value awarded is based on how early membership packages are purchased or renewed. The stored value is tied to the members account, and doesnt expire, so it can be redeemed at any event during the season by presenting an individual ticket for scanning at the register during purchase of concessions or retail merchandise. The Cavaliers new stored value rewards program is being branded as Q-Bucks, with Wine and Gold United members managing their rewards through an online member portal powered by VenueView360. The branded portal, which is customized to have the look and feel of Quicken Loans Arenas website, allows members to control which tickets can be used to redeem Q-Bucks, including setting redemption limits or excluding specific tickets, making it easier to safely share the tickets and rewards with family, friends and business partners. Additional account stored value can also be securely purchased from the member portal.

46

Loyalty Management LOYALTY360.ORG

Cavaliers: Looking Toward the Future / Advice for Other Organizations With season one under their belt, and a highly anticipated new season on the way, the Cavaliers are looking forward to growing their membership program and continuing to generate even more excitement for fans at The Q. When asked what advice he would give to someone contemplating creation of a membership/loyalty program, OToole shared his thoughts. Consider the long term vision when making initial investments. Having a system that can grow and change with your business needs is critical to the long term success of a program. For us that meant starting with the stored value capabilities to improve the customer experience of attending an event at The Q. We will consider loyalty, couponing and other features as we move forward, but getting the initial implementation done right was very important to us. L

that can grow and change with your business needs is critical to the long term success of a program.

Having a system

Larry Witherspoon is the President of Sports and Entertainment for Alvarado. He was previously the CEO of Tickets.com and VP of Technology for the Seattle Mariners. He has an EMBA from the University of Washington in Technology and Management.

Loyalty Management THIRD QUARTER 2013

47

BEST PRACTICES

THE KEY TO PERSONALIZING EACH CUSTOMERS LOYALTY EXPERIENCE?

BUSINESS INTELLIGENCE
Michael Hemsey
Kobie Marketing

ACTING ON

alk into a Kroger supermarket and you might be surprised by what you see: advertisements promoting individualized pricing linked to loyalty program membership. Its a business intelligence strategy thats been gaining traction for several months since the grocery chains pilot pricing program launch last summer and I expect its popularity (and rising acceptance by skeptical consumers) will continue. According to a recent Loyalty Report, Kroger Rewards was the grocery sectors most popular loyalty program, with an 83% overall satisfaction rating.
Why the success? Because individualized pricing isnt just about strict discounts and points-for-rewards stereotypes. Its about enhancing the customer experience and eliciting lifetime customer value. Kroger bases its individualized pricing on past purchases and what customers have typically spent. The result is a sense of brand loyalty that far exceeds what you could achieve with something as simple as weekly cutout coupons sent in the mail or similarly generic offers via email or other channels. In other words, Kroger is taking loyalty to the next experience-driven level, demonstrating to its customers through clear and transparent actions that this company has taken the time and effort to get to know me. Individualized pricing, however, is just the beginning. A growing number of brands across different verticals (most noticeably in financial services and retail) are upping their loyalty game by trumpeting the value of individualized experiences over just discounts and deals. This is known as transactional loyalty. While remaining a bulwark of loyalty program engagement, transactional loyalty is often a simpler consumer behavior modification model thats costlier to implement. Contrast that with experience-driven loyalty: a consumer engagement model built on psychographic triggers and status that strives to make an emotional connection with loyalty program members, building a sense of reciprocity along the way. Brands would be wise to adopt the tenets of experience-driven loyalty, and heres why:

that fail to engage their increasingly experience-driven (and tech savvy) customers risk loyalty program membership fall off or non-engagement.

Brands

Competition
undermines existing loyalty outreach. Thus, if your brand isnt exploring new ways to drive innovative customer experiences, you can be certain a competitor is.

Aggressive rival brand

landscape is at a critical crossroads and stellar programs are essential in order to prevent loyalty program backlash.

Loyalty

Data suggests the

48

Loyalty Management LOYALTY360.ORG

...turn customer insights into genuine, consistent and customized experiences that drive optimum engagement...
The last bullet point deserves further emphasis as the latest Colloquy data shows something of a mixed bag for loyalty program popularity. While overall loyalty program membership has risen 27% from 2010, only 44% of survey respondents were actually engaged in any one of their approximately 21.9 memberships per household. Thats a decrease of 4.3%. And while it may not sound like a lot, a 2.2% annual slide amounts to approximately 10% drops every five years. The point: a disengaged loyalty program subset is as toxic to the programs overall health as is outright non-membership. Chase-ing Rewards and Zapping Up Loyalty: Two (Additional) Brands Promoting A+ Loyalty Beyond innovative grocery chains, Colloquys study found that Chase and its Chase Ultimate Rewards loyalty program led the financial services industry with an 84% approval rating while Kohls and Kohls Rewards snagged the top spot in retail at 73% approval. A quick visit to Chases website illustrates exactly why they remain a financial services category winner. Two of the Chase Ultimate Rewards subcategories, Experiences and Travel, make up 40% of the entirety of the Chases rewards framework. In terms of experiences, Chase members can enjoy a selection of perks including VIP access to concerts, wine tastings, movie premieres and sporting events. Best of all is that these experience-driven rewards are based on consumer preferences gleaned from the business intelligence gathered from todays omnichannel and omni-empowered loyalty member. That means customer outreach across all channels. But omnichannel loyalty, an enterprise-level initiative to drive, track, measure and reward incremental behavior throughout the enterprise and customer experience, isnt just about channel preference. Its also about ensuring that at each step throughout the purchasing continuum, consumers feel engaged with a brand and that rewards have been tailored specifically to their wants and needs. While Kohls was the focus of the study I mentioned earlier, I also want to mention Zappos.com, the online shoe and apparel retailer. After a recent purchase of hiking shoes, I noticed the emails I was receiving from the etailer changed. Rather than generic offerings that could easily end up in my junk mail or being deleted, Zappos looked at my purchasing history and adjusted its offers accordingly. Instead of sending more shoe offers, Zappos deduced that the kind of hiking shoes I purchased is indicative of inland outdoor activities and not a lazy day at the beach. As such, Ive received offers for camping gear and other outdoorLoyalty Management THIRD QUARTER 2013

related products. Whats interesting is that none of Zappos engagement required loyalty program membership as such tactics have become central to the companys DNA and brand promise. Internally, Zappos calls its customer engagement its WOW philosophy. I cant speak for Zappos other customers but this customer is definitely wowed. Taking the Pulse of the Customer Experience As consumers interact with their smartphones and tablets browsing the Web, sharing recent purchase information or brand likes or dislikes on social media, swiping and tapping on apps they create a digital information trail that reveals individual preferences. Just as physicians gauge patients health through blood tests and blood pressure measurement loyalty program managers, whether in retail, financial services, or any other consumer-facing vertical, need to take their customers pulse albeit while respecting consumer privacy while seeking opt-in engagement. This means implementing solutions that collect and analyze valuable information so it can be turned into actionable business intelligence that dictates how each customer is approached and engaged with offers and experiences that are relevant, timely and add value. For loyalty marketers, the tools to create individuallytailored customer experiences that seamlessly cut across all channels and draw customers attention and repeat business are easily accessible. With so many loyalty programs competing for consumers attention and the positive long-term consumer perceptions of loyalty program effectiveness at risk, brands need to offer something more than the stereotypical points-forrewards model. When they turn customer insights into genuine, consistent and customized experiences that drive optimum engagement, brands stand a much better chance of creating a strong base of satisfied customers and brand advocates who keep coming back again and again maybe even for life. L

As President of Kobie Marketing, Michael is responsible for leading all facets of the loyalty marketing organization including business development, IT initiatives, client services, as well as the overall direction of the Kobie brand. For 20 years, Michael has cultivated a rich background in client services, product development, marketing, technology and operations through several key posts.

49

LOYALTY FORUM: BOOKS

Loyalty Reads
Power : How J.D. Power III Became the Auto Industrys Advisor, Confessor, and Eyewitness to History
Sarah Morgans & Bill Thorness
Fenwick Publishing Group, Inc. | September 2013

Young market researcher Dave Power founded J.D. Power and Associates in 1968, a year when revolutionary cultural and political changes abounded. Powers efforts to help the auto industry understand the value of listening directly to the voice of the customerthe unalloyed preferences, complaints, and kudos collected from the drivers themselvesproved to be revolutionary as well. His mission to help companies improve overall customer satisfaction would not only change how the auto industry operated; it affected the way nearly every manufacturing and service industry sought out and responded to customer feedback.

POWER: How J.D. Power III Became the Auto Industrys Adviser, Confessor, and Eyewitness to History features Powers recollections, as well as the perspectives of those who worked most closely with him, providing compelling insights into the auto industry as well as the inspiring creation of one of the worlds most respected, influential, and independent consumer organizations. Publication date is Sept. 10, 2013. The book will be available at Barnes & Noble stores, independent bookstores across the U.S. and on Amazon as well as other major online booksellers.

EXPO ATTENDEES WILL RECEIVE A COPY OF POWER: How J.D. Power III Became the Auto Industrys Advisor, Confessor, and Eyewitness to History
Hear more from j.d. power as he presents the keynote speech at the 3rd Annual 2013 Engagement & Experience Expo!

Compliments of Loyalty360

Laddering: Unlocking the Potential of Consumer Behavior


Eric V. Holtzclaw
Wiley | July 2013

Marketing and product development best practices for a fragmented economy

Use Laddering techniques to map your customers DNA and understand why consumers buy from you.

The rules for marketing and product development have Helps you look at your customers in a new way and as changed forever. You no longer control where and how a result maximize your profits and reduce your consumers receive marketing messages. The consumer is support costs. in charge, with ever-growing choices and a shrinking deci Provides a framework for evaluating what marketing sion window. Therefore, it is crucial to understand what messages, campaigns and experiences are appropriate. drives customer behavior to design products, marketing, and experiences that will succeed. Laddering explains how You must understand what is truly important in to better understand your customers core values. Learn to order to build relationships with consumers and ask the right questions from your customers, use it to to market for success in the new many-to-many analyze your data, and unlock the true potential of your economy. Laddering offers the tools and product or service. knowledge you need to thrive. Author Eric V. Holtzclaw is CEO and founder of User Insight, a user experience research firm and Laddering Works, a marketing strategy and consulting firm. His weekly radio show, The Better You Project, shines a spotlight on entrepreneurs business journeys, his column Lean Forward appears weekly on INC.com and he is regularly contributor to CMO.com.

join eric V. HOLTZCLAW at the 3rd Annual 2013 Engagement & Experience Expo! We encourage you to join Eric as he shares insights on The Power of Progressive Profiling with Brent Wheeler, Senior Vice President of Customer Acquisition Services, Response Mine Interactive and Florian Vollmer, Senior Vice President, Design and Principal, InReality

50

Loyalty Management LOYALTY360.ORG

The Loyalty Leap for B2B: Turning Customer Information into Customer Intimacy
Bryan Pearson
Portfolio | July 2013

The best-selling author of The Loyalty Leap applies the principles of customer intimacy to a business-to-business context. Since the publication of New York Times bestseller The Loyalty Leap, Bryan Pearsons customer loyalty approach to marketing has changed the way many organizations use their customer data. Small coffee shops and large corporations have applied the Loyalty Leap principles to effectively deliver mutual value to customers. But many readers have asked the same question: How can I apply these lessons in a business-to-business context? While the principles outlined in The Loyalty Leap hold true whether the customer is an individual or a business, the application of the Loyalty Leap steps can vary. While an individual might respond favorably to one sales pitch, a large corporation with a complicated sales chain might respond very differently. Drawing on his own experience and extensive research, Pearson helps B2B marketers avoid the pitfalls of loyalty marketing to businesses. He helps marketers segment their market into small business, large enterprise, and channel marketers, and explains how a customer loyalty plan can be adapted for each segment. Sharing case studies of successful B2B loyalty initiatives from leaders such as American Express, PHX, Teradata and Salesforce.com, he shows that B2B organizations can successfully take The Loyalty Leap. The Loyalty Leap for B2B is a practical guide that will help you cultivate loyalty among your business customers.

Marketing to Millennials: Reach the Largest and Most Influential Generation of Consumers Ever
Jeff Fromm and Christie Garton
AMACOM | July 2013

The numbers cannot be ignored: 80 million Millennials wielding $200 billion in buying power are entering their peak earning and spending years. Companies that think winning their business is a simple matter of creating a Twitter account and applying outdated notions of cool to their advertising are due for a rude awakening. Marketing to Millennials is both an enlightening look at this generation of consumers and a practical plan for earning their trust and loyalty. Based on original market research, the book reveals the eight attitudes shared by most Millennials, as well as the new rules for engaging them successfully. Millenials: value social networking and arent shy about sharing opinions; refuse to remain passive consumers - they expect to participate in product development and marketing; demand authenticity and transparency; are highly influential - swaying parents and peers; are not all alike-understanding key segments is invaluable. Featuring expert interviews and profiles of brands doing Millennial marketing right, this eye-opening book is the key to persuading the customers who will determine the bottom line for decades to come.

Engaged! : Outbehave Your Competition to Create Customers for Life


Gregg Lederman
Evolve | August 2013

Your company can be one that customers love to do busi- Create an environment of appreciation that empowers employees and helps them to become more motivated ness with...one that turns customers into loyal followers and committed to your companys success. who buy more and more often. The journey through ENGAGED! will teach you what leading companies do to Fill every managers toolbox with practical and proven create customer love. techniques for making your companys values and In this book youll discover the Eight Principles that every desired customer experience a part of the conversa- tion every day! manager needs to create a workforce that lives the company brand in ways that leads to an experience that helps create customers for life. With the tools and techThis book dispels popular myths about employee niques outlined in this book, you company can: rewards (they dont work the way you think they do) and Get all employees on stage to deliver a more employee and customer satisfaction efforts (which, for consistent customer experience. most companies, are more of a distraction than useful data linked to tangible results). Gregg Lederman intro Increase employees happiness so they make your duces the ENGAGED index (a tool you can use to find out customers happier. how ENGAGED your company is). This book will help you Go beyond announcing your culture to getting every put your plan together so that rather than imagining employee consistently living it. what could be, youll actually design what should be. Quantify your culture and customer experience to create unheard of visibility that gets everyone focused on results.

Loyalty Management THIRD QUARTER 2013

51

BEST BUSINESS PRACTICES

Making

SHOPPER INSIGHTS
Stick

Milen Mahadevan
dunnhumbyUSA

n the age of Big Data, we know what shopmany organizations struggling to integrate new pers are buying, when theyre buying it and sources of insights and data into their existing how frequently. We know their household processes and assets and utilize them upfront size, social media activity, brand preferences, in strategy decisions. Integrating attitudinal and trade-offs, and what sort of promotions behavioral data into one single-source database entice them to purchase. We can connect with and a singular insight of my customer - can them through various channels to gauge their in- deliver true relevance and, as weve seen, an terest in a brand, or to understand their decision- incremental sales lift. making. Leveraging this data to increase market share, brand exclusivity and customer loyalty has become the norm, and nearly every brandBy knowing to what extent a consumer based business professes to building a shoppercentric approach. is influenced by attributes like displays,

This data, combined with unprecedented access to shoppers, presents an enormous opportunity to understand how shoppers think, feel and act which is particularly important for consumer packaged goods manufacturers (CPGs), who currently have more headroom for loyaltybuilding than other industries. So why do some achieve differentiation while others seem to squander their insights and fall in with the crowd or, even worse, fall behind? Creating meaningful insights which deliver valuable, long-term relationships with customers - requires closing the loop between attitudinal and behavioral data, and recognizing key stumbling blocks. Fragmented insights The massive amount of pre-purchase, point of purchase and post-purchase data thats available today is changing the analytic space of CPGs, yet its real potential is untapped when it remains in separate silos. Consumer insights generated through primary research become the property of the marketing department, while the shopper insights gleaned from behavioral data remain in the hands of sales teams. We also see

price or pack size, knowing how that relates to demographic data such as their household size, and knowing what ultimately determines their purchasing trends, we can deliver the right message to the right customer at the right time.
That can be as simple as knowing that a shopper will try out a new coffee blend if he/she receives a coupon for it, or that product positioning could entice that customer to purchase a complementary product in another category. Us vs. Them Gone are the days when brand managers held the keys to the data. Todays retailers are able to isolate levels of category engagement, predict potential unmet consumer needs and offer strategies to improve programs for additional gain. There is enormous potential for comprehensive

52

Loyalty Management LOYALTY360.ORG

shopper understanding when CPG vendors and retailers collaborate by leveraging the power of their collective data and insights. For example, we recently worked with a leading confections company and national grocery chain to increase sales. By combining data assets, we were able to identify six segments of buyers and determine the why, where and when of their in-store purchases. Armed with that insight, the retailer adjusted the merchandising efforts for several brands, which yielded an increase in overall dollar sales and opportunities for cross-promotion.

Insight without action While it might be interesting to learn that 80 percent of my companys business is derived from one customer segment, that insight only becomes valuable when I stop and consider, how do I make that meaningful? CPGs must use that insight as a tool to look further down the analytical chain and determine what they can do to protect that segment, such as making sure their preferences are readily available, and determine where the brand sits on the consumers consideration set.

Brand equity vs. brand behavioral Brand equity does not equal brand behavioral equity equity Brand equity does not equal brand behavioral equity. I could, for example, have a strong appreciation for Apple products (providing strong brand In another example, knowing that millennials use their equity), but, when given the opportunity, I dont actually smart phones to look up product features might elicit purchase an Apple product. a hmm reaction, but the insight doesnt have an impact Combining the data on what a customer prefers and what until I consider how to combine that with their shopping a shopper ultimately purchases allows CPGs to focus on habits and increase their online interaction with my brand, what will create real and lasting equity. Consider the ice such as through an app. cream category. dunnhumby worked with a top ice cream brand that used data to determine the price threshold of A static view its best shoppers, and how they interacted with competiDeveloping shopper insight isnt a one-and-done affair. We tor brands. Utilizing that knowledge allowed them to grow have the tools today to continually gauge how customers that equity - by delivering extra savings to loyal customers respond to various incentives; channels of communication, - without participating in the categorys price-slashing wars. and how we can better deliver what they need. We can use data to evaluate successes and failures, and even rethink launch plans based off early insights from retailers. ComA loyalty program vs. a loyalty approach bining follow-up analytics with pre-purchase preference Too often, loyalty programs remain a one-off tactic for data, were able to close the loop, and, in turn, use that brands, retailers and companies outside of the consumer insight to refine the accuracy of future insights. L goods vertical. While sweepstakes-style programs may generate interest and email addresses, they can be a bit of a shot in the dark offering little value for enticing a target segment or building brand loyalty. But by combining consumer and shopper insights, we can see the importance of cultivating a truly customer-centric organization. Using the ice cream example, we examined shopper dynamics for the category and found 25 percent of the buyers were delivering 65 percent of the sales providing the hard data to support focusing on retention through loyalty versus the acquisition of new customers. Many coffee and cereal brands use CRM as a vehicle for interaction that simply isnt there at the point of purchase, via reward programs that allow customers to go online to redeem points, download music or receive a reward for sharing their opinion on a new product all interactions that deepen the relationship and generate additional data. But reaping these benefits requires committing to a comprehensive, organization-wide shift from a traditional mindset and culture to an approach that bases decisionmaking on what the customer needs, rather than what shareholders hope to get.

Milen Mahadevan, Senior Vice President, Client Solutions, dunnhumbyUSA concentrates on shaping and driving dunnhumbyUSAs foundational capabilities, solutions and talent across the business. As head of Client Solutions and the Service Line organization, Milen is responsible for cultivating and expanding the companys solutions expertise, including data, insights, communications and media that provide comprehensive solutions strategies for dunnhumbyUSAs clients.

Loyalty Management THIRD QUARTER 2013

53

BEST PRACTICES

How To Deepen Customer

Loyalty with

Smarter VIDEO
Smarter video significantly enhances

Kelly Ford
SundaySky

customer loyalty initiatives

by delivering compelling, one-to-one experiences that foster deeper levels of brand engagement.

Rewards programs and loyalty initiatives are generally designed to drive repeat purchases, increase spending, maximize lifetime customer value and incent advocacy and referrals. Customers enrolled in loyalty programs are most profitable to a brand however, the average consumer is active in just over half of the programs in which he is enrolled. With this in mind, brands must continually enhance and differentiate their approach to building customer loyalty in order to stay competitive and drive value. Contextual Experiences are King Brands that excel at differentiated loyalty experiences put the customer at the core, and deeply understand his expectations, wants, and needs throughout the customers journey. Delivering experiences that are relevant, tailored and timely contextual experiences treats the customer as an individual and conveys that the brand knows him or her personally. Consumers now come to expect such personally relevant interactions across all channels, and the effectiveness of loyalty programs is often enhanced with such personalization features to engage the customer in a contextualized manner. For instance, a rewards account balance update is a standard marketing communication to customers enrolled in a loyalty program. Brands can enhance such communications by recommending a product or offer a promotion relevant to the individual customer, reflective of his past purchases or profile characteristics. Engaging customers in such a contextualized manner means tailoring experiences that can be behavioral or truly personalized to the individual based on data attributes. Such personalized experiences are taken a step further when applied to the most engaging digital medium today: video. Smarter video significantly enhances customer loyalty initiatives by delivering compelling, one-to-one experiences that foster deeper levels of brand engagement. Personalized video communication is more helpful to customers than mass communication tactics 90% of customers that view such videos find them helpful, delivering a positive customer experience and, thereby, measurably lifting a brands Net Promoter Score (NPS). Ultimately, customer-centric brands across all industries can utilize smart video for differentiated, contextualized customer experiences at every stage of the customer lifecycle, resulting in deeper customer loyalty and higher value. Allow me to illustrate

54

Loyalty Management LOYALTY360.ORG

For Insurance Providers Today, the average NPS for auto and home insurance is 41, 23 for life insurance, and only 12 for health insurance vast opportunities exist for insurance providers to better satisfy their customers and improve loyalty. Typical customer pain points include emotional claims processes and statement confusion, but providers can reverse these negative touchpoints by leveraging the customers situational data to deliver contextual video experiences that proactively educate and explain while building customer confidence in the brand. For instance, if a customer files an auto claim, a video delivered via SMS may include a scene with a list of rental car retailers in closest proximity to the policyholders location, or the top-rated, local repair shops to his home. Engaging customers in such a relevant manner makes a customer feel known and valued, builds a positive, emotional connection to a brand and encourages policyholders to think beyond just price as a factor in their relationship with their insurer. The result is loyalty marketing initiatives that measurably increase brand stickiness and derive additional value from pre-existing policyholders.
The sample video scene (left) includes a policyholders insurance agent with contact information, based on the customers geo-location.

For Financial Institutions Creating memorable customer experiences creates differentiation, helps strengthen the brand and increases customer loyalty, says Jamie Moldafsky, Wells Fargos chief marketing officer. A banks ability to turn customer data insights, such as spending habits and behaviors, into smart video experiences at every touchpoint can be a game changer to deepen loyalty. For Retail & Travel Ecommerce The same is true for ecommerce sites, including online retailers and travel brands. Driving repeat purchases and building high-value customer relationships is the key to capturing greater wallet share from competitors, and sustaining it. While retailers, airlines and hotel sites typically stay competitive with loyalty and rewards programs, today this is not enough of a differentiator the top-rated programs are those that drive high customer satisfaction. Retailers and travel brands must enhance the effectiveness of loyalty programs with personalization for stronger customer engagement, while allowing for ease of enrollment and redemption activity for a better customer experience. Promotional offers based on the customers on and offline shopping history, travel preferences, geography or other relevant attributes can all be leveraged to deliver a smart video experience, and can be redeemed directly with one click by an interactive call-to-action within the video. Merchandising messages may differ between a frequent professional traveler and a soccer mom researching family vacation, while upselling recommendations may vary by customer transactional data. A retailers repeat customer could be incentivized with an earn special rewards message, while a customer who hasnt purchased in months might receive a welcome back message. Smart videos are always relevant and tailored to the individual customer for an optimal experience, resulting in improved customer satisfaction and loyalty.
In the sample video scene (left), a relevant upsell offer is recommended to a customer based on his transactional data.

For instance, a video message may tailor offers and reward redemptions to an individual credit cardholder based on historical and situational data, such as past purchase trends or recognition of a life event, such as purchasing a new home or entering retirement. These messages speak one-on-one to the customer, but more so, they help create a positive brand relationship. Banks achieve a lift in customer satisfaction and a measurable increase in consumer dedication and value over time, ultimately moving to the top of the customers wallet.
The sample video scene (left) features a tailored reward to the credit cardholder for two U.S. Open tickets, based on the customers preferences and purchase history.

No matter the industry, compelling customer experiences differentiate loyalty programs and are key to building and nurturing long-term customer relationships and profitability. Add smarter applications of video and the consumer gets a more engaging experience that has also proven to be more effective than the usual mass communication tactics. Customer-centric brands with a keen focus on data are poised for success with smart video. For brands that lead the way, the benefits promise to be vast and value opportunities are great across multichannels and touchpoints. L

TO HEAR MORE FROM sunday sky DONT MISS THEIR SESSION HOW TO USE SMARTER VIDEO TO DELIVER A DIFFERENTIATED WELCOME EXPERIENCE at the 3rd Annual 2013 Engagement & Experience Expo!

Loyalty Management THIRD QUARTER 2013

55

BEST PRACTICES

the Customer
Its All about
Loyalty programs are difficult in the B2B space but the main loyalty goal now revolves around customer experience management.

Jim Tierney
Loyalty360
In the past, a common perception existed that distinctly divided the B2B and B2C industries. But as the collection of customer data becomes more voluminous each day, and customer experience is a key differentiator for nearly every brand, that old perception may need further review. Sean Otto, Senior Customer Satisfaction Analyst for Trane which is a manufacturer of HVAC equipment told Loyalty 360 that trends in todays B2B space focus on a heightened expectation that B2B experiences should be more similar to the B2C experience regarding service and product delivery. There seems to be a strong blurring of the lines between the two, Otto said. Our B2B space is mixed with product delivery, project fulfillment, and servicing equipment. While it is very much dependent upon the construction business in general, our focus is really on improving the operations of the business to better meet and fulfill the demands of our customers. Regarding customer-centricity and customer loyalty, Otto said Trane has numerous customer touchpoints because it sells equipment that can take anywhere from one day, to six weeks, to one year to deliver. For the more involved and time-consuming projects, Otto said Trane is sure to take special care of the customer. Some equipment can be shipped same day, but some equipment is actually custom built and, depending upon the customizations and queue, it could take a year for delivery. For the more custom-built products, we fly the customer in for live testing on the equipment. For larger facilities that are being built or redesigned, an architect or engineer will specify the appropriate HVAC needs of a building that has been designed, Otto explained. Often times, the engineer or architect has experience with a certain HVAC manufacturer and will create a specification oriented to that specific HVAC manufacturer, he said. Those specifications are then bid out to all the HVAC vendors and equipment suppliers in a typical bidding process in the construction space. It becomes important to create relationships with the architects and engineers to promote your products to improve your chances of being included in the original specification as a basis of design. The applied market for HVAC is really the custom side of the business -- everything that isnt sold as a stand-alone out of the box unit. In the B2B world, Otto said its really about understanding that whole array of touchpoints and the customer journey. We may never directly deal with the end user, so were trying to establish those relationships with the intermediaries who continue to sell our products and with our end users who will continue to request our products. There are more relationships to manage in the B2B space. Decisions are not typically made in a vacuum as can be done in a B2C experience.

56

Loyalty Management LOYALTY360.ORG

In the B2B world its really about understanding that whole array of touchpoints and the customer journey.

Tracking and managing the range of customer touchpoints becomes more complex to manage and address. In managing those relationships, Otto said, Trane doesnt have a lot of control over the personal relationships with customers because so much is covered through the warranty process. Another challenge Otto cited in the B2B space is Tranes relationships with its engineers and architects during the design phase. That engineer or architect will design it and might go ahead and design for a York (a competitor) HVAC system, and we have to come back and say this is how the Trane system would work, and the advantage of using our equipment over others. Like any relationship, Otto said, there is always risk involved, but a majority of our relationships with intermediaries starts with our account managers. Training on the softer side of customer interactions has always been a strong fundamental to our business. Some of our end users have very strong opinions about the Trane brand so the intermediary relationship isnt as necessary. Trane has always been a manufacturer of HVAC equipment, but in the 1980s the company ventured into ownership of the selling chain side of the business by acquiring one of its franchise businesses. Since then, Trane has grown the sales chain by acquiring the remaining franchise offices. The change in selling has pushed the business to become more oriented on servicing equipment and selling HVAC supplies to the local areas. One of the hot areas in Tranes industry is energy management. Now, customers can get a 300% savings in energy on a piece of equipment that they couldnt have 10 years ago, he said. Energy

management is the current buzz word floating around. It is still a newer part of the core business offering and is slowly becoming an important selling point. Not all of our end users are aware of the impact that newer equipment has on reducing their energy spend in a building. While all of Tranes offices are aligned with the corporate vision, Otto offered three pain points in the business: responsiveness and timely response to customer needs/requests; communication on all scheduled deliveries of products and services; and providing documentation that meets customer needs.

Loyalty programs are difficult in the B2B space, Otto said, but the main loyalty goal now revolves around customer experience management.
We are seeing a holistic approach to many of these programs in B2B, Otto said. Thats taken on more with operational improvements and relationship training. There is a whole lot going on with social media with Trane and that helps us understand where the pain points are. Otto views customer centricity as acquiring a vision of repeated touchpoints. With this whole buying process, we want to know if its a direct sale, end user/sales, or did they deal with a mechanical engineer, how they were rated, and diving into more data driven contacts. Ottos advice in the B2B space? Its all about the people, he said. L

Loyalty Management THIRD QUARTER 2013

57

2 0 1 3

2013
November 5-7 | Westin Galleria Dallas, Texas

register now!
Visit EngagementExpo.com  for Event Updates and Registration

EXPO ATTENDEES WILL RECEIVE A COPY OF POWER: How J.D. Power III Became the Auto Industrys Advisor, Confessor, and Eyewitness to History

Compliments of Loyalty360

powered by

"Great presentation style, concrete example, actionable information; great job!" "Excellent presentation; good balance between content & delivery, fun yet insightful topic"

- Lizzie Dragon | PCCA

- Steve McMahon | The Relational Capital Group

2 0 1 3

2013
November 5-7 | Westin Galleria Dallas, Texas

Engagement Expo Preview


JD Power - Keynote Speaker!
On the heels of the scheduled September release of his new book, POWER: How J.D. Power III Became the Auto Industry's Adviser, Confessor, and Eyewitness to History, J.D. Dave Power III will be the keynote speaker at the 3rd Annual Engagement & Experience Expo, presented by Loyalty 360 The Loyalty Marketers Association, which will be held Nov. 5-7, 2013 at the Westin Galleria in Dallas, Texas. Power, the founder of the highly respected and notable J.D. Power and Associates, is scheduled to deliver his keynote address targeting the voice of the customer on Nov. 5 at 3 p.m. During his keynote presentation, Power will draw on his vast experiences, a deep passion for listening to the customer, and share his unparalleled and heightened insight into the Voice of the Customer where its come from and, more importantly, where it needs to go to benefit all marketers.

B2B Sessions
Siemens Voice of the Customer Engineering Innovative Experiences
When the Building Technologies Division of Siemens Industry, Inc., launched its Voice of the Customer (VOC) initiative Engineering Innovative Experiences in 2007, the primary focus was to increase customer loyalty and engagement. Since that time, the Customer Excellence department has consistently and proactively sought out customer feedback, then integrated that feedback into daily workflows and strategic business decisions. The result of this initiative: Siemens is enjoying its highest customer loyalty metrics since implementing VOC.

Speaker
Linette Myland Marketing Manager Siemens Industry, Inc.

powered by

60

Loyalty Management LOYALTY360.ORG

Visit EngagementExpo.com for Event Updates, Registration and  the full Engagement Expo agenda

B2B Sessions
Igniting the Customer Relationship through the Voice of the Employee
Join this session to learn how KARL STORZ combined the results of Voice of the Employee and Voice of the Customer feedback to uncover great ideas for improving both employee and customer satisfaction. Objectives of this session include: Recognize and reinforce the employee behaviors that meet top customer needs Develop a work culture that promotes employee growth and development as well as a company culture that promotes service to the customer Develop practices that promote opportunities for service improvement

Speaker
Christine Peters Operations Manager, Customer Experience KARL STORZ Endoscopy America, Inc. Nancy Porte VP, Customer Experience Verint

Driving Franchisee Engagement: a B2B Results Story


Join us to learn how Hilton Worldwide and its nine hotel brands have transformed their global franchise owner relationships to build engagement with hotel owners all over the world. With a unique data management solution, everyone that touches these high-value owners has detailed customer information and real-time updates at their fingertips to provide personal service. In this informative session, Hilton will describe how it was able to navigate its complex ownership relationships for 3800 global properties, continue to drive overall growth, and deliver a personalized loyalty program to these critical stakeholders.

Speaker
Tracey Moss Director, Owners Loyalty Hilton Worldwide

Next Page

B2C

Youre going to see a top-down, really deep agenda that is relevant to loyalty [providers] and marketers alike. Whats really unique is that they have a special B-to-B track and a B-to-C track; Im not aware of another conference that has made that bold move and added that level of expertise and relevancy.

Sean Geehan, Geehan Group

2 0 1 3

2013
November 5-7 | Westin Galleria Dallas, Texas

B2C Sessions
Wholly Guacamole: 10 Things We Learned About Social Media (hint: its not about guacamole)
Our brand is 6 years old and with a small budget, social media was our Superman, Hulk and Mickey Mouse all rolled into one. We learned alot over the years: Its not about money, its about time Its not about us, its about them (the fans) Its not about likes, its about engagement Its not about schedules, its about being relevant Its not about giving info, its about exchanging info

Speaker
Tracey Altman Vice President of Marketing and Product Development Fresherized Foods

powered by

62

Loyalty Management LOYALTY360.ORG

Visit EngagementExpo.com for Event Updates, Registration and  the full Engagement Expo agenda

B2C Sessions
The Power of Progressive Profiling
The most important word in relationship marketing is relationship, but true relationship takes time and requires a deep level of understanding and trust. Is there a way to speed up that process and move customers more quickly along the relationship path? From this session, you will learn: Customers willingness to provide information (how much is too much?) The best way to ask questions (its all about how you say it) How to use what you learn (fine tuning the relationship)

How to Use Smarter Video to Deliver a Differentiated Welcome Experience


Liberty Mutual, the third largest property and casualty insurer in the U.S., has undertaken a strategic initiative to improve the new policyholder experience and bridge the gap between quote approval, initial payment and the arrival of the physical welcome packet. Personalized video experiences enhance new customer engagement by proactively explaining the policy, billing details and promoting value-added services. During this session, attendees will hear from Liberty Mutual about the dynamics behind this strategy, goals and early results of the video program, as well as key learnings and future plans. Expanding upon the Liberty Mutual case study, this session will further illustrate how video can play a strategic role in deepening customer engagement throughout the customer lifecycle, driving new value opportunities in support of acquisition and ongoing loyalty initiatives.

Speakers
Eric Holtzclaw Vice President & General Manager Preference Management Consulting Brent Wheeler Senior Vice President of Customer Acquisition Services Response Mine Interactive Florian Vollmer Senior Vice President, Design and Principal InReality

Speakers
Brian Piccolo Manager, Digital Strategic Services Liberty Mutual Jim Dicso President & CRO SundaySky

4120 Dumont St Cincinnati, OH 45226

You might also like