Volume 2 Number 2

Spring 2010
powered by Loyalty 360

Customer:
What does
she have
to do with
loyalty?

Sex Appeal: Loyalty based on our Sex

Yes, there is emotion in economics…

What is your Behavioral
Economics IQ?

Loyalty Expo Preview

Your Exclusive Sneak Peek
at this year’s conference!
 www.alterian.com

We need Are you

to talk engaging
with your
Build loyalty customers?
with Alterian

Link analytics to Make your website engaging

execution www. for the individual

Make email a strategic Listen to how your brand

channel is perceived

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

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

 This Month in
SPRING 2010 VOLUME 2 NUMBER 2 WWW.LOYALTY360.ORG

If a customer was not entirely

DEPARTMENTS satisfied, why not?
6 What’s on Loyalty360.org Customer Satisfaction: Keeping Score is Only the

34
First Step
8 Letter from the Editor
pg
10 Contributors

LOYALTY FORUM FEATURES

12 Loyalty Forum: Your Voice
14 Q & A: Ask the Experts
Banks and retailers are facing a variety of oppor-
tunities and challenges as they try to make loyalty
marketing meaningful to the individual customer at
the points of greatest value—the moment of pur-
chase. What are you doing to overcome these chal-
lenges? How are you using technology to engage
with customers during the purchase process?
16 Behind the Brand/People
Interview with Stuart Kiefer, Division Manger of
Loyalty Solutions, FirstData
18 Behind the Brand/People
Interview with Judy Christa-Cathey, Vice President
of Global Brand Marketing, Hampton Hotels
20 Books
Loyalty Reads
22 What is Your Behavioral Economics IQ?
John H. Fleming, Ph.D., Gallup Consulting
26 “Sex Sells” Men and Women Are Loyal to Different
Things
Dr. Bob Deutsch, Brain Sells
28 Lessons from the Frontline: B-to-B Customer Service
Lynn Daniel, The Daniel Group
32 Establishing Key Metrics for Measuring the Value of
Loyal Customers
Laura Patterson, VisionEdge Marketing
34 Customer Satisfaction: Keeping Score is Only the
First Step
Karl Sharicz, SImplexGrinnell
38 All I Really Needed to Know About CRM I Learned in
Couples Counseling
Greg Nelson, agencyQ

Lessons from the

Frontline: B-to-B
Customer Service
pg 28
Loyalty Management™ • SPRING 2010 3
Comarch Loyalty Management

The last puzzle piece

in Customer Relationship Management
Loyalty | Business Intelligence | Customer Experience

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

Loyalty Management™ | November 2009 19

 This Month in
SPRING 2010 VOLUME 2 NUMBER 2 WWW.LOYALTY360.ORG

TECHNOLOGY,
TRENDS & REWARDS
sneak preview on page 59! 40 @Social Media: #Tweeting and #Loyalty
Michelle Marquardt
42 So Many Shiny Things, How Do I Choose?

@Social Media: How Erin Raese, Loyalty 360

can Twitter help your 44 Loyalty Innovation

marketing push? 46 The Five Things Marketers Should Be Doing Right

40
Now (because of the new “CARD” act & the pending
financial reform bill)
Tom Koeppen, DataCo Solutions, LLC
pg
Loyalty Management
Editorial & Production Team
Erin Raese - Editor in Chief
What does
Mark Johnson - Contributing Editor
Elizabeth Heyer - Editorial Director
a customer
Kathleen Ninneman - Graphic Designer
Graphics Plus, Inc. - Print Production have to do
Loyalty 360 Team
with loyalty?

48
Mark Johnson - President & CEO
Erin Raese - COO
Amanda Chasteen - Manager, Marketing Operations
Charlie Deye - Director of Sales
Jessica Siegert - Sales & Account Manager pg
Julie Hellebusch - Controller

Contacts
Article Submissions: Erin Raese (erinraese@loyalty360.org)
Advertising: Charlie Deye (513.226.0925)
BEST BUSINESS PRACTICES
To subscribe to Loyalty Management, visit loyalty360.org.
48 What Does a Customer Have To Do with Loyalty?
Shiv Gupta, Farmers Insurance
We Want Your Feedback
50 A Time for Change
As a “voice of the customer” focused publication we Carlos Dunlap, Kobie Marketing
want to hear from you–our customers. What would
you like to see included in these pages? Share your 54 Creating Loyalty Inside, Outside a Company: Five
thoughts on articles and ideas for content. Strategies
Dianne Durkin, The Loyalty Factor
This is your platform. We would like to hear from you.
56 Voice of the Customer: What Does That Mean for
Write us at: mailbag@loyaltymangement.com
Loyalty and Engagement?
© 2010 Loyalty 360, Inc. and/or its Affiliates. All Rights Reserved. Mark Johnson, Loyalty 360
Reproduction and distribution of this publication in any form without prior written permis-
sion is forbidden. The information contained herein has been obtained from sources be-
lieved to be reliable. Loyalty 360 disclaims all warranties as to the accuracy, completeness 58 Loyalty Program Profile
or adequacy of such information. The opinions shared are those of the contributing uthors
and not necessarily reflective of Loyalty 360 and/or its affiliates. Loyalty 360 shall have no
ULTA Beauty
liability for errors, omissions or inadequacies in the information contained herein or for in-
terpretations thereof. The opinions expressed herein are subject to change without notice. 59 2010 Loyalty Expo Preview

Loyalty Management™ • SPRING 2010 5

 LOYALTY 360 ON THE WEB

what’s on loyalty360.org

Loyalty 360 members told us they wanted more robust features

and functionality from our website…and we listened
to you!
In May 2010, we will launch our new site
which will be unmatched in the industry.
Overhauled to include cutting edge
technologies and an overall heightened user
experience, the enhanced site will include:
•Easier navigation
•Member tier and management
with ability to control content
access
•Member download and upload
capabilities
•Member chat
•Interactive job board
•Podcasts homepage

Look for our updates soon!

Be sure to check out the Loyalty 360 blog at

We are also pleased to announce that we are
now using the Alterian email engine. Moving
to this new email platform enables Loyalty 360
to build a truly customer-focused integrated
communication strategy.
www.loyalty360.org/blog. As a thought lead-
er on customer and employee loyalty, leading
media such as FoxBusinessNews and The
New York Times have sought Loyalty 360
President and CEO Mark Johnson’s insights
about some of today’s hottest loyalty issues.
Tap into the blog to read his thoughts and
to share your opinions on all the important
news.

6 Loyalty Management™ • LOYALTY360.ORG

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

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

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

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

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

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

LEARN MORE ABOUT LOYALTY 360 &

JOIN TODAY AT WWW.LOYALTY360.ORG
 FROM THE EDITOR

Customer Experience – the latest buzz word(s).

Last year was the year of customer engagement; 2010 is
shaping up to be the year of customer experience.
Definitely not a new concept, our Loyalty Expo 2010 keynote speaker,
Jeanne Bliss, has been helping organizations focus on the overall customer
experience for over 15 years. Managing Partner of Customer Bliss and author
of “I Love You More Than My Dog,” Bliss in her keynote will be taking
attendees behind the scenes of the decision making that goes on inside some
of today’s most beloved companies.
While on the surface the principles surrounding customer experience seem
almost common sense, as Jeanne will point out, the practice tends to be
challenging. With the day-to-day pressures for increased revenue and cost
reduction, customer experience often becomes one of the first casualties.
Throughout this issue and at Loyalty Expo 2010, we’re going to explore what
it takes to deliver 360° experiences that drive loyalty and engagement at each
Welcome new Loyalty and every customer touchpoint.
360 Members: A good place to start is John Fleming’s article (pg 22) about behavioral
economics. I personally love this article because my brother, who holds an
The Daniel Group
MBA in Economics, is a firm believer in the economic base assumption of
Infoprint rational decision making. I (the one with a dedicated closet for my shoes)
Georgia Pacific argue that actual practice will prove the base assumption wrong because
Jakala people make emotional decisions more often than rational decisions. Thank
SpaFinder you John for the fodder to win this ongoing debate! For the rest of us, this is a
Tata Consultancy Services lesson in communication.
True Value Other articles in this issue explore the relationship between customers and
Visa employees (“All I Really Needed to Know About CRM I Learned in Couples
Counseling,” pg 38 and “Creating Loyalty Inside, Outside a Company: Five
Strategies,” pg 54) provide insights into how to look at these relationships
from a true 360° perspective. Remember, customers and employees are
We want your multi-dimensional, so the ways in which companies build strong, interactive
feedback. Please relationships with them must be as well.
share your thoughts We hope this issue gets you thinking about the importance of a positive
about this issue and customer experience. Come join us at Loyalty Expo 2010—where you’ll learn
the show sessions how easy and cost-effective it is to enhance your customer experience—
with me (erinraese@ results guaranteed! Session previews begin on page 59.
loyalty360.org). The
first 10 marketers
to share their
thoughts and insights
will be given a Erin Raese
complimentary pass Editor-in-Chief
Loyalty Management
to the Loyalty Expo. erinraese@loyalty360.org

8 Loyalty Management™ • LOYALTY360.ORG

CONTRIBUTORS
Dr. Bob Deutsch
Dr. Bob Deutsch, founder and president of
Brain Sells (www.Brain-Sells.com), Boston,
MA, has worked in the primeval forest and
on Pennsylvania and Madison Avenues,
studying how people form attachments to
products, persons and performances.
Lynn Daniel
Lynn Daniel has earned the role of expert
in B2B customer service and loyalty.
His background includes management
consulting, corporate planning and
new product management, and sales
management. He started The Daniel Group
as a consulting firm focused primarily on
manufacturers and companies who operate
in the B2B space.
Dianne Durkin
Dianne Durkin is the president and founder
of The Loyalty Factor, a training and
consulting firm that educates executives,
managers and lower-level employees in ways
to build customer and brand loyalty.
DIUHVKSHUVSHFWLYH
John Fleming
Fleming is Chief Scientist for Gallup’s
Customer Engagement and Human Sigma
practices, which set worldwide standards for
Gallup’s brand measurement and customer
engagement management applications.
Fleming also leads Gallup’s Business Impact
Analysis Consulting Group and serves as a
consultant on issues related to research design,
analysis, and complex modeling.
Shiv Gupta
As Director – Customer Insights with Farmers
Insurance, Shiv Gupta leads the development
of analytically driven customer strategies. One
of his major responsibilities is leading efforts
to identify high lifetime value customers and
develop analytically supported strategies to
acquire and retain them.
Mark Johnson
Mark is the President and CEO of Loyalty
360. He has significant experience in selling,
designing and administering prepaid, loyalty/
CRM programs, as well as data-driven
marketing communication programs.
RQHQJDJHPHQW
PDUNHWLQJ
www.young-america.com
1.800.533.4529
 Tom Koeppen
Tom Koeppen has over 20 years of success
increasing the effectiveness and profitability
of marketing strategies and customer
relationship programs. Tom is Sr. Vice
President of Sales and Marketing Strategy
with DataCo Solutions LLC, a marketing
analytics consulting group.
Michelle Marquardt
Michelle Marquardt is an interactive
marketing consultant with a focus on
social media, online and offline marketing
channels and in integrating web contact with
traditional marketing channels.
Laura Patterson
Laura Patterson is president and co-founder
of VisionEdge Marketing, Inc, a leading data-
driven metrics-based strategic and product
marketing firm.
Karl Sharicz
Karl Sharicz is Manager of Customer
Intelligence at SimplexGrinnell. For more
information about the company’s products
and services, visit www.simplexgrinnell.com.

Greg Nelson If you would like to contribute to a future

Greg Nelson is head of the customer issue of Loyalty Management please
engagement and loyalty practice at
agencyQ, a full-service digital marketing
contact Erin Raese at (630) 235.8251 or
agency based in Washington, DC. Greg erinraese@loyalty360.org.
offers his vast experience in conceptualizing
and implementing ROI driven integrated
marketing programs for Q’s clients.

›ŽŠ’—ȱŸŠ•žŽȱ˜›ȱ‹›Š—ȱŠŸŽ›’œŽ›œǰȱŒŠ›ȱ’œœžŽ›œǰȱŠ—ȱ™›˜ŒŽœœ˜›œ

   ǯŽ˜’—Ž›ŠŒ’ŸŽǯŒ˜–
 LOYALTY FORUM: YOUR VOICE

We’ve received several inquiries about using Social

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

S ocial media is the most powerful tool currently

available in increasing company or product awareness.
This can be done in a direct way or an indirect way by
W e recently shelved (once again) the concept of our
own internal social networking solution. Based
on IBM technology, the platform would have done
means of employee networks. Depending on the type what we needed it to do, and over-delivered in terms
and size of company, there is a good chance one already of collaboration capabilities, but there was no impetus
exists. If a company wants to use this is as a medium for for our people to proactively use the system. The main
communicating directly to their colleagues, I would edge reaction was to question why people would use an
on the side of caution. Personally I would not use it in a internal system when they are already active on external
directive format, i.e. to tell staff what to do. However, to sites. We are now developing training, recommendations
use it as a company magazine—what’s coming, what’s and guidelines for how best to use external networks.
happening, social events to take part in—is something I Very much a case of “if you can’t beat them, join them.”
think every company should do.
Michael Bolan LinkedIn
The first thing to remember is that social media
reflects the ideas, interests and socializing needs of
the people. It could be used as an unparalleled tool
to pull a company workforce together and a unified
Social media could be used as
direction within a team. The opposite could also apply if
mismanaged.
an unparalleled tool to pull a
As to what information should be collected on this
type of medium—it’s a bit tricky. I think any perceived company workforce together
type of control or manipulation by the employee would be
met with destructive consequences. It must not and can and a unified direction within a
not feel like work.
Alastair Dodds LinkedIn
team. The opposite could also
apply if mismanaged.
—Alastair Dodds

12 Loyalty Management™ • LOYALTY360.ORG

 The foundation/guidelines for the best social networks are
broad in scope, but deep in meaning, they allow the social
aspect of the network to shine.
—Connie Chesner
S ocial networks should take into account the informal
nature of most exchanges in such mediums, realizing
that even the formality of email is often lost and accepting
that tonality will be different there. This can be a positive
transformation at times, encouraging open and candid
exchanges that truly build out understanding and ideas.
Social networks, for the most part, are self-regulating,
but also need a set of broad guidelines to usher in new
members and set the foundation for positive interaction;
this means that once you set your foundation for
interaction, if you allow for open and honest interaction,
you will see the community self-regulate members who
get out of line or stray off topic in inappropriate manners.
The foundation/guidelines for the best social networks
are broad in scope, but deep in meaning, they allow
the social aspect of the network to shine. For example,
banning profanity or attacking others personally seems
intuitive, but give clear lines to members who may
become heated in the course of a discussion or exchange.
Other guidelines that shape the way content is
exchanged can help keep everyone aligned with a
common purpose; organization is essential to effective
group discussions and interactions. Systems which allow
for collaboration with documents, as well as interactions,
and private side-exchanges most aptly mirror face-to-face
interactions and are therefore the most powerful.
It is also important to have some type of suggestion
regarding timing expectations and cross-medium
T here’s a growing number of people at DraftFCB using
Yammer for internal SM networking. The user base has
grown to 500+ since it started 6-8 months ago. The info
is fairly light- hearted—sometimes there is an occasional
debate, but no longer than 4 rounds. The best content is
the shared URLs, white papers, requests from offices in
the network on best practices, etc., but the structure of
Yammer prevents things like polling and surveying and the
ability to mine the content for off-line evaluation.
The platform has built its own content expectations
that limits it to business and consumer insights, but there
is the periodic “be careful what you post” reminder from
corporate communications (with a link to the IPG policy
on posting). A big company has to watch over this kind
of thing and rather than shutting it off from our work sta-
tions, they are active participants in the environment.
Daniel Crane DraftFCB
communication; what I mean here is that colleagues can
get easily frustrated if expectations are incongruent or
become frustrated if they are in meetings all morning
and return to find a topic was introduced, discussed,
and decided upon before they had a chance to chime in.
Asking that discussion forums leave topics open for 24-48
hours at a minimum and gently reminding folks that if they
post a comment, following it up with copies via email and
phone is not only redundant, but counterproductive. Think
about the last time someone emailed you a question, then
called to ask if you got the email as it was arriving in your
inbox; rules help control this tendency of folks who are
emotionally involved in issues to over-communicate or to
duplicate communication streams across media.
With regard to how much information should be
collected and shared, in my opinion, there should be a
basic level of information (enough to put comments/
contributions into context), but not so much that I feel
the need to send birthday cards to my colleagues children
because I get reminder notices in the network. Social
networks are, by nature, open communication forums
and employees should treat their contributions as such.
Collecting a general profile on employees which allow
others in the organization to understand the department,
perspective, and qualifications of other contributors
assists in ‘lubing’ the communication streams enough that
exchanges are more meaningful.
Connie Chesner Right Brain Discovery
Policy Tool For Social Media
Have more questions? Need a little more direction?
PolicyTool is a policy generator that simplifies the
process of creating guidelines that respect the rights of
your employees while protecting your brand online.
You’ll be guided through 12 questions that should
assist you in developing policies and guidelines for Social
Networks in your organization.
PolicyTool has been developed by rtraction in
collaboration with Harrison Pensa lawyer David R.
Canton, one of Canada’s leading authorities in internet
and technology related legal issues.
Go to http://socialmedia.policytool.net/ to learn
more and get started today.
Loyalty Management™ • SPRING 2010 13
 Q&A
LOYALTY FORUM: Q&A

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

A: Through our experience with physical bank,

retail and loyalty marketing vendors, we un-
derstand that the bottom line is to increase two vari-
ables: consumer frequency and spend. To increase
loyalty at the point of purchase, why not let the con-
sumer know that they can text in for an instant cou-
pon on their mobile phone and opt-in for additional
incentives/discounts in the future? The consumer
gets instant gratification at the POS with an option
of long-term gratification via opting in through the
loyalty program.
Once the consumer opts-in for long-term incen-
tives, and from a loyalty marketing execution per-
spective, we can incent them accordingly:
If customer “W” has not visited us in “X” time,
they get a text message with a coupon to redeem by
“Y” time for “Z”% off. -Or-
If customer “A” has not spent “$B” with us in “C”
time, they get a text message with a coupon to come
in by “D” time for “E%” off an order of “$F”.
In addition to offering this opt-in (clear call-to-
action) at the point of purchase or sale, why not of-
fer this in the application process by collecting their
mobile phone number?
It is apparent to us all that two things all consum-
ers love is their loyalty points/discounts and their
mobile phone. Now is the time to integrate them!
A: Trans World Entertainment
parent company of f.y.e, for your
entertainment stores, was able to con-
vert our CRM initiative into a MULTI-
MILLION dollar profit center for our 550
stores.
TWE accomplished this shift by
structuring a fee-based lifestyle mem-
bership offer at point of sale that rewards
customers for their in-store spend and
extends their brand reach beyond the
confines of their four walls by providing
discounts and value on their custom-
ers every day activities, such as dining,
entertainment, travel, shopping and car
care.
All of the trends for Retail show that
in this post-recession economy, custom-
ers have emerged with new perspectives
and expectations for their interaction
with retailers and for finding and part-
ing with any discretionary income. With
consumer confidence on the rise, we are
finding that we are well-positioned to ex-
tend our brand far beyond the four walls
of our brick and mortar stores and ad-
dress the four critical components that
post-recession shoppers are seeking:
savings, clarity, control, and escapism.
A staggering 80% of consumers in
a recent CNN poll indicated that they
are looking to simplify their lives and
clear out the clutter. Plus, 90% polled
expressed their passion for being more
frugal in the future. With the pending
changes in our industry to dramati-
cally lower the price point for CD’s we
are poised for growth in our sales num-
bers as this brings back our more frugal
customers who in the past have been
driven to our competitors either online
or in-store due to price. With a win on
the price front for our stores, we look to
Backstage Pass VIP to reach our goals of
extending our brand and creating real,
meaningful savings for our customers in
all areas of their life.
I encourage each of you to take a dif-
ferent perspective when watching TV
and see what retailers are selling – the
message behind their approach. You will
find that retailers are aggressively linking
savings with emotional engagement to
their brand.

—Tim Doelger —Barry Burmaster

Mobile Marketing Consultant, NYC Pay Media Director of Marketing, Visual Merchandising & CRM,
fye.com, a division of Trans World Entertainment

14 Loyalty Management™ • LOYALTY360.ORG

 A: I have experience in both banks and
retailers with a new approach to mar-
keting that goes beyond these traditional ap-
Through testing this approach in both re-
tailers and banks, we’ve learned how to not
only get significant increases in total share of
A new approach
proaches. With all due respect, as an industry wallet, we learned that we’re actually engaging that is truly
we’ve focused on using new technologies to
continue old strategic “product-centric” ap-
customers regularly before the POS. Custom-
ers are coming to us to plan their purchases “customer-
proaches. We talk about being “customer-
centric” by using loyalty cards and behavior
before they choose the POS they want to go to.
So if the POS is “Moment of Truth 1.0”, we’re centric” focuses
tracking to “fine tune” the product-centric ap-
proaches we put in front of consumers.
looking at “Moment of Truth 0.5”.
When you change the focus of your mar- on providing
A new approach that is truly “customer-
centric”:
keting to providing real value for high share of
wallet relationships across all the products and customers more
•focuses on providing customers more
choice than just “accept/reject” to offers
services you offer, you teach consumers that
the way to optimize the value they received for choice, seeks
and incentives
•seeks to grow share of wallet and not just
their business is by bringing all their business
to you on a regular basis, instead of by cherry
to grow share
share of market or response, and
•seeks to provide solutions to needs in-
picking the best individual product offers from
you and your competitors. And that is what
of wallet, and
stead of multi-product cross-sell or up-
sell
the traditional approaches of “product-based”
transaction marketing, fueled by coupons, has
seeks to provide
This approach does not require new technolo-
gies, just different thinking about how to apply
taught consumers. L
solutions to
technologies.
—Bob Viney needs.
Franchise Owner & Business Coach,
Action COACH Business Coaching

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 LOYALTY FORUM: BEHIND THE BRAND/PEOPLE

Stuart Kiefer
Divison Manager of Loyalty Solutions
First Data
Stuart Kiefer is responsible for the strategic focus, new product
development and innovation for Loyalty and Personalized Marketing
at First Data. Kiefer has more than ten years of experience in creating,
launching and managing loyalty-marketing programs.
Prior to his current role, Stuart managed large direct/database marketing relationships on behalf
of First Data’s Donnelley Marketing Group. These efforts focused on the acquisition, retention and
profitability of various credit card portfolios as well as the cross-sell efforts of partnering financial
institutions.

What is your customer loyalty philosophy?

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

What is your personal motto?

Hard work beats talent when talent doesn’t work
hard. I know, it sounds a little hokey, but it plays well
in youth sports and I believe it translates into the
business world as well.

If you were not doing what you do today,

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

Which talent would you most like to have?

Wow. That’s a tough question, mainly because I would say my answer has changed over the years. Twenty
years ago I would have said a 12-6 curveball and a nasty slider. Since there is not a huge market for left-
handed pitchers in their 40s, I’d have to say I’d like to be a “scratch” golfer. Now, if you had asked what super
power I would like to have…

16 Loyalty Management™ • LOYALTY360.ORG

Think like a consumer. Take Stuart and his three sons
Tyler, Ben, and Charlie
the list of “likes” and evaluate
how they could apply to your
business. Establish a team of
employees who represent the
various disciplines within your
company.

What are the qualities you most admire in
a person?
Courage, integrity, and a good sense of humor.
The courage to try new things, integrity to follow
through with a consistent set of values and
principles, and the ability to laugh with people and
at yourself from time to time.
If you could invite four people to dinner
(past or present) who would they be?
This is a great question and one that comes
up frequently in dinner conversations. The easy
answers always seem to be Abraham Lincoln,
Ghandi, Ronald Reagan, Warren Buffett or Bill
Gates. Those are all great answers, but I’m going
to go off the reservation a bit and start with Jimmy
Buffett. I’m a big fan of Jimmy’s music and books.
I’ve always said if I ever hit the lottery, I would buy a
boat and sail around the Keys until I caught up with
him.
Next, I would invite Brett Favre. First, I am
a lifelong Minnesota Viking fan. I’ve suffered
through four Super Bowl losses and a couple of
NFC Championship game losses in my life. I think
the Vikings best shot at getting to the big show
next year is to get Brett to come back for one more
season. I just want to do my part to help him see
the light.
My third guest is probably the biggest Brett Favre
Which book(s) are you currently
recommending?
Extreme Measures by Vince Flynn. Stuart Coleman
is my kind of hero.
What can we expect from First Data for
the rest of 2010 and beyond?
First Data will continue its transformation from
a payments processor to a technology company.
We are committed to ongoing investment, both
domestically and internationally, in cutting edge
technology solutions in loyalty, direct marketing,
prepaid, mobile, and ecommerce as well as our
traditional issuing and merchant lines of business.
What’s your advice for a novice loyalty
marketer?
Think like a consumer. Look at several programs
in the market today and make a list of what you
like and what you dislike about each. Take the list
of “likes” and evaluate how they could apply to
your business. I recommend establishing a team of
employees who represent the various disciplines
within your company: marketing, I.T., finance
and operations. Your success in contingent upon
cooperation and integration with all areas, but
remember it’s a marketing program. L

Hard work beats

fan I have ever met—Logan Andrew Bauman, it
would be the greatest dinner ever. Logan was the
best friend of my oldest son Tyler. He was like a

talent when
fourth son to Mindy and me. Logan was tragically
killed by an automobile just before Christmas 2008,
forever changing our lives. Logan was a bright,

talent doesn’t
funny, athletic young man with a very bright future.
We miss him dearly.
Finally, if I’m inviting Logan and Brett, I have to

work hard.
invite Tyler Kiefer, my fifteen year old son. Like any
parent, I would do anything for my boys and if I
could give Tyler one more day with Logan, it would
be the greatest evening of my life.

Loyalty Management™ • SPRING 2010 17

 LOYALTY FORUM: BEHIND THE BRAND/PEOPLE
Hampton Hotels has been
recognized for being, one of the top
hotel franchises in the nation and
a part of Hilton Worldwide. A big
hotel chain with very high standards.
No matter which of our 1,800 hotels
you check into, here’s what you can
count on: friendly service, clean
rooms, Clean and Fresh Hampton
bed washed fresh for every guest,
delicious free hot breakfast, free
internet access and hotels that are
in touch with the needs of today’s
travelers. Every time. Guaranteed.
Loyalty Management takes a closer
look at the woman behind the
brand – Judy Christa-Cathey, Vice
President, Global Brand Marketing,
Hampton Hotels.
18 Loyalty Management™ • LOYALTY360.ORG
Judy
Christa-
Cathey
Vice President Global Brand Marketing
Hampton Hotels
Many of us talk about building our cultures around
the customer experience, however many of us tend to
have a difficult time effectively executing, often due
to time or finance constraints. How are you able to
keep customer experience a priority?
Customer experience is a priority because our vision at Hamp-
ton Hotels is to set the standard for competitors to follow. Con-
stantly listening to our customers is how we innovate and evolve
in order to stay relevant to today and tomorrow’s customers. This
commitment to be a customer-centric brand is full circle at Hamp-
ton from hotel product innovation and team member training to
marketing and public relations messaging. At Hampton we believe
that it is our ability to connect and drive guest loyalty at the hotel
level that helps us build our circle of friends. We call our culture
“hamptonality,” one unstoppable brand with irresistible personality.
We celebrate team members who connect with guests. We always
keep customer experience a priority by leveraging guest insights for
the future while providing a consistent experience today and unify-
ing our brand voice internally and externally.
Share how a focus on customer experience has built
loyalty to your brand?
Four years prior to celebrating Hampton’s 20th anniversary,
we conducted a deep dive into what our most loyal and potential
guests preferred in a mid-scale hotel brand. These travelers helped
prioritize where Hampton needed to evolve and innovate to con-
tinue to be a leader. Hampton guest loyalty and award recognition
from business travel publications soared after our multi-year hotel
product innovation launched, which included providing a hot free
breakfast instead of the traditional continental offering and intro-
ducing a new bed experience where the linens and duvets were
laundered fresh for every guest. Just as important as our product
innovations, our brand culture also evolved to align with guests, as
did our customer messaging. Always listening is our philosophy,
how we listen to guest allows us to innovate for the future.
When you look back, what was your
favorite ‘job’ experience and why?
My favorite job was actually my most unique op-
portunity, wearing a leprechaun outfit and flying with
the Chairman of the Board of Southwest Airlines, Herb
Kelleher, while we served passengers Irish coffee on St.
Patrick’s Day. Southwest Airlines has always believed
in spirit of their team and the maintaining the person-
ality of the airline. Herb Kelleher lead by example. He
was willing to put on a green plaid suit and serve Irish
coffee to customers for a fun-filled, three-flight-jaunt
across Texas or even check bags for customers over a
Thanksgiving holiday. This type of passion is a spark
that carries any organization and should be celebrated.
Innovation comes when you allow yourself and your brand to
dream and expand. Once you dream, establish a framework to
ensure relevance, return on investment and roll out. You can
predict the future by creating it if you leverage strategic ideation.
Who has had the most influence in your
life?
I’ve had a number of influencers in my life, starting
with mom and dad. They have always believed that if I
could dream it, I could achieve it. Add to that the love
of my husband and his cheerful belief that my philoso-
phy on life is “if it’s worth doing, it’s worth over-doing.”
Top it off with an awesome daughter who inspires me
and I have an incredible and loving network of support.
What inspires you?
Strategic ideation, especially when you drop all
rules and boundaries of “reality.” Innovation comes
when you allow yourself and your brand to dream and
expand. Once you dream, you can establish a frame-
work to ensure relevance, return on investment and
roll out. You can predict the future by creating it if you
leverage strategic ideation. But first you must dream!
Which talent would you most like to have?
I would love to be an author. A unique blend of
John Grisham meets Dean Koontz with a little adven-
ture and romance blended in. Why not create a whole
new literature category! Who knows, my daughter
heads off to college next year so perhaps I’ll take the
time and discipline to take a stab at it!
Judy participating in Hampton’s
Save-A-Landmark program
What are the qualities you most admire in a per-
son?
I admire people that are passionate about what they
do and, therefore, do it to their utmost ability. Passionate
people maximize projects and are willing to collaborate and
partner to make their work better. Passionate people keep
their commitments and want the best outcome whether it
is their idea or somebody else’s. I think you can trust people
who operate based on passion for what they do.
Which book(s) are you currently
recommending?
“What Would Google Do” by Jeff Jarvis is a great read.
It makes you step back and look at your company and your
brand in a new way. One of my favorites is “Crucial conver-
sations tools for talking when stakes are high” by Patterson,
Grenny, McMillan and Switzler. This book has been a great
resource for me in managing business relationships.
What can we expect from Hampton in the future?
Expect Hampton to be your friend in town providing lo-
cal advice and supporting you in your travels and you can
expect Hampton to continue our innovations in service and
product based on your values.
What’s your advice for a novice loyalty marketer?
Play to your strengths. To do this, you need to under-
stand yourself. I highly recommend reading “Now, discover
your strengths” by Marcus Buckingham. Take the online as-
sessment and understand your strengths…and play to them! L
Loyalty Management™ • SPRING 2010 19
 LOYALTY FORUM: BOOKS

Loyalty Reads
10 TRUTHS ABOUT LEADERSHIP…It’s Not Just About Winning
by Pete Luongo
August 2007 | Clerisy Press

In a world where greed and winning at all costs has permeated organizations from youth sports to Fortune
Top 50 companies and everything in between, everyone is faced with the same challenge: How do we not fall into the trap
of compromising our core values as we chase the end game? Can we create an environment where winning (success however you measure it) and
employees feeling valued, respected, and part of something special are mutually inclusive? The answer is a yes!
Prior to the publication of 10 Truths About Leadership…It’s Not Just About Winning and his full time speaking career, Pete was President/CEO of
the Berry Company, a 1.5 billion dollar yellow page advertising agency. Since retirement Pete has devoted himself to giving back through his book,
speaking engagements, board membership, and by serving as executive director of the Center for Leadership and Executive Development at the
University of Dayton where he also serves as an adjunct professor teaching leadership at both the undergraduate and graduate levels.
Pete has been fortunate to work with 100+ companies, collegiate athletic programs and numerous other organizations sharing his behavior
driven model “The Leadership Pledge”, developed while he was at Berry, that focuses on people, support, expectations, feedback, and accountability.
The ten truths are life’s lessons that help each of us understand that our lives will be valued by our willingness to make a difference in other people’s
lives. Coaching and inspiring leadership at all organizational levels is Pete’s passion: his message will move and inspire you.

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

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

When all is said and done, everybody wants to know they have made a difference in someone’s life. Regardless of your
personality type, background or age, you can choose to create an inspirational transaction and positively impact people
around you, or as chief inspirational officer Terry Barber calls it, your “Inspiration Factor.”
And when the “Inspiration Factor” goes up, according to Barber, so does loyalty that can be applied to all facets of life—
family, employees, team members, customers, donors, and friends.
Barber reveals the seven principles of inspiration and how implementing even one of them can positively impact
someone’s life. Implement all seven and you will change the very culture in which you live and work. When the principles are
applied at home, families become safe and fun environments. When applied at work, team members become more loyal as
do customers, clients, and donors.
Throughout The Inspiration Factor, Barber uses insights, humor, and gripping stories to impart the seven proven principles
and will help you—as an individual and as part of an organization—to:
•Be the most valuable team leader in your company
•Grow your sphere of influence
•Manage up
•Get ahead by inspiring those around you
•Revitalize your company culture after a very difficult economic down time

20 Loyalty Management™ • LOYALTY360.ORG

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

Find out how the fate of your B2B Company rests in the hands of relatively few people, and what you need to do about it.
The world for executives in Business to Business (B2B) companies is critically different from the world of their
Business to Consumer (B2C) counterparts. All too often B2C strategies and tactics are applied to B2B companies, which
leads to disappointing, even disastrous results. B2B requires a completely different playbook.

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

This book is an absolute necessity if:

•Your top customers account for a large amount of your revenue •Relationships with real decision makers of your most important
•Your strategic planning meetings are unproductive or frustrating customers are questionable
•Your company’s margins are being threatened or eroding •You struggle to measure the ROI on marketing or R&D programs
•You have lost or are at risk of losing top customers •Your re-branding efforts have fallen flat
•You have had new products fall short of revenue, margin and/or market •Your senior team disagrees on how to move the company forward
share goals •Your organization gets activity confused with results
In this groundbreaking book, Sean Geehan draws upon over 20 years of experience to outline the proven characteristics of successful B2B companies
and the strategies they must adopt in order to survive and thrive. He and his team highlight case studies and research from market-leading compa-
nies such as Harris Broadcasting, Crown Partners, Nuance, Henny Penny, Salesforce.com, Springer Publishing, AmerisourceBergen, Kodak, Intes-
ource, Oracle, and more to prove what practices succeed and why others fail.

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

It’s the number one goal of every salesperson: getting access to
senior client executives—the C-Level decision
makers responsible for approving top-dollar
deals. But getting there may be harder than you
think…Did you know?
•Today’ sale processes have a 97 percent failure
rate
•2 of the top 3 reasons a salesperson wins or loses
sales is because of relationship and reputation
•When a salesperson ‘cold calls’ an executive they
have a 4 percent chance of actually meeting them
•When a salesperson establishes a relationship
with an executive’s subordinate and are introduced
through them, their chances of actually scoring a
meeting with the executive jumps to 84 percent.
Bottom line: to make it to the top, you have to know
what are most likely behind your customer’s thought process when it
comes to making investments with suppliers.
Former executive director of Ernst and Young’s revenue
growth and risk management practice and senior partner
advisor at KPMG, Read, a recipient of the International
Business Award for Best Sales Trainer, has sold in every
conceivable forum—from the bazaars of Cairo to the kara-
oke boats of Tokyo; from the lounge rooms of Melbourne
to the boardrooms of Manhattan…all with unbelievable
success.
In an informative and eye-opening interview, Read
can reveal what every executive wants you to know
about selling to the top including:
•The 8 drivers of executive decision making and
how each one dictates the sales process
•How to make sure you are not giving the right
message to the wrong audience
•The top secrets for persuading key decision mak-
ers
•How to gain access to senior client executives responsible for approving
top-dollar deals
•The steps to go from simple salesperson to top trusted advisor

Loyalty Management™ • SPRING 2010 21

 FEATURES

What is Your Behavioral

Economics IQ?
by John H. Fleming, Ph.D., Gallup Consulting

“Applied behavioral economics is

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

D riving higher levels of growth and profitability

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

What is Behavioral Economics?

For the past 30 years, behavioral economics—led by
such notable scientists as Daniel Kahneman, Robert Shiller,
Richard Thaler, Angus Deaton, George Loewenstein, and
others—has documented flaws in classical economic theory
by challenging its foundational premise—that individuals
always behave rationally to achieve the best possible out-
come. Instead, behavioral economics emphasizes the role
of psychology and the interplay among rational, perceptual,
and emotional processes in decision making and economic
behavior. In fact, some suggest that economic decision mak-
ing is 70% emotional and 30% rational.
Throughout much of its history, classical economics has
embraced the view that Homo economicus, or “economic
man,” makes decisions based on a cool and rational evalu-
ation of the potential costs and benefits. The right decision
is the one that maximizes an individual’s economic gain and
minimizes his or her costs. But there are anomalies we must
take into account—situations in which real people’s behavior
simply does not conform to the predictions of classical eco-
nomics. For example, people often use simple rules of thumb
or shortcuts called heuristics to make decisions which can
lead them to overestimate the likelihood of an event based
on how typical, how easy to recall, or how vivid the event is.

22 Loyalty Management™ • LOYALTY360.ORG

 Some suggest
that economic
decision
making is 70%
emotional and
30% rational.
Other anomalies include the endowment effect, whereby
people place greater value on objects they own compared
with objects they do not own. That is, people tend to demand
a higher price to part with an object they already own than
they would be willing to pay for it to begin with. Another is
the tendency for decision makers to be loss averse. People
feel more pain from losing than pleasure from achieving
gains of equal size. For example, individuals tend to be re-
luctant to accept the prospect of a 50-50 chance of winning
or losing money unless the amount to be won is at least twice
the amount to potentially be lost.
In the board room and at the leadership level, principles
of behavioral economics play out in many decision-making
situations, with substantial implications for organization-
al performance. From the biasing effects of sunk costs, to
the tendency to be swayed by how a decision is positioned
or framed, to the tendency to be resistant to changing the
status quo, executive decisions are vulnerable to the ill ef-
fects of cognitive and perceptual biases and heuristics. For-
tunately, many of these effects can be overcome—or at least
reduced—with training, awareness, and discipline. But be-
fore they can be overcome, executives must be made aware
of them and the situations in which they are likely to arise—
they need to increase their BE IQ.
Dozens of heuristics and biases have been documented
in behavioral economics literature—far too many to describe
here. But the upshot is that our emotional, cognitive, and
perceptual processes limit how rationally we view the world
around us and use the information we receive from it. These
limits have a profound effect on the decisions we make—and
on the way organizations need to think about how their em-
ployees and customers make decisions and behave.
Applying Behavioral Economics and Evolving our
Institutions of Data
At Gallup, our goal is to take the discoveries of behavior-
al economics and apply them to management and business
problems. We develop tools and methods to measure and
manage both the rational and irrational elements of human
nature to drive business success. For Gallup, applied behav-
ioral economics is the mathematical description of the role
human nature plays in just about…everything. This defini-
tion spans the spectrum of issues from how customers and
employees create real growth for organizations to how citi-
zens and institutions build stable and viable societies.
Until recently, principles of neoclassical economics have
guided capitalism. This discipline and its associated institu-
tion of financial data—stock price, earnings per share, profit,
and growth—is what business leaders are trained upon to
steer their organizations, divisions, and departments. In
general, this model has served global business leaders quite
well. But recent developments in the global economy and the
financial markets since the beginning of 2008 underscore
its limitations. It is becoming clear that without the insights
from fields such as networks and complex interactions, psy-
chology, and econometrics—neoclassical economics may
lead us down the wrong path. Classical economic indicators
provide trailing indicators of performance—by the time a
sale is made and the profit appears on the income statement,
it is too late to do anything about it. In addition, any incre-
mental benefits of accounting or other financial efficien-
cies have largely already been realized. Further substantial
gains in performance based on attention to neoclassical
economic metrics are relatively unlikely, and additional en-
hancements offer little in the way of competitive advantage
continued on next page »
Loyalty Management™ • SPRING 2010 23
 What is Your BE IQ? (continued)
for most firms.
The next institution of data to emerge was tied to process
improvement and quality management—Six Sigma, lean
manufacturing, and Total Quality Management, for exam-
ple. This institution of data worked well to improve output
quality and wring inefficiencies and costs out of business
processes, making organizations more efficient, effective,
productive, and profitable. But like financial metrics, much
of the benefit of focusing on process and quality metrics has
been realized and big gains are harder to find. While quality
is necessary—and declining quality is likely to be a leading
indicator of future declines in performance—improvements
in quality are unlikely to provide significant competitive
advantage for most companies. For many organizations, in-
cremental improvements in operational efficiency may con-
tinue to provide some cost-reduction benefits, but they will
yield little in the way of additional competitive advantage.
We believe that the next big institution of data will be
found in developing leadership initiatives and metrics based
on principles of behavioral economics because the gains to
be found are much larger than in other areas and the po-
tential is largely untapped. Mastery of applied behavioral
economics holds the promise of realizing breakthrough im-
provements in employee productivity and customer reten-
tion—and real growth and profitability.
Our work with organizations around the globe has
taught us that every company has an enormous—but largely
untapped—potential for breakthrough improvements in em-
ployee productivity, customer retention, and real growth
and profitability by understanding and leveraging how hu-
man nature drives business performance. This unrealized
Every company has an enormous—but largely untapped
potential for breakthrough improvements in employee
productivity, customer retention, and real growth and
profitability by understanding and leveraging how human
nature drives business performance.
24 Loyalty Management™ • LOYALTY360.ORG
potential represents an internal economy with its own set
of rules and dynamics—an emotional economy—that can be
measured and managed to improve business performance.
Most important, the emotional economy drives the neoclas-
sical economy.
What Is Your Behavioral Economics IQ?
The rise of applied behavioral economics as a manage-
ment platform is of paramount importance to business lead-
ers because it compels us to rethink the traditional rational/
functional models of human decision making that guide
many business decisions. But before organizations can har-
ness the power of applied behavioral economics, they must
increase their BE IQ by gaining an understanding how the
emotional economy works in their organization and in the
larger marketplace. Next, they must align their business
processes and key performance metrics to take full advan-
tage of the insights afforded by a behavioral economics per-
spective. Finally, they must deploy these insights effectively
to manage and optimize their employee and customer rela-
tionships.
From a behavioral economics perspective, high perfor-
mance organizations recognize the need to understand and
accept human nature and capitalize on it to select and posi-
tion employees, manage, motivate, and engage them, accel-
erate their development, and unleash innovation and pro-
ductivity, all to ultimately engage the emotions of their most
valuable asset—their customers. Increasing your company’s
BE IQ is the next vital management discipline and the key to
superior performance and long-term growth. L
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9
 FEATURES

“Sex Appeal”
Men and Women are
Loyal to Different Things
by Dr. Bob Deutsch, Brain Sells

I n my work as a cognitive anthropologist I study how

the mind works, how people “make meaning,” how people
form attachments and loyalties to things, how people make
decisions. Decisions like how to select what to invest in,
whether products or mates; why and under what conditions,
people prefer Coke over Pepsi (or vice versa), Charmin over
Cottonelle; why a person goes for one type of reward and
not another; why a person believes in one God over another.
In that search I have inadvertently uncovered something
about viva la difference: WOMEN CYCLE, MEN CONSUM-
MATE. Marketers need to understand the implications of
this difference to maximize customer engagement and com-
mitment.
The male is oriented to the present, the concrete, the
visual, the “hit,” the win, the “me.” Evolutionarily speaking,
the male must bring home the bacon. No Dilly-Dallying. No
excuses. The male is in the immediate, the “now”.
The female is oriented to the conceptual, to underlying
dynamics, to the relationship between things, and to stabil-
ity over the long-term. The female understands and sees
patterns over time.
Males and females both think of themselves as prag-
matic, and pragmatism is intimately tied to loyalty. However,
a man and a woman are pragmatic in completely different
ways.
Males act and say things like: “You’ve got to act, you can’t
wait too long.” “You must know how to look at the environ-
ment, know what the data and specs mean. Then pounce.”
“My goal is feeling powerful and getting peoples’ attention.”
Females act and say things like: “It takes time to have
things in order.” “I want to feel good about where I am and
what I’ve done.”
“My goal is continuity, building positive relationships, and
establishing long-term stability.”
For example, a Seattle couple that started a small busi-
ness together has different ideas about inventory. Wife: “I
live to reinvest in inventory when I have cash, so I can buy
stuff off-season and sell it next year at a bigger profit. I also
like to have inventory just as a customer service.” Husband:
“Get rid of inventory as fast as possible.”

Males and females both think of themselves as pragmatic, and

pragmatism is intimately tied to loyalty. However, a man and a woman
are pragmatic in completely different ways.

26 Loyalty Management™ • LOYALTY360.ORG

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

F emales want to understand things and want to be understood. Males are

more focused on explanation.
Explanation entails seeing the world as governed by finite laws that humankind
can direct through successive approximations. Understanding requires compre-
hending meaning from the inside out, in its unfolding. To understand, the world
can’t be approached from solely an intellectual stance.
In general, the two genders have different ways of perceiving time, causality and
power. This implies six strategic principles to consider when designing offerings
to increase customer engagement. For each principle, males and females fall to
diametrically opposite ends of a continuum:
PATTERN OR POINT. Women are intrinsically inclined to perceive more than the
metric of a product attribute or an instance in time; they appreciate the underly-
ing pattern (idea) that gives rise to the fleeting moment. Men look for and want
explicit things that they can act on and display, now.

UNDERLYING AUTHENTICITY OR IMMEDIATE APPEARANCE. For men and

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

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

CONNECTEDNESS OR INDIVIDUALITY. Females prefer that communality sup-

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

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

RELATIVITY OR ABSOLUTISM. Women tend to recognize that almost all issues

have grays, and exaggerations to one side or the other only cover-up the reality
of subtlety and nuance. Males like to paint things in clear, black-and-white terms.

Male: Do what you set out to do and finish the job. Female: Evolve.
Male: Achieve. Female: Experience.
Male: Stay on top of things. Female: Create good relationships.
Male: Get the biggest piece you can. Female: Seek inner peace.
Developing and engaging in a long-term relationship with women customers is
not as easy as ‘pretty in pink’ or ‘basic black.’ Men are not as straightforward as
“I’m Number One.” But knowing the inner reality of the genders can help generate
more loyal consumers and help marketers feel more in the pink by putting them
more in the black. L

Loyalty Management™ • SPRING 2010 27

 FEATURES

M uch has been written about how to im-

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

Communicate, Communicate, Communicate

When we first started analyzing the data, one of
the surprises was how strongly communication (from
either the service technician doing the repair work or
from someone at the client company) correlated with
overall satisfaction and willingness to refer. This rela-
tionship continues still. In the words of one of our in-
terviewers, “Customers have an immense amount of
patience with the repair process for large machinery.
They simply want management and technicians to com-
municate openly and honestly throughout the process.”
Effective communication must happen throughout
the service process. It begins when scheduling the ser-
vice. The phone system should be set up so customers
can easily reach the desired person. Customers want to
know when the repair will be started and if it is not to
be completed when expected. They want some idea of
the cost. The communication process needs to be ongo-

Lessons
Customers want to know
when the repair will be
started and if it is not to be
from the completed when expected.
They want some idea of the
Frontline: cost. The communication

B-to-B
process needs to be ongoing.
If there is a change in when
the service is expected to

Customer be initiated or completed,

customers want to know.

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

28 Loyalty Management™ • LOYALTY360.ORG

For top-performing clients,
there is less variation
in customer responses
from location-to-location,
period-to-period, and
measure-to-measure
than for clients that are
performing less well.
a certain amount to let the customer know how much
the invoice is, what was done, and answer any ques-
tions. As a result, disputes have been greatly reduced
and collections have improved.
When effective communication doesn’t happen, we
see the impact. We ask customers to rate their willing-
ness to refer this client to someone else needing this
type of service. When the customer gives a low rating,
we ask why and code the reason(s). Reasons to do with
poor communication (from the technician or other cli-
ent personnel) are either the first or second most fre-
quently mentioned reason for getting a low referral rat-
ing. Communication does TRULY matter!
Consistent Service Delivery Is Essential
When we compare the metrics of top-performing
clients with those of the bottom-performing clients
we see significant differences and not just in the key
performance metrics. For these top-performing cli-
ents, there is less variation in customer responses from
location-to-location, period-to-period, and measure-to-
measure than for clients that are performing less well.
This consistency speaks to two things these clients
have done quite well. First, the processes they have in
place are effective, though not necessarily elaborate or
fancy. They allow customers to quickly reach a needed
contact person. The employee has the needed tools and
information to effectively deliver the service. Employ-
ees pay attention to communication. Another trait of
the top- performing clients is the culture present in
the company. There is a palpable customer focus that is
present among all employees. Employees are acknowl-
edged for doing a good job. There is a focus on effec-
tively solving customer problems.
The importance of consistency is not surprising. Past
experiences create a knowledge base for the customer.
If the experiences are generally positive, customers be-
gin new service experiences with the assumption that
experiences are likely to be positive. If past experiences
are less positive, too often customers start new service
experiences assuming the worst. Even if the new expe-
rience is positive, it may not be seen that way because of
accumulated experience.
Performance Accountability Matters
The online system that is part of the ServicePerfor-
mance program is called LinkConnect. We use this tool
as the platform to manage client data, enter interview
results, and share results with our clients. The system
also provides information on who is using the tool.
Among the better performing clients, there are a few
things we have observed:
a. Employees at better performing locations tend
to be more frequent users of the online system
than are others. They use the feedback to find
out how the location is performing and make
changes accordingly.
b. Senior level managers are frequent users as well.
They are able to drill down and see how a loca-
tion is performing. Those that need improve-
ment become a focus; those that are performing
well are recognized.
c. There is a regular review process in place to de-
termine improvement opportunities.
Our experience with ServicePerformance is con-
firming the old adage that “you manage what you mea-
sure.” This was confirmed by the comments of one cli-
ent not too long ago. This client is a newer client. She
continued on next page »
Loyalty Management™ • SPRING 2010 29
 Lessons from the Frontline: B-to-B Customer Service (continued)

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

High Quality Service Can Be Delivered in a Down

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

NPS Score (January 2008 - October 2008)

90%
79%
80% 73% 76% 72% 78% 78% 78% 71%
77% NPS
69% 6 mo moving avg.

Performance improves
70%
Number over points is
60% monthly NPS score.
50% #Responses

with the frequency 40%

30%
January ‘08
February
March
70
55
59

with which employees

20% April 53
10% May 27
0% September June 45

October
August
February

May

July
January ‘08

have been informally

March

April

June

July 55
August 24
September 41

recognized for doing a

October 53

good job. Something to

do that is simple, easy,
and costs nothing yet is
often overlooked!
This client is not the only one with a track record like this.
There are several others. Managers have made this improve-
ment happen by having a clear focus on improving the areas
that matter most to customers. They know, in the case of one
client, that customers rated them poorly on the job getting done
right the first time. After technicians improved their perfor-
mance, customer satisfaction rose. In the case of another cli-
ent, the regular feedback has prompted employees to pay more
attention to quantity and quality of customer communication
while service is being rendered. Again, customer satisfaction
improved.

30 Loyalty Management™ • LOYALTY360.ORG

If You Want Outstanding Customer
Service, Focus First on Employees
There are two clients in the ServicePerfor-
mance program that are consistent top per-
formers in their industry. When asked how
they did it the reply was the same: culture.
They went on to say that having a strong fo-
cus on customers is a result of many things but
one of the most important is recognizing em-
ployees when they do well. This informal find-
ing is buttressed by research done by Gallup,
the research and polling organization. Their
research showed twelve areas that were the
most important in differentiating companies
with superior financial performance from
those that performed less well.
One of these areas is the frequency with
which employees have been informally recog-
nized for doing a good job. Doing something
that is as simple and easy as an email, and
costs nothing, is yet often underutilized.
One particular story from our database
illustrates the power of a positive comment.
During an interview for one client a customer
mentioned how pleased he was with a recent
service because of the technician who did it.
The technician’s name and accolade was re-
ported back to the client’s senior management.
The details of this positive customer service
experience that the technician was respon-
sible for was then forwarded by the president
to all 1,600 employees. It included a note ac-
knowledging the technician’s good perfor-
HEAR LYNN SPEAK AT THE 2010 LOYALTY EXPO PRESENTING
mance and reinforcing the fact that this is the
kind of “Oh, Wow” service that is part of the
company’s strategic plan.
Strengthening the Engagement
While service delivery in business-to-
business industries is very different than in
Between Industrial Customers &
consumer markets, there are similar lessons
to be learned for improving the customer ex-
Employees: Little Things Matter
perience. When developing strategies for im- “Among our current economic challenges, many industrial markets are
proving customer service, we advise our cli- facing more competition for a smaller pool of customers. Price and
ents to focus on three primary areas: Process, product advantages are easily duplicated, but top quality customer
Skills, and Attitudes. Of these three, the most service is much more difficult for competitors to overcome. As a result,
important we find, is having people with the industry leaders are focusing on measuring, managing and improving
right attitudes. If the attitudes are positive, their customer experience.
employees will develop the skills and look for I am looking forward to the Loyalty Expo where I will provide
ways to improve processes. Attitudes are the benchmark information that our clients are using to gauge progress in
all important building block for outstanding improving customer service. I will also discuss which benchmarks are
customer service. L most strongly correlated to high levels of customer satisfaction.”
-Lynn Daniel, The Daniel Group

Loyalty Management™ • SPRING 2010 31

 FEATURES

Establishing Key Metrics

for Measuring the Value
of Loyal Customers
by Laura Patterson, VisionEdge Marketing

I t was Peter Drucker who said “that the purpose of business is to create a customer.” Phil Kotler went on to tell us that marketing
plays a very important role in this effort when he defined marketing “as the science and art of finding, keeping and growing profit-
able customers,” (Kotler on Marketing, 1999). Over 20 years ago, the TARP (Technical Assistance Research Program, U.S. Office of
Consumer Affairs, 1986) studies found the cost of attracting a new customer was five times the cost of keeping a current customer.
Research since has well proven there is a link between customer satisfaction, purchase decisions, customer experience and customer
loyalty and tenure.
Research findings have consistently found that highly satisfied customers have a strong relationship with an organization and
generally buy more or own more of an organization’s products and services. And these highly satisfied customers are also more likely
to become recommenders. Customer buying more and referring more contributes to increased customer value. And the flip side also
seems to be true—sub-par customer experience leads to customer dissatisfaction, attrition, diminished purchases and ultimately
an increase in cost per customer, which erodes customer lifetime value. So it makes sound business sense to take care of our most
important asset, our customers and to maintain satisfied and loyal customers.

32 Loyalty Management™ • LOYALTY360.ORG

 There are some excellent examples in various indus-
tries that demonstrate the link between customer experi-
ence, satisfaction, loyalty and market share. For example,
Southwest Airlines and Nordstrom’s are both known for
setting the standard for consistently delivery extraordi-
nary customer service in their industries. And several of
the largest U.S.A. banks have entire departments devoted
to providing excellent customer service. Studies in the re-
tail industry found that the more service behaviors exhib-
ited the more likely customers were to be highly satisfied
with their overall experience.
According to The Service Profit Chain (Heskett, Sasser
and Schlesinger, 1997), the more satisfied customers are,
the more likely they are to be converted into loyal custom-
ers, that is, customers who are more likely to repurchase
and recommend. In the banking industry, studies have
The real challenge
then is for
every company
to develop
highly satisfied
customers and
strong advocates.
also shown a clear relationship between advocacy and
service quality. The MSR group study (published 2007)
found that 65 percent of U.S. consumers are advocates
of their bank, that is they are both willing to recommend
their bank and intend to open additional accounts (repur-
chase).
Studies in the hospitality industry found a link between
hotel employee engagement and guest satisfaction. Ho-
tels with employees who can align their attitudes and be-
haviors with guest expectations are more likely to create
guest loyalty. The real challenge then is for every compa-
ny to develop highly satisfied customers and strong advo-
cates. In the 1990s, customer satisfaction was all the rage
as a key metric. Today, it has been replaced with customer
loyalty and customer experience. A recent study from
Aberdeen Research, “Recessionary Marketing: How Best-
in-Class Companies are Weathering the Storm”, polled
250 marketers across various industries, and found that
82 percent of respondents have reallocated their market-
ing spending to invest in more customer-centric activities
that tie back to bottom-line revenue. As a result, their
metrics will need to change as well. Metrics related to
brand awareness and shareholder value are being pushed
further down on the list, while metrics related to custom-
ers such as share of wallet, loyalty, and customer reten-
tion equity are moving to the front of the line.
In addition to lifetime value and retention, there are
six additional key metrics to consider when it comes to
measuring customer value:
1. service quality,
2. touch point effectiveness,
3. customer satisfaction,
4. customer experience,
5. customer advocacy and
6. customer share of wallet
These six serve as valuable indicators of lifetime value
and retention. Customer retention continues to be one of
the most important yet misunderstood areas of customer
strategy. While there are many things C-level executives
need to know about customer retention, the most impor-
tant is that any strategy you undertake to keep customers
must be done under the overall heading of creating value
for your enterprise and your customers.
Keeping your existing customers and growing their
Customer
Lifetime Value
Retention Equity
Customer Loyalty/
Advocacy and
Share of Wallet
Customer Satisfaction
and Customer Experience
Service Quality and Touch Point Effectiveness
value requires having a full understanding of their wants,
needs and desires. This often requires a company to
switch from a transaction perspective to a loyalty-build-
ing perspective.
FIVE STEPS TO KEEPING YOUR CUSTOMERS
1. UNDERSTAND WHAT CUSTOMERS VALUE
a. Don’t assume you know what your customers
want
b. Do your homework—Conduct frequent cus-
tomer research
2. BE PROACTIVE—ANTICIPATE FUTURE NEEDS
a. Understand whether solving future needs
means new or different product features, bene-
fits, changes in services, etc., and put these into
play before the customers leave your company
to find what they want somewhere else.
3. DELIVER ON YOUR PROMISES
a. Your word is your bond
b. If anyone makes a promise, keep it.
4. DELIVER YOUR PRODUCT AND SERVICES
CONSISTENTLY EVERY TIME
5. CULTIVATE LONG-TERM RELATIONSHIPS
In addition to customer retention (churn/attrition), cus-
tomer satisfaction, and loyalty every company should be
familiar with and know how to calculate metrics related
to experience, share of wallet, value and advocacy. These
metrics are vital to helping you keep and grow the value of
your most important asset, your customers. L
Loyalty Management™ • SPRING 2010 33
 FEATURES

Customer Satisfaction:
Keeping Score Is Only
the First Step
by Karl Sharicz, SimplexGrinnell

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

T he science of customer satisfaction management

has come a long way in a short time. It seems like just
a few years ago most companies were still gathering feed-
back with a few telephone surveys or an annual business
reply card mailing. No one had heard of a “Net Promoter
Score” (NPS) or an “Enterprise Feedback Management”
(EFM) system.
Now that we have more sophisticated survey tools and
powerful mechanisms for measuring and benchmark-
ing customer feedback, it’s easy to become fixated on the
scores themselves. All too often people know their satis-
faction score or loyalty index—by department, by region,
by product, or by vertical market—but they don’t have a
clear sense of how they achieved those scores or, more im-
portantly, how to improve those scores.
How do we get beyond mere measurement mental-
ity and into actually moving the needle and improving
customer relationships? That’s the challenge we’ve been
working on in the Customer Intelligence Group at Sim-
plexGrinnell, and I believe our results could provide valu-
able lessons and insights for other companies.
Eight Percent Improvement in 90 Days
SimplexGrinnell is a leader in the fire and life-safety
industry and has over 150 offices throughout the United
States. In our business, it is critical for us to measure and
monitor customer satisfaction at every interaction—from
technical phone support from corporate to field support
through our local district offices. We want to know our
customers so well that we have the ability to provide a
service before they even request it.
In 2004, we began an overhaul of our customer
satisfaction (CSAT) program to get closer to the truth
about our customers’ experiences. We wanted to mea-
sure and report on customer feedback in an open and
Analysis led to insights
that helped answer the
crucial “why” questions: If
a customer was not entirely
satisfied, why not?
honest way and establish consistent metrics so we could
monitor our progress.
With the help of the MarketTools CustomerSat
product and concepts from “The Loyalty Effect,” by
Fred Reichheld, we focused on five key measurements,
one of which is SimplexGrinnell’s “Net Customer Advo-
cacy” or NCA, which subtracts detractors from advo-
cates and provides a ranking on a five-point scale (it’s
similar in concept to NPS). Using NCA gave us a con-

34 Loyalty Management™ • LOYALTY360.ORG

 We’ve seen that people appreciate having
hard data to show them how to improve,
what to improve, and where to focus.
sistent way to assess company performance,
regional performance, and local office per-
formance.
Our NCA scores and rankings based on
customer surveys are accessible in real-
time to every district and regional office by
way of the MarketTools CustomerSat EFM
solution. In early May 2009, one of our re-
gional managers approached the Customer
Intelligence Group to ask how they could
improve their regional NCA score ranking.
The real question revolved around deter-
mining root cause—knowing exactly what
might be keeping their customers from be-
coming more loyal and stronger advocates.
The Customer Intelligence Group de-
veloped a plan to increase that region’s
NCA score, drawing on the capabilities of
the MarketTools CustomerSat EFM solu-
tion. Specifically, the plan gave each district
manager full access to the data, feedback,
and analytical capabilities contained with-
in the EFM, including customers’ answers
to open-ended questions about their satis-
faction.
Collectively, this analysis led to insights
that helped answer the crucial “why” ques-
tions in detail: if a customer was not entirely
satisfied, why not? What exactly had gone
amiss? Which issues weren’t resolved ac-
cording to expectations? Were there com-
mon themes among the detractors’ com-
ments? Were comments directed at specific
products or services?
As a core element of the NCA improve-
ment plan, the Customer Intelligence
Group arranged and scheduled individual
one-hour workshops for each of the dis-
trict teams within the region. Attendance
was required for the regional manager, the
district general manager, and the technical
support manager. Other stakeholders in the
district were strongly encouraged to attend.
At the workshop, detailed survey find-
ings extracted from the MarketTools Cus-
tomerSat database were delivered to the
team. The presentation included:
•Customer ratings for each service
touchpoint of the transaction
•The key drivers of customer satisfaction
for each district
•The demographics of the customers
randomly surveyed for each district of-
fice
•Verbatim customer comments
It is important to note that the customer
commentaries were presented randomly
and without identifying the organization
or the customer who took the survey. This
was done to keep the focus on the issues at
hand rather than the individuals taking the
survey.
At the conclusion of the initial workshop
session, the Customer Intelligence Group
scheduled a 90-day review session, with
the understanding that each district would
by then have implemented their action plan
and be in a position to articulate how that
plan led to changes noted in their NCA
scores.
At the 90-day review session, it was
discovered that this region—through the
actionable intelligence provided by the Cus-
tomer Intelligence Group coupled with a
concerted focus on customer service—had
improved its NCA score a full eight percent,
thereby achieving their primary goal. In-
terestingly, during the same period, other
regions’ NCA scores changed by an average
of one percent, a clear indication that the
improvement resulted from the workshop
and subsequent action plan implementation.
Moreover, as the experiment contin-
ued so did the increase in NCA scores. At
the 180-day review session, the region sur-
passed the 10 percent improvement point;
and the most recent quarterly snapshot of
NCA performance by region suggests that
this region has made significant progress
toward being in the top position among all
regions for NCA. This is truly a remarkable
and commendable achievement.
We’re now finding that any skepticism
that might have existed in regard to our
NCA rankings and our EFM system have
been transformed to enthusiastic accep-
tance—from senior management to techni-
cal specialists and operations personnel.
We’ve seen that people appreciate having
hard data to show them how to improve,
what to improve, and where to focus.
continued on next page »
Loyalty Management™ • SPRING 2010 35
 Customer Satisfaction: Keeping Score is Only the First Step (continued)
Best Practices from Lessons Learned
The actions taken by each district within the region
varied according to their unique customer satisfaction
drivers, but in general terms here are just a few of the
practices that led to NCA score improvement:
•All key service personnel were encouraged to read the
verbatim customer comments stored in the Market-
Tools CustomerSat system.
•Senior management within the district used the data
to understand the experiences of customers more
completely so that they could engage with them more
directly.
•As a result of the data, more emphasis was placed on
returning customer calls and calling customers in ad-
vance of service visits.
•Individual employees were recognized for service
excellence through “top 10” and “kudos alert” noti-
fications generated by the MarketTools CustomerSat
system.
•A concerted effort was made to achieve a first-visit fix.
•The frequency of customer visits, especially by dis-
trict managers, was increased.
•Achieving faster service recovery was made a higher
priority.
•Employees were empowered to resolve certain issues
directly with the customer without the need for man-
agement intervention.
•Customer feedback and customer issues were added
to the forefront of all service team meetings within
the district.
So for us, it was important
not only to accurately
measure the quality of our
customer relationships,
but to take action to
improve those metrics.
36 Loyalty Management™ • LOYALTY360.ORG
Be Prepared to Respond to Feedback
The MarketTools CustomerSat EFM system used at
SimplexGrinnell now handles more than 10,000 surveys
and other forms of customer feedback each year and stores
more than 35,000 verbatim customer commentaries. See-
ing the results achieved by one region, other regions have
become more interested in the improvement process and
the capabilities of the system. But as we’ve expanded our
customer satisfaction program, we’ve always kept one key
concept in mind: if you ask customers for feedback, you
have to be ready to respond to what they tell you.
That is why the Customer Intelligence Group has fo-
cused on developing and implementing consistent pro-
cesses for managing customer issues on a global basis. We
strive to act not just as an escalation channel for customer
problems but as a clearinghouse for all activities related to
customer relationships.
In the words of our company president, Jim Spicer,
“Customer satisfaction is not simply a program here; it’s
part of who we are—it’s ingrained into the fabric of our
company.”
We know that the quality of the customer experience
is the true differentiator for SimplexGrinnell, not just
the quality of our products and services. So for us, it was
important not only to accurately measure the quality of
our customer relationships, but to take action to improve
those metrics. MarketTools CustomerSat has played an
integral role in our ability to do that. Today we have a plat-
form in place that allows us to be much more proactive
in anticipating and responding to customer needs—so we
can consistently deliver offerings that exceed customer
expectations. L
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 FEATURES

All I Really Need To

Know About CRM I
Learned In Couples
Counseling
For a winning approach to nurturing your most
important business relationships, look no further
than the counselor’s couch
by Greg Nelson, agencyQ

I f you’ve ever been one-half of a couple, you know

this relationship is one of the most complicated you’ll ever
navigate. The peaks and valleys of relationships with our
ergy? Figure out whom to target, and where to concentrate
your efforts. Also, get clear on what you have to offer.

“significant others” can simultaneously confound, confuse,

complement and complete us.
But too many valleys drive many couples straight to
the counselor’s office—where, if our mediator is skilled, we
learn strategies for improving the way we perceive, interact
with and relate to our “better half.” We learn to look at the
whole individual, rather than seeing only what we want to
see. We learn to help them understand where we’re coming
from. We learn how to bring out the best in them. And we
learn how to communicate directly, rather than assuming
we know what they’re thinking or expecting them to read
our minds.
Customer Relationship Management (CRM) is a lot like
being half of a couple. The tips we get from couples’ coun-
selors can serve us well as we work to manage, sustain and
nurture our business’s most vital relationships.
The Dating Game
Formulating a CRM strategy is a lot like dating. On the
surface, that can sound like fun. But talk to a perpetually
single guy or gal, and he or she will tell you that dating can
be a lot of work.
If a successful relationship is your goal, you can’t just
wade half-heartedly into the dating pool. You need to do
some research and preparation. What types of people may
be right for you? What types are clearly not worth your en-
You think you know what your
customers want. But have you asked
them? Ask, directly and specifically,
what they’re looking for in the
relationship. That way, you can give
them what they want—and get what
you want from them.
Show Some Affection
Let’s say you’ve chosen well. Things are progressing. But
you notice some distance. Are you reminding your custom-
ers that you care for them? To cement your credibility and
build goodwill, you’ll want to show more than tell. Remind
them of why they’ve chosen you.
Make No Assumptions
You think you know what your customers want. But have
you asked them? You may have been off base—or things may
have changes. Ask, directly and specifically, what they’re
looking for in the relationship. That way, you can give them
what they want—and get what you want from them.

38 Loyalty Management™ • LOYALTY360.ORG

Let Them Know They’re Being Heard
When you do ask questions, listen carefully to the re-
sponses. And let your customers know they are being heard.
In any relationship, people want to be understood. That in-
cludes your customers. They’re not simply there to listen to
you and your stories. Your customers need to know you are
taking what they tell you to heart. Once customers have spo-
ken, lip service on your part won’t do. To keep them with
you, you’ve got to demonstrate that you value their input,
ideas and feelings.
Demonstrate Appreciation
As we get more comfortable in a relationship, we tend
to take the other for granted. No one likes this—and most
people won’t stick around if they’re getting that feeling. So
thank your customers for what they do for you and your
brand—for their loyalty, their referrals, their ambassador-
ship. Make ongoing efforts to let them know they’re greatly
appreciated.
Don’t Get Clingy
At the same time you’re showing love and appreciation,
you need to be careful not to cling to your customers. It’s
fine to let them know you miss them—but don’t go overboard,
or they’ll be turned off, perhaps even suspicious. Avoid the
temptation to call or e-mail your customers too frequently,
especially when they’re at the office, or you risk annoying
them. Everyone needs a bit of space. Let the relationship and
the communication flow naturally.
Don’t Rush Things
So you think you’re in love…Professing your love too
soon can send the object of your affection running fast and
far. Your sincerity may come into question. Either can sabo-
tage a relationship full of potential. So before you declare
your feelings, make sure you understand them, and that your
customers are ready to hear them.
Make Them a Priority
You’re busy, your customers are busy. But you need to
make time for each other, or they’ll be left wondering wheth-
er or not you really care. Set aside time in your schedule for
your customers. In whatever way is appropriate, make sure
you spend time on or with them.
Sweat the Small Stuff
It’s not just the deep, long heart-to-hearts that bond custom-
ers with your brand. Equally important are your interactions in
everyday life. Short, thoughtful conversations or interactions
that make an impact can go a long way toward building loyalty.
Your handling of everyday situations, the small ways you show
your support, and your consistent reliability help strengthen that
bond.
Find a Balance
In every relationship, there is give and take of resources. Time
and energy. Money and loyalty. Successful brands strike the right
balance with their customers. No one wants to feel like they’re
giving more than they’re getting, or wasting their resources on
something that just doesn’t give back in the same way. Pay atten-
tion to the balance, and readjust as needed to maintain it.
Keep Their Secrets
Much in a relationship is exclusive to the parties in it—and
should never leave those boundaries. It’s wrong—and danger-
ous—to divulge things a customer has told you privately. Trust is
key to any successful relationship, and if you violate it, you could
find yourself on receiving end of a breakup.
Be Realistic
A meaningful relationship doesn’t happen overnight. It takes
time, effort and ongoing commitment. A relationship is a contin-
ual journey, not a series of grand gestures. Sending flowers every
so often will not, on its own, keep a relationship intact. In the
same way, your new technology platform or loyalty program will
only be as effective as the business plan behind them. Keep your
expectations in check, remembering that you need to bake the
cake before you add the frosting.
Strive for Understanding
In any relationship, we are always learning. Each customer
is valuable in your quest to understand your market, and each is
looking to understand as much about you. In the most success-
ful relationships, both partners work toward the best possible
understanding of the other and themselves—adhering to the
aforementioned advice to help them along the way. Your CRM
initiatives should reap understanding not only of your customers,
but also of your business. Advancing both will lead to the most
productive, satisfying and enduring relationships. L
Much in a
relationship
is exclusive to
the parties in it.
Trust is key to
any successful
relationship.
Loyalty Management™ • SPRING 2010 39
 TECHNOLOGY, TRENDS & REWARDS

@SocialMedia: #Tweeting
and #Loyalty by Michelle Marquardt

T witter has become a game changer for marketers

everywhere, and the content posted on this site is 100
percent controlled by consumers themselves, not “pushers”
users are commenting, joining groups, “liking”, or inviting oth-
ers users to events in droves.
So we’re clear that the reach potential on both of these
in conference rooms. Which is why, if approached correctly, social media sites is extraordinary, but how do you get in on
businesses could be enjoying impressions and contact num- all this action the right way?
bers that they have never seen before. But if ignored, they
stand to alienate customers and losing out to others who “get First: Understand the Social Media Culture
in on the conversation”. With any marketing channel, there is always the risk of
turning people off. It’s important to understand how online
Your brand is likely being Tweeted about (some good, some
communities behave, and how to speak the language.
bad), so how do you participate, and eventually turn those
Remember that these sites reflect today’s “iChoose”
tweets to cash?
culture. Social sites reflect an increasing
If you’ve been living under a rock and still don’t Your brand is likely flexibility to “customize” many aspects of
see the importance of social media, here are a peoples’ lives, allowing them to cater any
few statistics for you to chew on: being Tweeted about media to their personal—and often fickle—
(some good, some interests. Additionally, social sites provide
•Twitter hit a major milestone this month when a platform and endless methods for sharing
the 10 billionth tweet was chirped, proving bad), so how do you those opinions.
once again, that this is no fly-by-night trend. participate, and So not only could a person be complain-
(You can watch the live Twitter counter your- ing about your brand, they could be stirring
self http://popacular.com/gigatweet/). eventually turn those up the shared opinions of others – in a very
•According to twibs.com, there are 22,167
twitter businesses on Twitter, 1,103 currently
tweets to cash? public arena.
Also, these users are extremely adept
tweeting special promotions. Surprised by how at pushing their own agendas, and that may
few of the 22K are advertising deals? Don’t be. Coupons only include lauding or booing your brand—and never underesti-
work on Twitter if they are really outstanding deals (@RSHo- mate the power of a super user or online celebrity.
tel will occasionally tweet New York City Hotel rooms for $99
Case Study: Director Kevin Smith (1,662,280 + followers)
– these get retweeted (RT) like wildfire).
gets bumped from a Southwest Airlines (1,029,440 + follow-
ers) flight, possibly because he might have been deemed a
The best use of Twitter for business isn’t to post coupons; it’s
“passenger of size” and may have required two seats. Smith
to insert your brand into the sub-conscience of the minds of
took to Twitter to launch a “Twar” with Southwest Airlines
all those tweeters (23,573,178 unique visitors a month).
and an online power struggle between the two Twitter Camps
Facebook boasts equally impressive stats, with over 400
ensued. (Read more about this story in my blog: http://
million active users (50 million users visit their account daily,
whereinthewebareyourcustomers.blogspot.com/2010/02/
with 35 million updated their status daily.) Additionally, these
southwest-vs-kevin-smith-can-southwest.html.)

40 Loyalty Management™ • LOYALTY360.ORG

The best use of Twitter for business isn’t to post coupons; it’s
to insert your brand into the sub-conscience of the minds of all
those tweeters (23,573,178 unique visitors a month).
The ending to this story provides reassurance for the over-
ly cautious marketers dragging their feet on launching social
media strategies—the million plus Southwest Airlines twitter
followers are still loyal fans, and Kevin’s fans also remained
tried and true. In the end, both brands suffered some blows,
but neither lost large numbers.
For Southwest, it was a lesson of how to tackle such a
high-profile crisis. A key to their quick recovery was address-
ing the issue head-on and then switching gears to more posi-
tive stories. Kevin Smith (the brand) also came out strong as
he stirred up important discussions about a long established
rule that may indicate unfair or cruel treatment of overweight
passengers, reaching new audiences and communities.
Second: Listen First, Tweet Second
Don’t just jump into this without listening first. Use sites
like TweetBeep (which works like Google Alerts—which you
should also be using), to monitor your Brand name on Twitter.
You have a problem if you don’t get many results, and you
obviously have a problem if those results are negative. How-
ever in the second case you are presented with an audience
(which equals opportunity.)
Third: Leverage Existing Customer Service
Protocols
To get started, you needn’t look any further than your Cus-
tomer Service manual. You empower these reps to address
customer complaints and concerns, and the same respons-
es can be re-purposed for online complaints. There is more
risk for companies that ignore online complaints than those
that allow employees to attempt to help. Ignorance is not
bliss—and many people are satisfied with just feeling heard
and addressed. Keep in mind that it’s a wonderful thing to
be proactive about issues rather than wait for the inevitable
complaint call. By then it may be too late to reverse a negative
experience. By listening online and reaching out to unsatis-
fied customers—you accomplish two things; one, you let the
complainer know you take them seriously and are offering to
help and two, you do this publically—creating accountability
for both of you. If the complaint is bogus, you are free to say
so—publically—which hurts the complainers legitimacy.
Fourth: Understand the Players and Their
“Twitterality”
Just like the “real” world, there are varying levels of influ-
ence online. Learn to distinguish the powerful from the meek.
There is a high level of discretion on the boards and tweeters
(as well as Facebookers and other online participants) can
quickly measure anyone’s authenticity.
When you see complaints pay attention to them. Also
critical to watch are the number of complaints a person posts,
what types of reactions they garner, how many followers do
they reach, and how often they are retweeted. If you’re South-
west dealing with a Kevin Smith, you need to step up your
game. If you’re a company dealing with a one off person who
is having a bad day and has 2 followers, you have a lot less to
worry about.
Finally: How to “Push” Using Social Media
It’s not impossible, but you have to be careful! Tweet-
ers and Facebookers are incredibly savvy and can sniff out
commercials, like a coupon—unless it’s an incredible deal.
Leverage social media to establish your brand as a leader in
its respective industry, and the loyalty will follow. Seek out
common concerns or questions related to your industry and
provide free, no strings attached solutions and tips. Then
wait patiently, because eventually users that are benefitting
from these messages will request product or purchasing in-
formation. It’s social, not a sales call. Remember that this is
the equivalent to a cocktail party— nobody likes getting stuck
waiting in the bar line with that sleazy sales guy—they like the
guy who is clever and tells you something you didn’t know.
Also remember that Tweets are 140 characters. It’s not the
place to tell a complicated story—it’s a place to lead people
to that story. Quick stats, breaking news and valuable infor-
mation. This increases your chances of being retweeted or
shared and thus reaching a broader audience. It also shows
that you are playing the social game, not selling anything. L
Loyalty Management™ • SPRING 2010 41
 TECHNOLOGY, TRENDS & REWARDS
So Many Shiny Things,
How Do I Choose?
by Erin Raese, Loyalty 360
W e’re back to ten years ago when
the Internet was hot. There are
so many new technologies and so much
opportunity. It will be interesting to see
which technologies break through the
clutter and succeed.”
These are the words of a wise marketer
I spoke with recently. You know, he’s right. How far (how much) do we share and
There are so many new bright, shiny things
out there for us, how do we choose?
We have been and are continuing to
embark on the next technological frontier.
Every day, new ideas and cutting-edge
technologies are being developed—from
social media sites and applications, to
technologies that track behavior through
these media, mobile marketing and loy-
alty initiatives, and point-of-sale reward
and recognition.
As marketers, we know we need to
jump in and give these a try. On one hand,
there are some short-term solutions that
seem promising. But should I invest in
these? And if so, how much do I invest
knowing I’ll need an upgrade (read: totally we often ignore this key objective in our
new solution) within two years? On the
other hand, what I really need is a long-
term solution, but how do I choose the
right one? From strategy to provider there
are so many choices.
At
L o y a l t y Technology is terrific, but the
360 we’re
for tunate most important aspect
to get a your business is the intimate
deeper
look into relationship you have with
many of your customers.
these new
te chnolo -
gies. And, we hear a lot of feedback, judg-
ments and opinions about how/when/
why they are best used to drive marketing
objectives.
Here is some of what we’re hearing:
First and foremost—Don’t forget the ba-
sics! Technology is terrific, but the most
important aspect of your business is the
intimate relationship you have with your
customers. Remember—there’s nothing
42 Loyalty Management™ • LOYALTY360.ORG
intimate about swiping a card at a register.
Sure there’s “touch” but what do you re-
ally “feel”?
Social Media
When it comes to social media, the
questions seem to be about the ‘how’.
commit? How much resources do we
commit to this initiative? How do we tie
this to CRM? For those of you looking for
answers, read Michelle Marquardt’s ar-
ticle on page 40.
Mobile
There are three hot topics when it
comes to mobile: customer engagement,
digital coupon and digital payments.
Mobile is a great way to engage spe-
cific demographics in your brand. Many
organizations are using mobile to deliver
promotional advertising. While Marketing
101 taught us that marketing and promo-
tional efforts need a strong call to action,
brand advertising. But with the advent of
mobile, there are no more excuses. (Look
at Hipcricket for example, which has been
assisting brands like Staples and Doritos’s
not only in identifying customers, but also
being able to put an ROI
analysis on specific ad-
vertising and promotion
of campaigns.)
Another force driv-
ing the usage of mobile
is that many marketers
have mandates to move
advertising from print to
digital. The reasons for
this shift span cost reduction, immediacy,
and going green. But achieving these goals
is not always a slam-dunk as many of the
digital couponing solutions available re-
quire POS integration—which means
not hitting our cost reduction goals. Still,
there are a number of options that work
within your existing POS. For instance,
Motorola has a solution that works with
their POS equipment; edo Interactive’s
solution happens near POS providing the
immediacy without POS implications.
While there are many solutions—and
many more will be coming—we’re seeing
that future applications will combine with
other POS enhancements.
In last week’s conversation, my wise
marketer referenced a quote from 2000
about how mobile payments are immi-
nent. Ha! 10 years later and still no sig-
nificant mobile payment options, let alone
usage. While there are new technologies,
like Bling Nation, the experts we’ve spo-
ken to believe this is still at least 5 years
away.
Point-of-sale Rewards and
Recognition
The overall goal with point-of-sale
R&R is to provide immediacy to rewarding
customers. We all know that rewarding
at the time of action helps build and rein-
force habits. As Pavlov showed us, when
teaching your dog a command you need
to reward positive behavior immediately.
You don’t wait two weeks to give him a
treat; he’s already forgotten what he’s
done. We as consumers are not so dif-
ferent. We’ll remember those brands that
have rewarded us, not to mention those
that have made it easy for us.
There are a number of new technolo-
gies currently available (such as Maritz
Realtime, Sparkfly and Creditz) that allow
us to do this by incorporating brand/CPG
offers (read: provide digital couponing).
Our best advice: Do your homework both
externally and internally. Understand your
customer as fully as possible. Who are
they? What do they want? How do they
want to interact with you? If your demo-
graphic is people 50+ years old, mobile
probably isn’t a core solution you should
be considering.
Internally, understand your systems
and also your culture. Know what’s pos-
sible, the realistic capacity of your system
and your team. This will help you hone in
on the technologies that make the most
sense for your business. We all like shiny
new things, but they’re not always the
most practical or the best fit. L
 TALK TO YOUR CUSTOMERS
IN THEIR LANGUAGE. MOBILE.

Integrated Mobile Marketing.

Gift and Loyalty Programs.

Pay with Your Phone.

Mocapay knows how to put your business

into consumers’ hands. Literally. Mocapay

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CONTACT MOCAPAY TODAY.

merchantservices@mocapay.com
www.mocapay.com
 TECHNOLOGY, TRENDS & REWARDS

Loyalty
Innovation
NEW PRODUCTS, ADVANCEMENTS,
& TECHNOLOGIES

Biometric Recognition
Biometric Recognition was formed to develop improvements in customer re-
lationship management in the retail point-of-sale and casino gaming operations
spaces. The goal was to apply cutting edge technology to the problem of accu-
rately capturing each customer identity when and where transactions take place.
The result has been the development of an award-winning product for the im-
provement of casino management systems. Biometric Recognition has recently
worked with Bally Technologies, one of the largest manufacturers of casino gam-
ing machines and casino management systems in the world, to implement player
tracking using biometric technology embedded into casino gaming machines.
Biometric Recognition holds seven patents issued by the U.S. Patent and
Trademark office for its inventions. These patents are currrently available for li-
censing from Biometric Recognition. Licenses are currently offered in the casino
gaming space separately from the retail point of sale space.
At the retail point-of-sale, the biometric identity of customers can be cap-
tured and compared to databases. The presence of undesirable customers may
trigger management actions. The transactions of customers may be appended
to their identity for use in the implementation of various types of marketing pro-
grams. These programs may be designed to induce customer loyalty, increase
purchasing volume, increase purchasing frequency, or alternatively, induce brand
switching or defection to competitive products. This marketing service may be
sold to product manufacturers or distributors, just like advertising, coupon place-
ment and direct mail services are sold, thus creating more revenue for the retailer.
All of this was made possible by advancements in biometric technologies, and
computer processing power, networks, data storage devices, and database man-
agement.

Want to learn more? Check out Alexandra

Bohnet’s book Using Biometrics in Customer
Relationship Management.
Increasingly, companies are turning to biometrics to help them meet the
challenge of retaining profitable, long-term customers. By using physiologi-
cal or behavioural characteristics such as face geometry, voice, fingerprints
and irises, customers can verify their identities for purposes ranging from
payments to bonus point systems. This book examines the role that bio-
metrics currently plays in Customer Relationship Management as well as
possible future uses and ramifications (for example, data privacy issues), from both the
customer’s and the company’s perspective. In addition to a review of biometric methods,
standards and tools, it includes a checklist for consumers considering enrolling their bio-
metric information in a CRM program and also recommendations for companies who may
wish to implement biometrics. Iris recognition programs at selected airport automated
border controls, a Point of Sale fingerprint payment system and a season ticket face rec-
ognition application are examined in detail.

44 Loyalty Management™ • LOYALTY360.ORG

 Prolitec
Prolitec offers brands and marketers a powerful
capability to use the scent of their product to promote
it in a multi-sensorial communications program. To-
day, many major brands use Prolitec as a cost-effec-
tive means to promote and sample products such as perfumes, detergents, shampoos, fab-
ric softeners, gourmet foods and other products where “scent appeal” is needed to win sales.
There are two main multi-sensorial formats in which Prolitec provides the scent dimension:
•Point-of-sale air treatment, in which the air in the immediate vicinity of an in-store product
display is treated with the scent of the product being displayed. The scent works to enhance
the visuals including text, graphics and the packaging of the product itself. The result is a
visual and olfactory effect—a multi-sensorial appeal.
•Billboards and advertising panels can be equipped with Prolitec systems to treat the sur-
rounding air space with the scent that is being advertised on the billboard. This is particularly
effective in high traffic areas such as malls, airports and train and subway stations. This is a
multi-sensorial approach that draws customers to the display while simultaneously enhanc-
ing the visuals and allowing the prospective customer to “sample” the scent of the product.
Retailers utilize Prolitec’s Ambient Scenting service to create the desired olfactory envi-
ronment for their customers in a manner that complements the many other ways—through
sight and sound—they offer shopping experiences. Prolitec can be used to enhance Point-
of-Sale promotion of products such as fine fragrances, detergents, foods, leather goods and
other items. In addition, Prolitec’s technology offers Odor Remediation and Restroom Hy-
giene in all public spaces that are subject to high traffic.
Prolitec’s use of Aromatherapy creates an ideal shopping environment and a more pleas-
ing consumer experience.

Infinian
Infinian has created a patent
pending, POS technology that en-
ables closure of the last mile in mo-
bile coupons, promotions, loyalty
cards, Mobile ticketing, and direct mail. The Plug and Play
software resides on the payment terminal and/or scanner,
easing the integration into your stores POS. Infinian’s pro-
gram captures consumer behavior data at point-of-sales/
services for digital coupons and tickets to provide verifiable
Redemption and measurement of ROI on Mobile Marketing
campaigns & Mobile Commerce transactions.
Infinian has married their POS software with a SaaS based
cloud service for retailer enablement. The hosted Infinian
Coupon Cloud (www.mycouponcloud.com) and Ticket Cloud
enables retailers and marketers to create, manage and dis-
tribute coupons and tickets which are then tracked in real-
time on an individual consumer level via a Unique Code when
the coupons/tickets are redeemed at Point of Sale (POS)
terminals. Their cloud-based service allows you to grow and
own your very own mobile database of customers. This da-
tabase provides detailed analytics, segmentation and con-
sumer buying behavior, ultimately providing retailers with a
one-to-one communication with their customers.
With Infinian’s Coupon Cloud and POS Software, there
is only one point of integration; one system. Infinian’s POS
Software has little baring on a retailers sales terminal. Once
in place, all other digital and mobile coupon distributers con-
nect to the retailers POS system via the Infinian Cloud. In do-
ing so, the Infinian platform ensures that each retailers digital
offer, regardless of the distributer, has the same redemption
process, unique codes per user and the redemptions are
guaranteed. Lastly, Infinian charges on a Per-Redemption ba-
sis, so pay for performance.
Maritz Real-Time Rewards
Engage customers in real-time at the Point of Sale to increase sales
and drive customer loyalty. When customers sign up for a retailer’s
rewards program through Maritz Real-Time Rewards, they merely
swipe a credit, debit or loyalty card and are instantly registered. The
program then begins tracking
purchasing behavior in order
to deliver targeted promotions.
These behaviors can include spend, number of visits, and time lapsed
since the last visit. Maritz Real-Time Rewards enables retailers to set
up promotions to drive frequency, increase average ticket, reward
best customers, cross sell, market new products or deliver targeted
messaging. In addition, retailers can drive customers towards higher
margin products and/or reward behavior with low cost items.
This targeted approach ensures the right customer
gets the right offer, receiving exactly WHAT they want,
WHEN they want it.
For example:
Chad is a truck driver who stops at “Burger Land” every week.
When he uses his registered debit card, the printed receipt offers
him a free breakfast sandwich if he comes back in within five days.
He does not need to bring the printed receipt back. He simply swipes
his card to redeem his free sandwich next time.
Liz is a frequent “Books & More” shopper and earns three points
for every dollar spent when she uses her “Bank of the Nation” credit
card. Upon checkout at “Books & More,” she will be prompted at the
POS to use her “Bank of the Nation” reward points to pay for all or
part of her purchase and reduce her out-of-pocket costs. This instant
promotion requires nothing but the card Liz already uses.
For more information visit www.maritzrtr.com. L

Loyalty Management™ • SPRING 2010 45

 BEST BUSINESS PRACTICES

The Five Things Marketers

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

W hy should the best marketing professionals and their organizations be welcoming

the “Credit Card Accountability, Responsibility and Disclosure (CARD) Act” of 2009 and the
financial reform bill with open arms and open budgets?

Because opportunity like this doesn’t happen every day.

To help, we’ve compiled the Top Five things Marketers should be doing, right now, because of the
CARD Act and the financial reform bill.
1. Intense Data Analysis
The companies with the best analytics (whether inhouse or outsourced) will be the survivors and winners in the new
consumer environment created by these laws and regulations.
If you aren’t using data and analytics to segment your customers and target your offers, you aren’t managing return
on investment of your marketing campaigns. While ROI is always relevant, the impact of the legislation will make finding
the right offer at the right price, and presenting it to the right customer, critical to profitability and legal and regulatory
compliance.
Extremely targeted (read as: has to make money) marketing initiatives, designed to attract ONLY those customers the
companies deem as “safe AND profitable” are only possible with intense data analysis.

2. Marry your Analytics to your Marketing

For those old enough to remember Watergate and the familiar line, “follow the money”…this new era of regulation has
ushered in a new line, soon to be familiar to marketers, which is—“follow the data.”
In the new world of marketing accuracy and efficiency, not following your own data is not only careless, it’s down right
dangerous. What happens if your best customers get a price increase that was intended for a different segment of your
customers?
Prior to the CARD Act, the consumer’s response might be a customer service call or complaint, but today, your cus-
tomer’s likely reaction is to post a Twitter and/or a Facebook complaint that might go viral. And, if followed by an email to
a regulator or legislator, then you are likely to experience a negative ROI on your marketing spend.
Now more than ever, let your data point the way and follow it by marrying your analytics to your marketing strategies
and tactics.

3. Learn to do More with Less

Get over it, your budget is smaller but your goals and objectives aren’t.
The good news is that the regulations and laws in this new era are forcing us be laser focused in our messages, offers
and services. As marketers, finding the right customer for the right product has never been more important. Segmentation

46 Loyalty Management™ • LOYALTY360.ORG

and targeting, support- 5. Churn, Learn
ed with quantitative and Return
data and analysis en- Churn: Churn
sures that your product through your data,
and services match your intensely, to under-
customer appropriately, stand your custom-
ensuring their satisfac- ers’ actions, behav-
tion. iors and tendencies.
So, yes, our budgets Churn through the
are smaller and yes, CARD Act and the
pressure will still be upcoming finan-
there to generate results. cial reform bill. You
But with analysis, seg- need to, more than
mentation and targeting
we will be more efficient
The winners are those ever, understand the
new rules, the new
and effective marketers,
generating more results
companies that can do’s and of course,
the new don’ts.
with less budget and a
maximized ROI.
identify their customers Learn: Learn ev-
ery day, all the time.
4. Listen to your and target marketing Learn what your
customers are say-
Customers
It’s an old adage but
strategies through the ing, what they are
writing, how your
it’s still valid, and will
be, even more so in this
use of better customer product or service
is performing, in
new era.
information, fresh their eyes. Learn the
Consumers have the CARD Act and what
capability to uncover in- customer insight and your competition is
formation and compare doing. The access
products and services at opinions and then use to information and
an ever increasing pace. data has never been
And under the new laws this information to offer easier or more ro-
and regulations they bust, learning from
will be better informed the best product for it? Now that’s what
and smarter about their separates the win-
choices than ever before. that “most specifically ners from the losers.
Return: Need to
To win in this new
era, marketers must find possible” best customer. focus…then try Re-
the products and ser- turn, Return and
vices that will empower then Return. It’s
the customer to “have it quite simply…that
their way”, to ensure their satisfaction. The only simple! Focusing on return will ensure you are seg-
way to do this is to listen, listen everywhere, all menting and targeting, providing the best product
the time…use Facebook, Twitter, blogs, your cus- or service to the right customer, in the most effi-
tomer service center, and your web site to hear cient and effective manner. The CARD Act and
what consumers are thinking and posting. And upcoming financial reform bill is and will change
don’t forget your competition—listen to their so- the customer and product landscape, but if you stay
cial network sites as well. focused on return, you will win and so will your
If you aren’t monitoring your brand, compa- customers.
ny name or product and services via social me- There you have it, the top five things you should be
dia monitoring tools, you are already behind the doing now more than ever because of the CARD
winners. Act and the pending financial reform bill. Embrace
The winners are those companies that can these five things and the hand wringing and worry
identify their customers and target marketing over the future of marketing under the CARD Act’s
strategies through the use of better customer in- regulation will subside. Embrace these five things
formation, fresh customer insight and opinions and you will ensure that you are an informed mar-
and then use this information to offer the best keter, providing valued products and services, to
product with the optimal benefits for that “most the right customers, in the most efficient and ef-
specifically possible” (highly targeted) best cus- fective manner.
tomer.
Remember, you win when your customers win. L

Loyalty Management™ • SPRING 2010 47

 BEST BUSINESS PRACTICES

What does a customer h

by Shiv Gupta, Farmers Insurance

M ost loyalty initiatives are missing a key ingredient. Like

cakes without sugar, they may look appealing; however, the
omission will only be discovered once they are consumed.
Today most innovations in customer loyalty focus on three major
areas:
1. Brand and messaging – Use emotion to reinforce purchase de-
cisions.
2. Core product or service – Provide greater value and function.
3. Ancillary service – Make the core product or service a pleasure
to use.
Companies will spend significant sums in the hopes that a break-
through project will boost customer loyalty. On occasion, the in-
vestments are so large that the old adage, “It cost much more
to acquire a customer than retain one” reverses itself. These
debacles are products of lopsided business cases that provide
reasonable cost estimates but no reasonable estimates of cus-
tomer reaction.
The missing ingredient is intrinsic customer loyalty. Loosely
defined, intrinsic loyalty is the loyalty customers exhibit without
positive or negative influence from the company. The underlying
notion is that loyalty has as much to do with the customer as with
the company. Once the drivers of inherent loyalty are understood,
many customer experience decisions become obvious.
Let’s look at three common loyalty segments that loosely re-
semble ones seen in the insurance industry.
Loyalty Segment Intrinsic Loyalty Level Characteristics
Price Seeker Low Price driven
No frills
Low utility from category
Delight Seeker Med to High Price insensitive
High innovation
Responds to surprise & delight
Comfort Seeker High Low involvement
High trust
Desires simplicity
Desires consistency
48 Loyalty Management™ • LOYALTY360.ORG
1. Price seekers: This group is seeking the least costly product or
service. This is primarily due to the low value they place on the
category. Offering frills or high touch service will only work for
them if the price is very competitive.
2. Delight seekers: This is the segment most customer engage-
ment efforts target believing that if you keep them happy, they
will stay. These customers are loyal as long as you stay aligned
with their evolving needs. They are engaged in the category and
aware of the benefits you and your competitors provide. They
also have the knowledge and inclination to measure you regularly
against the competition.
3. Comfort Seekers: This segment is very loyal but often over-
looked. Keeping them happy is relatively easy. They have low in-
volvement and high trust. They seek relationships that are simple
and consistent. They value innovation, but they don’t want too
much of it.
The segment a customer falls into is not only a matter of person-
ality but also depends on the category. The same customer may
be a delight seeker when it comes to smart phones, a comfort
seeker when it comes to dining out and a price seeker when it
comes to air travel. Nevertheless, most industries will encounter
all three types.
In order to develop an effective loyalty strategy, it is impor-
tant to understand which segment(s) you wish to promote. At-
Intrinsic loyalty is the
loyalty customers exhibit
without positive or
negative influence from
the company. Once the
drivers of inherent loyalty
are understood, many
customer experience
decisions become obvious.
have to do with loyalty?
tempting to devise one loyalty strategy that will ap-
Loyalty Segment Operating Implications Benefits
peal to all three segments is very difficult. The good
news is that there is a profitable loyalty strategy Price Seeker Cost efficiency Low CE investment
for each of the segments and it maybe possible for Basic and simple Loyal to perceived price
your company to develop multiple loyalty strategies - leader
through the use of tiered brands, for example. Delight Seeker Continual CE Innovation Greater pricing power
High touch Good customer feedback
Aligning Company Strategy Around Potential brand advocate
Inherent Loyalty Segments Comfort Seeker Moderate innovation Learn on competitor’s
Today, most loyalty ideas focus on the delight Consistent (& good) CE dime
seekers. The reason is that the delight seekers best High intrinsic value
respond to the reciprocation rule, “surprise and de-
light them and they will love you.” They are also the
first to acknowledge your efforts and willingly provide feedback. trinsic loyalty. However, trying to elicit high levels of engagement
However, most companies confuse ease of understanding loyalty from them may lead to frustration (on your end and theirs). The
drivers with ease of establishing customer loyalty. Keeping de- benefit of targeting this segment is that your customer experi-
light seekers is costly because they demand constant innovation. ence innovation can develop at a moderate pace, allowing you to
However, they are also the least price sensitive and can provide focus on improving your processes instead of creating new ones.
healthy margins to fund that innovation. They will reward good You can always adopt new innovations once your competitors
innovation by becoming strong brand advocates but also punish have tested them. For most companies, this should be the most
for poor innovation. A few companies cater to delight seekers ef- appealing segment. Some companies that do well with this seg-
fectively and win their loyalty are Apple, Bose and Ben & Jerry’s. ment are McDonalds, HP & Starbucks.
Price seekers are very loyal if you can provide a no frills but
reliable product or service at a low price. They may even forego Determining your loyalty segments
price shopping if, based on experience, they believe that no one To develop a targeted loyalty strategy for your company, you
else can match your price position. If a company that is capable should first conduct an intrinsic loyalty segmentation study. In
of squeezing every penny out of your operations and running a the next issue I will outline some basic steps towards creating
lean shop, this customer is ready to reward you. The customer is a powerful loyalty segmentation study that quantifies the dollar
not looking for a cutting edge customer experience (CE) and will value of intrinsic loyalty. Once this is completed, you may be sur-
wait for you to adopt new CE ideas once they are well established. prised how much easier it will be to design and justify your loyalty
By focusing on this segment, your company can do well. The only program. L
place where you must innovate is in cost efficiency. Examples
of companies that do well with this segmentare Wal-Mart and Come hear Shiv speak at the 2010 Loyalty
Southwest Airlines. Expo where he explores “How to tell when a
The comfort seeker segment is perhaps the most under-ap- customer is just not that into you: Developing a
preciated and in many industries, the largest segment. They have
come to expect a certain experience and consistency is what platform for optimization of your engagement
they are primarily seeking. As a result, they come with high in- strategy”

Loyalty Management™ • SPRING 2010 49

 BEST BUSINESS PRACTICES

A Time for Change

by Carlos Dunlap, Kobie Marketing

B efore they’re regulated, credit card issuers

need to also consider non-mandated, but essential
changes to the structure of their customer loyalty pro-
The value of a change like this isn’t always initially ap-
parent and may be only the beginning of a larger move-
ment. Yet, the early trends indicate that a mandated move-
grams. These changes will require a shift from the tra- ment towards consumer disclosure and protection will
ditional approach of marketing products to consumers continue for at least the next three years.
based on product characteristics and instead shift to With the above in mind, now is the time for card issu-
providing services and products that support the way in ers to shift focus towards a payment device that supports
which consumers choose to live. And that doesn’t mean how consumers want to live and interact with the world.
inundating consumers with the latest “lifestyle” credit A credit card that not only allows them to make transac-
card product that’s co-branded with a theme park, elec- tions, but that makes life easier. This life-enabling device
tronics manufacturer or music distributor. It means final- must provide consumers with the benefits and services
ly taking a customer centric view of the “on-the-go, im- that are expansive enough to cross many boundaries. It’s
mediate satisfaction, brand the dynamic functionality
promiscuous” world of today. required to make them use
The financial services What is apparent is the your product over the other
space has come under heavy environmental shift away from vague two cards in their wallets, as
scrutiny over the past 18 well as preference over the
months. New consumer fair- customer awareness layered in fine additional 4 cards in their
ness regulations have been
enacted, forcing disclosure
print to a consumer perspective that ment sock drawer and other pay-
methods.
and radical changes for fi- is more transparent. What the financial ser-
nancial services institutions. vices industry and credit
For instance, the Credit Card card issuers are facing these
Accountability Responsibility and Disclosure Act of 2009 days is hardly unique. It’s a predicament that airlines, the
introduced many consumer protection initiatives, such as: pioneers of consumer loyalty programs, found themselves
Prior notice of rate increases; Limits on fees and interest in more than 10 years ago—an extraordinarily commod-
charges; Payoff timing disclosure and many more. itized product that forced industry leaders to innovate in
The effects this new legislation will have on financial order to distinguish themselves from the competition. If
institutions’ balance sheets are up for debate. However, it was good enough for the “Godfathers” of modern day
what is apparent is the environmental shift away from loyalty marketing, then chances are it’s the right approach
vague customer awareness layered in fine print to a con- for credit card issuers today. In fact, it’s overdue.
sumer perspective that is more transparent.

50 Loyalty Management™ • LOYALTY360.ORG

 Card issuers, this is your time. And here are the four things you
must do to evolve your customer loyalty strategy to drive the most
appropriate experience for each segment and optimize profits.
Differentiate the Customer Experience
Implementing a variable program structure beyond standard,
gold, platinum and diamond will optimize the success of a loyalty
strategy. Those traditional classifications are product centric and
designed for the ease and convenience of the financial institution.
As airline frequent flyer programs increased in size and popu-
larity, they were continually enhanced to include tiers based on
customer usage and value. The first segments were gold and silver,
followed by platinum and more elevated designations. The tier-
ing strategy was just the beginning. It evolved into a more precise
delivery of the customer experience. Based on customer value, as
indicated by their tier designation, relevant soft benefits where in-
troduced, including: first-class upgrades, special 800#s, privileged
re-bookings, express security lines and priority boarding.
For issuers, a customer centric approach begins with talking to,
treating and rewarding customers based on their unique attributes.
This doesn’t mean an exhausted 1:1 approach. It requires a founda-
tional segmentation to differentiate the customer experience based
on how cardholders use the products, make their transaction deci-
sions and the value they provide to the organization. The airline in-
dustry was able to implement the tiered structure from travel pur-
chases and preferences. Card issuers have considerably more data
to access, analyze and implement to create superior data driven
strategies that are more appropriate and appealing to cardholders.
Financial institutions also have additional products and servic-
es that can provide insight into customer lifestyles, product usage,
needs and attitudes. The Relationship banking approach continues
to provide untapped opportunity for nearly all banks, investment
brokers and insurance companies. By pooling the knowledge of
customers across multiple product lines, organizations can more
effectively drive customer understanding, engagement, responsive-
ness, redemptions and of course—profitability.
RBC Bank found great success in allowing point pooling across
their products and within households. Its strategy significantly in-
creased program engagement, transaction value and redemptions—
leading to a much healthier program for its members and for the
organization.
Move the Brand Beyond Plastic
Improving the customer experi-
ence is essential because it’s difficult
to be loyal to a piece of plastic. Be-
come more than a payment vehicle
and provide greater value to custom-
ers’ lifestyles. Their loyalty will be
earned and incremental profits will
be gained by becoming more essential
to the way customers live.
Although the card may serve as
the payment device, the program
website can function as a frequent
destination spot, providing relevant
lifestyle information, as well as tradi-
tional program content. By providing
additional content, a program sponsor
can deliver more value to cardholders
while driving greater affinity towards
its brand.
The next area of expansion for
any program website is to allow non-
bank content or modules, similar to a
Google or Yahoo! home page. Allow
program members to customize their
pages or even allow the program site
to be loaded as a module in Google and
Yahoo! Meet them where they live and
become more relevant.
Branches are foundational, but not
essential to most customers and cer-
tainly not to cardholders. Therefore,
introduce events and activities that
drive engagement with your brand in
the branches and with trained per-
sonnel who are prepared and under-
stand how to deliver the appropriate
experience to each customer. Events
should include motivational speakers,
continued on next page »

It’s time for a real change. You have an

extraordinary opportunity to shift your focus
towards improving the customer experience
by creating added value for your customers,
leading to increased engagement and affinity
towards your brand.

Loyalty Management™ • SPRING 2010 51

 A Time for Change (continued)
business/individual networking events, job fairs, kids’
birthday parties and small business seminars. Further-
more, branch personnel, as well as call center reps, re-
quire both performance metrics and incentives to be fully
engaged in the customer experience strategy.
Moving to mobile payments is another strategy that’s
being tested around the world and will soon have real ap-
plication in the United States. Therefore, it’s time to take
the payment vehicle to the next level by forming alliances
with handset manufactures, wireless providers and mo-
bile processors to ensure relevancy in the new world.

Focus on Program Growth, Not Costs

Use the abundance of data to derive customer knowl-
edge that allows you to engage customers in the way they
live today. Expand beyond your brand. Many issuers to-
day may have an online mall or merchant-funded network,
geared towards increasing card transactions. Instead,
change the perspective to a customer POV and develop
alliances with many product and service providers who
can provided enhanced value for cardholders or discounts
for being a cardholder, without the need for a transaction.
For airlines, the natural alliances were hotels and car
rental companies. For financial institutions, the universe
is much broader and may include: health clubs, chambers
of commerce, non-for profits, cultural organizations, pro-
fessional/recreational networks and support groups.
By better engaging cardholders based on the value
provided and by adding convenience to their lives, issuers
will drive loyalty to the brand and not just to the loyalty
program. The incremental gain in loyalty translates into
profits for the issuer and reduces the need to continually
erode value out of the program.

Transform The Loyalty Strategy Into A Profit

Center
Move your loyalty program away from a marketing
expenditure and transform it into a profit-generating
Use the LOB. Traditionally, this is accomplished by measuring
the incremental lift in transaction revenues and profits.
abundance of data However, going forward, issuers need to focus on brand-
ing their currency and selling it to partners who enhance
to derive customer the brand—using it for external promotions and employee
incentives.
knowledge that allows For the airline industry, profitability resulted from
program expansions that included a more diverse set of
you to engage customers partners and sales of miles currency. Airlines first sold
their miles to telecomm and credit card issuers, but then
in the way they live expanded their network to include multiple industries
with a desire to purchase promotion currency. The strat-
today. Expand egy behind frequent flyer programs was forever changed
from a marketing expense into a revenue and profit gen-
beyond your erating line of business. Frequent flyer programs began to
be viewed as assets to the airlines and in many cases, held
brand. the distinction of being the most profitable line item on
the company’s balance sheet.
Issuers, it’s time for a real change. You have an ex-
traordinary opportunity to shift your focus towards im-
proving the customer experience by creating added value
for your customers, leading to increased engagement and
affinity towards your brand. All elements required are in
place: customer data, technology and opportunity. Deter-
mine your strategy and commit to your customers. L

52 Loyalty Management™ • LOYALTY360.ORG

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

The Human Connection® is about the people who affect your business success:
employees, channel partners and customers.

• Sales Incentives
• Employee Engagement
• Channel Performance
• Customer Loyalty Solving business challenges with people solutions

• Recognition MarketingInnovators.com z 800.543.7373

 BEST BUSINESS PRACTICES

Creating Loyalty Inside,

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

T he downturn economy has led many organizations

and employees to question loyalty issues in the work-
place. Perhaps the better question is, “Should there be loy-
alty?”
Change is inevitable in today’s fast moving global econ-
omy and successful leaders need to be continually seeking
improvements in processes and procedures to maximize
efficiency and effectiveness across their organization. True
leaders and managers initiate and stimulate change. Smart
executives recognize that change in fact sustains an organi-
zation helping it grow.
This is true across all industries, with particular empha-
sis on the medical, financial services and manufacturing
sectors. With the drastic changes in these sectors, loyalty
is becoming more important than ever before. Why? Em-
ployee loyalty drives creativity, innovation, and productivity
that result in improved performance, and profitability.
The foundation of loyalty is trust, and trust is the founda-
tion of all relationships. Leaders and managers can establish
trust by integrating a combination of:
•Congruency of words and deeds,
•Communications,
•Respecting people’s ideas,
•Following through on commitments,
•Recognizing both strengths of the organization and
areas for development, and
•Willingness to admit mistakes.
There are five essential strategies organizations can im-
plement to create and foster increased loyalty among em-
ployees, customers and other stakeholders.
These five essential strategies reflect a structured ap-
proach for developing individuals’ commitment to the or-
ganization’s vision and strategy. These are effective on any
scale, from developing greater loyalty between a single
manager and his/her direct reports to implementing a glob-
al change process within a major multinational corporation.
Strategy 1: Engage employees in discussion
The current corporate culture has the potential to be
overwhelmed with employee anxiety and fear. It is critical
for management to be committed to creating and sustain-
ing a meaningful open conversation with employees, via
focus groups or informal discussions. Managers at every
level, starting from the top, should actively challenge and
encourage staff to contribute thoughts, ideas and creative
solutions to improve their jobs, their departments and the
overall operation of the organization. This is especially true
during periods of restructuring and change.
Employee loyalty drives creativity,
innovation, and productivity that
results in improved performance,
and profitability.
As part of this process, organizations should ask em-
ployees about their level of pride and commitment to the
organization. Employees need to actively contribute to a
discussion that focuses on:
•Top three strengths of the organization
•Three areas in need of improvement
•How employees can contribute to the overall
growth, profitability and customer satisfaction lev-
els
As best stated by Harold McAlindon, author of the Little
Book of Big Ideas, “The quality of an organization can never
exceed the quality of minds that make it up.”
Strategy 2: Create focus and shared vision
Business leaders and managers need to to create focus

54 Loyalty Management™ • LOYALTY360.ORG

and strategy through clear, concise and
consistent shared visions, values and po-
sitioning for the organization—especially
at times of great change. Strategies must
continually be reviewed to ensure every-
one in the organization is aligned with
those strategies.
In difficult times, communications
becomes even more crucial. Team meet-
ings, emails, teleconferences, video con-
ferences, and other sources of commu-
nications are of utmost importance. It is
ing for something more basic. They want
to be told the truth, especially if the news
is bad. They also want, corny as it sounds,
to feel they make a difference and to be
given the chance to grow.”
Strategy 4: Empower individuals
to solve business issues
Individual contributors know exactly
what has to be done to improve efficien-
cy or effectiveness in an organization or
department. Leaders and managers can
ness Chronicle said it well: “When the
going gets tough, people tend to revert
to the steadfastness and predictability
of traditional values: trust, loyalty and
meaningful personal relationships.”
It is important to remember that loyalty
does exist in the workplace, provided
employees feel they are cared for and
have an opportunity to learn and grow.
Management can achieve this by listen-
ing to employee input, engaging them

Managers at every level, starting from the top,

should actively challenge and encourage staff to
contribute thoughts, ideas and creative solutions
to improve their jobs, their departments and the
overall operation of the organization.
critical to reach all employees to convey empower them to formulate the solution in solving business issues, and clearly
changes in direction or strategy. and allow them to share it with manage- and consistently communicating future
ment. strategies and major changes.
Strategy 3: Communicate, Forming employee teams to explore When employees are loyal to their
communicate, communicate and work on major business issues will company, their managers, their col-
Sharing the vision, values and posi- provide creative and innovative thinking leagues and their work, the quality of
tioning of the organization is most criti- that will surpass management’s expec- their work, the product or service they
cal when the workplace seems particu- tations. create are better and is reflected in the
larly volatile and unstable. Employees way they deal with customers. Happy
can elevate the vision and strategies set Strategy 5: Continuous evalua- employees offer better service and
forth by the management—hence it is tion and feedback products to customers which in turn
important that an in-depth understand- Sustaining market share and main- results in loyalty.
ing of company goals and standards are taining the best competitive advantage Employees and customers together
shared with employees across the orga- requires continuous improvement. Re- build a company’s brand. Employee
nization. peating these steps will create a compet- loyalty builds customer loyalty, which
As The Great Place to Work Institute itive edge and help individuals feel they builds brand loyalty. It’s as simple—and
co-founder Robert Levering suggested, are continually growing and improving. as difficult—as that. L
“Perks are nice, but employees are look- Connie Glaser of the Atlanta Busi-

Loyalty Management™ • SPRING 2010 55

 BEST BUSINESS PRACTICES

Voice of the Customer—

What Does That Mean for
Loyalty & Engagement?
by Mark Johnson, Loyalty 360

V oice of the customer…Engagement…Loyalty. What do these buzzwords mean? How do we use them to drive value?
Where are the best practices?
These often-used terms have connotative and denotative meanings that can be quite different depending on who uses
them and how they are used. Loyalty 360 - The Loyalty Marketer’s Association continues to see uncertainty about loyalty,
engagement, and voice of the customer. Questions posed by our members and partners about these buzzwords keep coming
fast and furiously.
The confusion indicates that in this challenging economic environment, the focus on loyalty and engagement is becoming
ever more important. Customers, clients, employers, brands and channel partners believe that voice of the customer, Web
3.0, the Groundswell, etc. can give them a well-needed competitive edge. Yet, they don’t know how to execute these initia-
tives effectively. They’re looking for best practice examples of groups creating engagement, excitement, and commitment to
help the answer the overriding question: HOW?

56 Loyalty Management™ • LOYALTY360.ORG

 On one hand, brands and consumer package
good companies tell us that they want to re-engage
their customers and have more direct communica-
tion with them, and that social, mobile and emerg-
ing media is helping them to do this. On the other,
they want to have better and more actionable data
results. They want to see the true 360° view of
the customer, yet realize that they are not privy to
data from other sources—such as channel partners,
merchants and distribution channels—that allow
them to complete this circle. Getting the true voice
of the customer doesn’t just mean using social,
emerging and mobile media. It also means focusing
on traditional media channels such as the call cen-
ter, direct mail response, customer loyalty program,
surveys, etc.
Merchants, banks, hotels, restaurants, travel
and entertainment companies pose to us a litany of
the same questions. These entities want to work to-
gether and collaborate in a manner we have not wit-
nessed in quite some time. Capturing a 360° view It comes down to commitment
of the customer means knowing what Jack Jones
is spending at Applebee’s, on Delta, at JC Penney, and a realization that the world
and at 5/3 Bank. They want this level of broad in-
sight because they know it will enable them to make of marketing is going to be
more effective communication decisions and tailor
the form, factor, and fashion of these timely com- more dynamic now than it has
munication in order to increase its effectiveness.
But they continue to ask: HOW? How do I get ever been. Customers, clients,
this information? How can I create loyalty? How can
I create engagement? How can I make the insight I employees, brand participants
have more actionable? How do I drive the behavior
that I need to drive? How do I change the mindset want control. Yet control means
within my organization to be more accommodating
and amenable to this new transition? engaging in an interactive
The answer is two-fold:
1. Listen. Listen, not in a lip service fashion, but lis-
dialogue with the brand and
ten with the belief that there is wisdom in crowds.
Listen with the purpose that small is the new big.
brand participants.
One blogger, one online community not addressed
can have serious impacts on a brand. Being truly swung from the brand to the client. For every success story that
committed to listening to and engaging customers becomes lore within this new “social community” and “engage-
requires a corporate mandate guided by a visionary ment marketing” space, we hear five where the “visionary” that
leader who compels the organization to look at their sold them on the new technology that would revolutionize their
actions and address these questions honestly: brand, their company, their product, their offering has failed.
•When companies say they are committed to That’s because it comes down to commitment and a realization
voice of the customer, yet they are only focused that the world of marketing is going to be more dynamic now than
on call center responses, is that a true voice of it has ever been. Customers, clients, employees, brand partici-
the customer? pants want control. Yet control means engaging in an interactive
•Or when companies say they are committed to dialogue with the brand and brand participants. It means making
voice of the customer, yet they are only focused the input for the various channels concise, relevant, interest and
on social, mobile and emerging media respons- actionable.
es, is that a true voice of the customer? I was recently at a loyalty conference where one of the speak-
•Or when companies say they are committed ers purported that we should treat our “best customer” with the
to voice of the customer, yet they only use third best rewards and engagement. I thought to myself, what is your
party opt-in data, is that a true voice of the cus- best customer? How do you define that customer and what are
tomer? the best rewards and engagement for them? There’s no place for
2. React. Once you listen you need to react with the this type of old school thinking in this new media market of en-
purpose to engage and empower the dialogue with gagement, loyalty and voice of the customer. I challenge you to
your audience. There’s no doubt the pendulum has listen—to truly listen—to react, and to engage. L

Loyalty Management™ • SPRING 2010 57

 BEST BUSINESS PRACTICES
ULTA Beauty
loyalty program profile
Enrollment Experience
ULTA offers two rewards programs online—ULTAmate Rewards
and The Club at ULTA—enter your ZIP Code and the program di-
rects you to a program available in your area and both are free. In
many ZIP Code, both choices may be available since several stores
can be in an area. Registration is easy and quick—since I had an
ULTA loyalty card already, a pop-up offered to print my new ULTA-
mate Rewards card with my existing account number. A seamless
experience: adding email addresses and confirming street address-
es allows for reward continuity benefits.
Register for email alerts to receive an extra special welcome!
The Retail Experience
ULTA stores are spacious and engaging and their
sales associates are friendly, helpful and inquire about
a purchaser’s Club and/or membership status with
every purchase. The merchandise array is extensive,
with national brands and private label, particularly in
body lotions, washes and bath products. Frangrance
selections include popular brands such as Ralph Lau-
ren, Juicy Couture, Philosophy and classics such as
Chanel and Estee Lauder. Men’s fragrances are just
as extensive with brands such as Tommy Hilfiger,
Dolce & Gabbana and Giorgio Armani.
Professional Styling products feature more than
35 brands along with Hot Tools styling products and
curling irons complement ULTA’s salon services.
Gift card purchases count towards ULTAmate
Rewards and with upcoming Mothers’ Day, Fathers’
Day and a raft of Graduation events, reward levels
can rack up…
THE VERDICT
Two Thumbs Up!
With great merchandise, friendly associates and gift cards, it’s easy and rewarding to get to the next reward level. ULTA places
$5 off a $10 purchase through bind-in coupons in specially targeted magazines—and as a subscriber, it’s a reminder for me to
get out and do some shopping! After all, I can always use another scented candle and who doesn’t like getting favorite mer-
chandise as a reward? Give it a try…I’m a fan!! L
58 Loyalty Management™ • LOYALTY360.ORG
Program Basics
ULTAmate Rewards
Membership is free and with orders of $50, shipping is
free. Three free samples are included in all online orders.
Earn 3 points per $1 spent in-store or online. Reward certif-
icates can be used in-store merchandise or online. Earn points
faster with special offers for ULTAmate Rewards members.
In addition, Members can go platinum & receive exclusive
platinum member rewards.
Spend $300 or more annually? MORE BONUS POINTS
EVENTS—DOUBLE, TRIPLE, 5X THE POINTS! Receive invita-
tions to special events and special salon offers.
The Club at ULTA
Membership is free and you can earn Reward Certificates
four times per year based on specified period spending. Re-
ward Certificates are good for FREE beauty products or salon
services which are redeemed in store.
You’ll also receive valuable coupons through the year and
special Club member benefits.
Reward Certificates start with a spending level of $50,
$100, $150, $200, $250 and $300…Each spending level’s re-
ward offers a variety of beauty products such as nail lacquer
or 10 oz. ULTA shampoo or conditioner at the $50 level.
The selections increase in retail value as the reward levels
increase, with an assumption of $5.00 retail value for a $50
reward level. Each award level offers a selection of brand
name and ULTA private label merchandise. A Salon service is
offered at the $250 and $300 level. Top level reward assumes
a retail value of $45 for any fragrance selection.
2010 EXPO
PREVIEW
high-touch, high-tech, high-impact: building holistic relationships
that engender customer & employee loyalty

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

 loyalty expo 2010 preview

HIGH-TOUCH, HIGH-TECH, HIGH-IMPACT:

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

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

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

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

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

Interested in our
Speakers & Sponsors?
Read biographies, explore session and workshop topics, and
register—all at loyaltyexpo.com!

60 Loyalty Management™ • LOYALTY360.ORG

 loyalty expo 2010 preview

2010 LOYALTY EXPO KEYNOTE SESSION

The Five Decisions of Beloved

& Prosperous Companies
How to become a company customers love and can’t live without
Hundreds of companies have customers who admire them, but only an elite
few have true advocates—passionate, vocal, loyal fans—who tell the stories of
their experiences and about how much they “love” them.

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

Beyond learning about what others do, this session will provide you a
process for evaluating how you make decisions—a mirror to hold up to your
Jeanne Bliss
own personal decisions and to the decisions of your operation. As a result, Managing Partner,
you will see how far or close you are to making decisions like the beloved and Customer Bliss
prosperous companies.
Jeanne Bliss is not an
evangelist or observer of
companies. She’s been inside
Discover the following to sustain growth and profit through customer devotion:
them for twenty-five years,
•Do your decisions today earn your company beloved status? If so, how can arm wrestling them on behalf
you sustain it? If not, what changes do you need to make? of their customer!

•Do you have a reciprocal relationship of trust with your customers? With As “Chief Customer Zealot” for
your employees? five large U.S. market leaders,
Jeanne’s fought valiantly
•What does it take to provide clarity of purpose for those who serve to get the customer on the
customers? strategic agenda, redirecting
•How do customers and employees describe your “company personality?” priorities and creating
transformational changes
•How do you let customers’ lives inform the actions and behaviors of your
to the brands’ customer
operation?
experience. She has driven
•When mistakes happen, how can you apologize swiftly and with humility? achievement of 95 percent
loyalty rates, changing
customer experiences across
Filled with as many suggested actions as anecdotes, this session demystifies 50,000-person organizations…
and creates clarity on the road less traveled by beloved companies. It gives and convincing even the
you a path to follow in their footsteps—a path that is right for you, for your staunchest curmudgeons to
company, and for your people. help push the customer rock
up the hill.

Loyalty Management™ • SPRING 2010 61

 loyalty expo 2010 preview

Contemporary Engagement Measurement: Using

Engagement to Measure Cross-Media Marketing
Consumer engagement with new and old media is evolving
rapidly. “New” media technologies are becoming more
regarded and relied upon as media platforms-by marketers
AND consumers. Measures currently used to evaluate media
touch points are not considering variables relevant to today’s
consumer, and therefore are not an accurate predictor
of in-market behavior. Properly configured, consumer
engagement is a metric that has been proven to be the most
reliable and correlated to sales. While the value of media
entities (and combinations thereof) can always be defined by
their size of the audience or their demographics, they cannot
be uniquely differentiated unless we examine the levels of
engagement they engender.
Jim Harris Robert Passikoff
Brand Keys will present Loyalty Expo attendees with a real
consumer-centric, engagement-based holistic measure for CEO, Founder & President,
cross media planning. Wall Street Journal Brand Keys
Office Network

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

The Best of the Best! Best Customer

Experience, Best Examples in the
Marketplace
Without a framework to create, innovate, and ensure a unified customer experience,
your company’s best intentions in marketing, loyalty programs, employee
involvement and customer service collapse. Poor customer experiences undermine
those investments, and cost companies almost $100 billion dollars annually in
lost purchases and defections to the competition. Who’s the champion of the
Customer in your organization, and how does your work influence the Experience? Michael Hemsey
Join Michael Hemsey, President of Kobie Marketing, to understand how brand President,
leaders in a variety of industries holistically view and manage the customer Kobie Marketing
experience—and understand, design, and continuously invest in positive
experiences to drive sales, loyalty, and market growth.

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

62 Loyalty Management™ • LOYALTY360.ORG

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

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

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

learn about
yalty our lo ar
marketing services and how we can help create loyalty between you and your customers.
 loyalty expo 2010 preview

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

Powerful market dynamics are bringing us to an inflection point in customer engagement and loyalty
marketing:
•Traditional rewards programs are becoming commoditized
•Customers have more choices than ever
•Retailers are more sensitive than ever about costs of payment acceptance
•Technology capabilities surrounding the point of purchase have rapidly grown
The market is ripe for extending loyalty to the point of sale—the “last mile” in customer engagement,
and a powerful opportunity to create lasting value where there was once only cost. Point-of-sale loyalty
programs create a direct point of engagement to customers creating real value for Card Issuers/
Processors, Retailers and Customers:
Card Issuers Want:
•Increase customer spend/transaction volume
•Differentiate offering/product from competitive programs
•Enhance value proposition for interchange/merchant service fees
Customers Want:
•Relevant and meaningful interactions and promotional offers
•Ease of use and participation
•On-Demand reward and recognition
Retailers Want:
•Greater insights on customer buying behaviors and preferences
•Tangible results from programs
•Lower costs and more value for their customers
•Uninterrupted service performance

Jake Sterling Philippe Bontemps Jonathan Silver Sandra Gudat Martha Kanner
Division Vice Vice President President and CEO, President and CEO, Point of Sale Loyalty
President Payment Business Affinity Solutions Customer Product Manager,
Technology, Development, Communications Alpha Bank Greece
Maritz Real-Time Welcome Real-Time Group
Rewards

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

64 Loyalty Management™ • LOYALTY360.ORG

 loyalty expo 2010 preview

Doing Well The Ultimate

By Doing Integrated Marketing:
Good Bridging the Gap
The loyalty space is
becoming increasingly
between Brand, Digital
crowded, but finding
a way to cut through
and In-Store
that clutter with a
Morely Ivers program that partners The Pampers Gifts to Grow program has
with cause-driven successfully developed a consumer data base
Chief Rewards Officer,
brands, rewards people of over 6MM customers. Furthermore this
RecycleBank
for doing good and program has been able to generate a positive
provides economic stimulus for all involved will ROI based on fully loaded costs. It has allowed
help grow and retain membership, attract partners the Pampers brand to drive BOTH sales and
with common goals and ultimately shift consumer the bottom line without resorting to coupon
behavior. wars with their competitors. The Gifts to Grow
program is allowing Pampers to have an informed
RecycleBank has taken fundamental loyalty and reward and meaningful, one-to-one dialogue with their
strategies to a new level by changing consumer behavior, customers and the results are improved customer
socially, towards environmentally preferred actions. retention and incremental sales.
Loyalty Expo is the ideal venue for RecycleBank to share
What the audience will learn:
this new loyalty industry paradigm it has created with
other thought leaders and potential program partners—a •What kinds of brands and scale are necessary to
model where over 2000 RecycleBank Reward Partners make an initiative like this work for them
are actively benefiting from the increased brand value •How to build the value proposition and still remain
and revenue driven through their association with The profitable
RecycleBank Rewards Program.
•How to drive for results (retention and increase
customer purchases)
•The RecycleBank Story
•Pitfalls to avoid
•Loyalty Program with Purpose Brands Enjoy
Significant Public Relations
•Loyalty Industry: Do Our Norms from the Past
Present the Best Playbook for the Future?
•Major decisions driven primarily by contingent
liability management limit program’s potential
•Number partners; value derived; engagement;
and growth rates are restricted
•Loyalty’s New Paradigm: Changing consumer
behavior to benefit the Loyalty Program Operator,
Key Partners, and a Purpose at the same time may
unlock new potential
•Results from the New Paradigm: Unparalleled Suzy Cox Abby Dryden
program growth, unprecedented consumer
engagement, economic stimulus for all VP Group Account Assistant Brand
stakeholders and a better world to live in Director, Carlson Manager for Baby
Marketing Care, Procter &
•Case Study: Partnering for a Cause Worldwide Gamble

Loyalty Management™ • SPRING 2010 65

loyalty expo 2010 preview

Brand-Driven Engagement: Strategies,

Real World Examples & Measures via
Loyalty Marketing & Beyond
While everyone is looking for the latest and greatest silver bullet to drive customer
engagement and loyalty, the ones that are truly lasting and most impactful are those
that are brand-driven, customer-relevant and distinctive. This session will take a
look at best practices of how brands connect with customers to drive engagement
across channels and how that pays off in terms of results. Real world examples will
Phil Rubin include a variety of industries including travel and hospitality, retail, restaurants and
CEO, rDialogue; telecommunications. The session will feature engagement strategies and tactics
across channels, both within and outside of loyalty programs and also include how
Featuring
leading brands are using social media to engage customers.
Natalie White,
VP Customer
Marketing and We will explore engagement initiatives in areas such as:
Relationships, •Customer experience
Kimpton Hotels •Loyalty program enrollment, communications, rewards and elite tiers
and Restaurants •Research and data collection
•Integrated campaigns

2010 LOYALTY EXPO WORKSHOP

Irrationally Loyal: The

Neuroscience of Engagement
Marketing professionals need a new approach to loyalty—one that
focuses on generating lasting customer attitudes and behaviors toward
their brand and its products and services. But old thinking and rational,
transactional-based programs alone won’t get that kind of loyalty.
Through a deep understanding of people, marketers can tap into the way
our minds and emotions work, and create programs based on mutual gain Barry Kirk
and true engagement. During this energetic and interactive workshop, Director of Loyalty Strategy,
you’ll learn about:
Maritz
•The progression from transactional and rational relationships with your
As a loyalty marketing expert,
customers to ones based on “irrational loyalty”
Barry’s focus is in the area of
•Key principles of human behavior like attention, memory, fairness, fun integrated communications
and goal-pursuit and how understanding these principles enables you strategies that drive both
to engage more thoroughly and personally with your customers brand engagement and
•Real world examples of how companies create irrationally loyal increased customer lifetime
relationships value.

•Ways you can adapt your own program to utilize some of these
principles through interactive discussions
Build true loyalty
by building
better relationships.

A more strategic, data driven approach can help

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

Bring this approach to life with comprehensive

services from Maritz. It's our business to understand
what matters most to people. Enable them with
knowledge and tools. And motivate them to
change behaviors.

To start working on your relationships, stop by

booth #100 at the Loyalty Expo.

Ready to learn more now? Visit maritz.com or

call (877) 4 MARITZ.
 PRSRT STD
U.S. POSTAGE
PAID
4120 Dumont St CAROL STREAM, IL
Cincinnati, OH 45226
PERMIT No. 475

Time and space are running out!

Register now for the 2010

june 6 - 8, 2010
OMNI CHAMPIONS GATE
ORLANDO, FLORIDA
www.loyaltyexpo.com

THE CONFERENCE BRINGING PEOPLE TOGETHER TO

focus on maximizing customer, employee,

& CLIENT RELATIONSHIPS

register now at
www.loyaltyexpo.com