Volume 2 Number 4

November 2010
powered by Loyalty 360

YOU
& What Army? Communicate
In-the-Moment
Your Branding
Moment of Truth
Measure your
Customer
Centricity
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Loyalty Management™ • LOYALTY360.ORG
 This Month in
NOVEMBER 2010 VOLUME 2 NUMBER 3 WWW.LOYALTY360.ORG

An Interview with
DEPARTMENTS
Wyndham’s Robin Korman
6 What’s on Loyalty360.org
Behind the Brand/People

14
8 Letter from the Editor
pg
10 Contributors

LOYALTY FORUM FEATURES

12 Loyalty Forum: Your Voice
14 Behind the Brand/People
Robin Korman, SVP of Loyalty
and Strategic Partnerships,
Wyndham Hotel Group
16 Q & A: Ask the Experts
Couponing, A Strategy to Build
Customer Loyalty?
18 Books
Loyalty Reads
20 Keep Them Guessing: Why Loyalty
Programs Need Randomness
Barry Kirk, Maritz Loyalty
24 The Care and Feeding of a Customer
Robert A. Kobek, Mobius Vendor
Partners
28 The Customer Contact Center: Your
Branding Moment of Truth
Mary Naylor, VIPdesk
30 Dead-On: Grateful Dead
Has Taught Us So Much
About Loyalty
Erin Raese, Loyalty 360
32 In-the-Moment
Communications: Loyalty
Programs & Today’s Mobile
Program
Bob Gold, Gold Mobile

Add a little bit

of chance to
your loyalty
program

pg 20
Loyalty Management™ •NOVEMBER 2010 3
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Loyalty Management™ • LOYALTY360.ORG
 This Month in
NOVEMBER 2010 VOLUME 2 NUMBER 3 WWW.LOYALTY360.ORG

TECHNOLOGY,
TRENDS & REWARDS
34 Mobile Marketing: Top 10 Technology Strategies All
Marketers Must Know
How do you create Robert Carroll, SDL

loyalty in the age of 36 Loyalty in a Fickle Age

Render Dahiya, Arroweye Solutions
choice?
pg 36 38 Loyalty Innovation

Loyalty Management
You and
Editorial & Production Team
Erin Raese - Editor in Chief
What
Mark Johnson - Contributing Editor
Kathleen Ostoich - Graphic Designer
Army?
Crescent Printing Company - Print Production Marshaling the Troops
Loyalty 360 Team
toward Merchant
Mark Johnson - President & CEO Adoption of POS
Erin Raese - COO Mobile Commerce

48
Amanda Chasteen - Manager, Marketing Operations
Kathleen Ostoich - Marketing Manager
Annie Lerner - Marketing Coordinator

Contacts
pg
Article Submissions & Advertising: Erin Raese
erinraese@loyalty360.org or 513.360.8680, ext. 210

To subscribe to Loyalty Management, visit loyalty360.org. BEST BUSINESS PRACTICES

40 Implementing and Measuring a Customer Centricity
Framework
If you would like to contribute to a future issue of Loyalty Carlos Dunlap, Kobie Marketing
Management, please contact Erin Raese at 513.360.8680,
ext. 210 or erinraese@loyalty360.org. 44 Customer Data: The Essential Element of Your
Enterprise Voice of the Customer Program
We Want Your Feedback Annette Glenneicki, Allegiance

As a “voice of the customer” focused publication we 46 Closing the 21st Century Service Capability Gap
want to hear from you–our customers. What would Christoph Goldenstern, Kepner-Tregoe
you like to see included in these pages? Share your 48 You and What Army?
thoughts on articles and ideas for content.
Kelly Passey, Access Development
This is your platform. We would like to hear from you.
50 Loyal Insurance Customers: An Untapped Market
Write us at: mailbag@loyaltymangement.com Sandra Zoratti & Lee Gallagher, InfoPrint Solutions
© 2010 Loyalty 360, Inc. and/or its Affiliates. All Rights Reserved. 52 What We’re Hearing
Reproduction and distribution of this publication in any form without prior written permission is
forbidden. The information contained herein has been obtained from sources believed to be reli- Mark Johnson, Loyalty 360
able. Loyalty 360 disclaims all warranties as to the accuracy, completeness or adequacy of such
information. The opinions shared are those of the contributing uthors and not necessarily reflec-
tive of Loyalty 360 and/or its affiliates. Loyalty 360 shall have no liability for errors, omissions 54 Loyalty Program Profile
or inadequacies in the information contained herein or for interpretations thereof. The opinions
expressed herein are subject to change without notice. Best Buy’s Reward Zone
Loyalty Management™ •NOVEMBER 2010 5
 LOYALTY 360 ON THE WEB

what’s on loyalty360.org

Does your company

have a CSR (corporate Which social
LOYALTY 360 ASKED ITS MEMBERS:
social responsibility) media tool is the most important initiative
strategy? in your marketing strategies?
50% of you do!
Of the 50% who do 40% say facebook
LOYALTY 360 PULSE

not, only 14% plan to WHAT ABOUT THE OTHERS?

implement one within LinkedIn: 31%
Twitter: 26%
the next 12 months. Foursquare: 3%

Loyalty 360 is happy to announce the upcoming launch of

customizable member pages on loyalty360.org.
In addition to basic company information, we provide
members with an area to:
•Interact and connect with other Loyalty 360 members
•Communicate their company’s capabilities and
industries served for each, along with an area to add
relevant information
•Highlight recent press, articles, research, white papers,
case studies, and job openings posted on our site
•Communicate relevant sales information & documents
•Connect visitors and members directly to social
networks such as Facebook, Twitter, LinkedIn, and others
•Directly connect to potential sales leads via a built in
and unique contact information form, available for visitors
and members of loyalty360.org
•Read any and all content members have submitted to
Loyalty 360, such as press releases, articles, whitepapers,
and case studies.

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
Loyalty Management™ •NOVEMBER 2010
 FROM THE EDITOR

Reports seem to be mixed about the state of the

economy but as we talk to you, there appears to be a
wealth of success, opportunity, growth and desire for
more. The need for more knowledge and support is
evident.
Between this issue, our newly launched website—now complete with
extensive member pages—and the upcoming 2011 Loyalty Expo, Loyalty 360
will be there, providing you information, insights on trends, best practices and
forums for you to learn and share ideas with your peers.
We’re seeing a variety of trends,but those that appear to be the most
significant: consumer behavior, being more customer-focused/centric and
mobile as a technology for the future.
Consumer behavior—guess what? Consumers don’t do what they say they’ll
do (not necessarily a revelation but….). The good news is while this behavior
appears irrational, it is predictable. Loyalty Reads on pg 18 highlights a must
read: Predictably Irrational and on pg 20, Barry Kirk shares his views on how
to keep loyalty programs fresh by playing to this type of consumer behavior.
It’s time to focus on customer centricity. We’ve talked about it, but how do
your efforts stack up? Take Kobie Marketings’ Benchmark Assessment on
Welcome new Loyalty page 41 to find out.
360 Members: Mobile. Mobile is the communication vehicle of the future. We’ve spent a lot
of time thinking about mobile as a way to send coupons. But we haven’t even
SAP begun to tap this medium for what it really can be: a real “in-the-moment”
RewardsNow communication platform; across all industries and all marketing efforts.
BarclayCard UK Bob Gold shares his thoughts on pg 32; for ten best practices when choosing
Wyndham mobile technology, visit page 34.

Medallia As always, we want to hear from you. Please continue to share your insights,
PaP Solutions topics you’d like to learn more about and your stories (your peers want to hear
from you!).
RiteAid
Sincerely,
Mobius
CIS Solutions
Georgia Pacific

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

P.S. Be sure to register for the 2011 Loyalty Expo—this year March 20 – 22 at
the Hyatt Grand Cypress in Orlando, FL—Early-bird registration ends at the
end of the year. Looking forward to seeing you there!

8 Loyalty Management™ • LOYALTY360.ORG

Loyalty Management™ •NOVEMBER 2010
 CONTRIBUTORS
Bob Gold
Bob has over 15 years of research and exper-
tise in “digital-to-human persuasion and inti-
macy” that has resulted in changing behav-
iors. He is currently CEO of Gold Mobile, and
has used his behavioral knowledge to create
a robust mobile CRM platform and behavioral
Bob Gold methodologies that drive consumer engage-
ment and loyalty.
Robert Carroll
Robert Carroll is CMO of SDL’s Web Content
Management Solutions in North America.
SDL accelerates delivery of high-quality mul-
tilingual content to global markets.
Robert Carroll
Render Dahiya
Render Dahiya has served as Arroweye’s CEO
since 2007. He previously spent nearly 20
years at FedEx Kinko’s as a founding member,
helping to build it into a nationally recognized
brand.
Render Dahiya
Loyalty Management™ • LOYALTY360.ORG
Carlos Dunlap
Carlos is the Practice Director of Loyalty Con-
sulting at Kobie Marketing. He has spent the
past 16 years cultivating a rich background
in customer engagement strategies, direct
marketing, business development, customer
acquisition, customer loyalty and strategic
Carlso Dunlap marketing through several key posts.
Lee Gallagher
Lee Gallagher, Director of Precision Market-
ing Solutions, InfoPrint Solutions, has exten-
sive experience in teaching marketers on how
to deliver relevant and meaningful communi-
cations at each customer touchpoint.
Lee Gallagher
Annette Gleneicki
Annette Gleneicki is Senior Director of Cus-
tomer Success at Allegiance, Inc. She has
almost 20 years of experience in designing
large global VOC and EFM initiatives for For-
tune 1000 companies.
Annette Gleneicki

Christoph Goldenstern
Christoph is the Global Vice President of Ser-
vice Excellence at Kepner-Tregoe. He leads a
global team of consultants who serve clients
in a range of high tech industries. Prior to
joining KT, Christoph provided business and
marketing strategy to a host of business-to-
Christoph Goldenstern
business clients.
Robert A. Kobek
Robert is the President of Mobius Vendor
Partners. Prior to forming Mobius, Robert
spent more than 20 years in the direct mar-
keting industry and government. He success-
fully launched two companies with core com-
petencies in the teleservices industry.
Robert Kobek
Barry Kirk
Barry Kirk is Maritz’s chief provocateur in the
Consumer Loyalty space, always looking to
challenge where we are and helping to poke,
prod and cajole loyalty marketing to its next
iteration, including leading consultative en-
gagements on customer loyalty and applying
Barry Kirk the latest thinking in the design of new pro-
gram strategies.
CONTRIBUTORS
Mary A. Naylor
Mary is a 20-year veteran of the concierge
services industry, is founder and CEO of VIP-
desk. Global industry leaders trust VIPdesk to
enhance their brands through our customer
care and loyalty programs.
Mary Naylor
Kelly Passey
Kelly, Executive Vice President of Incentive &
Loyalty Services at Access Development, has
over fifteen years of experience in the finan-
cial bank card sector with specific focus on in-
centive and loyalty solutions, including seven
years at VISA managing Incentive Marketing
Kelly Passey Services.
Sandra Zoratti
Sandra Zoratti, Vice President, Global Mar-
keting Solutions at InfoPrint Solutions, is re-
sponsible for transforming the company from
a pure hardware centric organization into a
communications-based solutions business.
Sandra Zoratti
Loyalty Management™ •NOVEMBER 2010
 LOYALTY FORUM: YOUR VOICE

What makes you loyal to your

favorite brand?
T here are many staple items I buy, and for the most part
I am loyal to those products. I have always choose products
I am loyal to those companies and or products that appreciate,
recognize and value my relationship with them. I feel like I bring
that provide a good “value”, but recently have been something to the relationship with patronage and referral and I appreciate
impacted by recommendations from co-workers, friends, being recognized and offered preferred privileges, added value or special
etc. pricings as my reward.
If the item is more of a commodity, I will probably focus I am loyal to those who differentiate themselves by doing the right
more on price, but I am willing to pay more if I am getting a thing at the right time. Empowered to make good calls in troubled
good deal. If I can get an additional coupon/savings beyond situations.
the price, I will use it. Simply having the best product and or best technology is meaningless
The most recent Brand change I made is yogurt. I was a long-term. Without a relationship, you’re only as good as yesterday.
loyal name-brand purchaser (once in a while purchasing our
Roger Blier Passport Unlimited
own brand—the Giant Brand). Recently, after hearing some
buzz (from fellow co-workers) about a new Greek yogurt, I
decided to give it a try, and I love it! It is more expensive, but
I think the value I get (because it is better tasting than the
national brand), is worth the additional price.
I am loyal to those who
Jerry Griffin Giant Eagle differentiate themselves by doing
the right thing at the right time.
T he brands I remain loyal to are those that bring me
consistent product quality and value at a reasonable price.
—Roger Blier

C
They include food products like Quaker oatmeal, Old Spice,
Subaru, HP, Sony and others. I pick up on new brands like onsistently great quality at a reasonable price. 

Visio and Kindle if they bring something special. I tend
to stick with Blackberry even though the technology is Joni Newkirk
inferior to iPhone because of embedded information and
knowledge of the device. I believe MAC is free from viruses
and hackers but will not use it because I do not see it as I am loyal to a brand when quality is consistent. Over the years I have
tried to switch some of my favorite brands to try something new, because
user friendly compared to PC. In summary I choose brands
they had more variety, lower price, etc...But I usually come back to the
and stay loyal because they fit my lifestyle and therefore
tried and true favorites, because of the quality and I know they will work
make my experience as a consumer easier.
for me. The funny thing is there are some items I am fanatic on staying
Les Deck loyal, there are others I skip around pretty easily.
Lissa Daniels

12 Loyalty Management™ • LOYALTY360.ORG

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 LOYALTY FORUM: BEHIND THE BRAND/PEOPLE

Robin Korman
Senior Vice President of Loyalty and Strategic Partnerships ,
Wyndham Hotel Group

Robin joined Wyndham Hotel Group as Senior Vice President of Loyalty and
Strategic Partnerships one year ago. She has extensive loyalty experience
in financial services and hospitality and is currently changing the face of
Wyndham Rewards, the world’s largest hotel loyalty program with 11 brands
and more than 6,500 participating hotels.
Previously, Robin was Vice President of Global Loyalty for Starwood
Hotels & Resorts, where she transformed the Starwood Preferred Guest program
from a “one-size-fits-all” point-accrual program to a customer-centric rewards and recognition program.
She has also held senior marketing roles at JPMorgan Chase and Citibank building loyalty among credit card
customers. Loyalty Management takes a closer look at the woman changing this brand—Robin Korman, SVP,
Loyalty Marketing and Strategic Partnerships.

Wyndham has over 6,500 locations under its
umbrella and its loyalty program, Wyndham
Rewards, is only 6 years old. This must mean
a variety of new initiatives and opportunity.
We are a relatively new player in the hotel loyalty
space and we have been growing aggressively. We have
8 million active members who can rack up points quickly
as we have the most brands (11) and
the greatest number of hotels to
earn and redeem points.
Research showed us that loyalty
Always treat the
program members are skeptical that
they can get to reward levels quickly.
customer better
We are capitalizing on our competi-
tive advantage—the most hotels to
than they expect
earn and redeem—by relaunching
Wyndham Rewards with new posi-
and, when you don’t,
tioning based on reward attainabil-
ity and with a new tagline, Rewards
make it right. People
Right Around the Corner. We also appreciate being
have a new GPS-inspired creative
look which showcases our hotel heard.
brands and shows travelers who
easy it is to attain rewards because
of our ubiquity.
rich acquisitions bonuses of up to three free nights and an
extra point/$1 when used at Wyndham hotels.
Wyndham ran a summer promotion via
mobile. Have you found your customer base
responsive to mobile promotions?
We are just getting into mobile. For travel, it is the
wave of the future since most frequent travelers are not
sitting in front of computers all day.
Like many loyalty marketers, we are
trying different things, but the pen-
etration of smart phones is in its in-
fancy in the US (only about 20%) so
it limits the ability to fully penetrate
your customer base.
We have done more with mobile
in China as that market is ahead of
the US in adoption. We push pro-
motions out through our members’
mobile phones and they can regis-
ter right from their devices. We also
send reminders texts to book and
stay during the promotional period,
tailoring the messages depending
on whether they have made a booking.

Congratulations on the co-brand card launch. What’s your loyalty philosophy?

How has this been received?
Our new Wyndham Rewards Visa card with Barclays
launched in July and has already exceeded our expecta-
tions. We offer a card with no-fee and one with a $39 fee,
Always treat the customer better than they expect
and, when you don’t, make it right. People appreciate be-
ing heard. Loyalty is something you have to keep earning.
Consumers are fickle and one bad experience with no
resolution can change their allegiance.

14 Loyalty Management™ • LOYALTY360.ORG

Share with us your last “ah-ha” experience as
a customer.
My last “ah-ha” was realizing how much better cus-
tomer service has become. Many companies are truly
empowering their agents to solve (not just listen to) is-
sues by immediately offering replacements or small
goodwill gestures. Most customers just want to be heard
and treated as if their issues matter.
One example of a company standing by their custom-
er promise is 1-800-Contacts who offers a refund for un-
opened contact lenses. I recently called about old lenses
I found in a drawer. The agent informed me they were 8
years old, laughed, and then gave me a full refund—and
even credited me for the return shipping!
What one experience has had the most affect
on your life / most shaped your life?
Coming out of college with a psychology degree does
not qualify you for too many things so I took a job work-
ing in Japan teaching culture and language for 18 months.
I was fascinated with the cultural differences and the
wacky advertising which led to my decision to get an MBA
in international management, and then to start working in
advertising agencies. Unfortunately, I started after the era
of the three martini lunch.
If you could have dinner with anyone (past or
present) who would it be?
Jerry Seinfeld. I love the way he shows the insanity of
customer service situations such as the car rental compa-
ny that knows how to take—but not hold—the reservation,
the horror of air travel and the frustration of waiting for a
table at a restaurant, or buying soup from a surly deli guy.
His show should be the “what not to do” for any customer-
focused organization and a whole night of these insights
would keep me laughing forever! (and give me material for
future articles!)
If you weren’t working for Wyndham, how
would you be spending your time?
Traveling to exotic places using my points and miles.
What can we expect from Wyndham in 2011?
We just redesigned our logo and creative look which
we think will break through the clutter.
My last “ah-ha” was realizing
how much better customer
service has become.
Many companies are truly
empowering their agents to
solve (not just listen to) issues.
Robin and her team;
Enjoying Halloween festivities
(right)
We recently relaunched our website with better navi-
gation and new redemption options such as airline tickets
and tickets to sports, music and theatrical events. We are
exploring new opportunities in social and mobile so look
for some new things to happen there.
What’s your advice for a novice loyalty
marketer?
Data is your friend. Many creative marketers are
afraid of numbers but data is the way to truly understand
who your best customers are—sometimes your most fre-
quent customers are not your most profitable (they are
often the deal seekers) and you need to understand the
difference. Creatively, just try things (but always have a
matched control group). You never know what will work! L
Loyalty Management™ •NOVEMBER 2010 15
 Q&A
LOYALTY FORUM: Q&A

Ask the
Experts
Q: Couponing, a strategy to build customer loyalty?

A: Couponing can encourage a prospect to try a company

or product. But you may be attracting a customer that
will always be price-sensitive, and will either wait for your
A:
next coupon, or be swayed by a competitive coupon.
To build that one-time purchaser into a long-term
customer, you should ideally deliver some other benefit
than price (unique product, fabulous customer service,
unique add-on services, etc.).
If the only communications you have with your clients
are your sales or coupon advisories, you are training your
customers to wait for your next sale or coupon.
But if your email retention series of messages also
contains other types of communications—info on how
to get more value from your products, case studies on
how other customers are using your products, copies of
articles giving your company/product positive reviews,
etc.—you can help emphasize your unique benefits other
than price (and help your customers see your key points
of differentiation, emphasize the value of your products,
etc.).
Sending an occasional “private sale” notice that is
available ONLY to your customers can help build loyalty.
Sending a special offer for volume purchases at a special
price can also prevent competitive inroads, by effectively
taking your customer out of the market for consumable
goods for a period of time. L
—Karen J. Marchetti
Internet & Direct Marketing Consultant &
Copywriter, SVP Client Services ,
SMAresource.com & ResponseCoach.com
16 Loyalty Management™ • LOYALTY360.ORG
Consumers need to be given a benefit for consistently shop-
ping with you. This doesn’t have to be a form of discount, but it
generally has to play a part. Whether this is a coupon, a vouch-
er, an instant reward, an offer sent by email or sms or purl, is
neither here or there.
The other point is that the reward or benefit, is of minor im-
portance. The more important point is that any offer or per-
sonalised message needs to be linked to a database of cus-
tomers and transactions—otherwise the offer, regardless of
the mechanic, is a blunt instrument that you can’t target and
truly prove the benefit. If you do have a database of customers
AND transactions, the opportunity is limitless, regardless of
the mechanic vehicle. L
—Andy Wood
Owner, GI Insight
To build that one-time
purchaser into a long-term
customer, you should ideally
deliver some other benefit
than price like fabulous
customer service.
 A: Building loyalty through coupons
is a formidable challenge today when
the numbers of the traditional coupon clippers
are on the wane. The likes of those can be pri-
marily found only during the holiday season,
actively hunting for a good bargain.
1. Multichannel redemption: Tactics such as
use physical coupon codes online or use
e-coupons at stores.
2. Integrate e-coupons with loyalty cards:
Customers should be allowed to tag their
loyalty cards with with e-coupon codes.
So, rather than carrying coupon clips,
shoppers can use their loyalty cards to
get coupon discounts as well.
3. Integrate with BI: Dig deep to understand
your customer segments, communities,
local events etc to derive a targeted cou-
poning strategy. L
A: Couponing is definite-
ly a way to build trial
and gain long term customers. I
would look at the category you
are thinking of couponing and un-
derstand the loyalty breakdown
between brands and where your
brand falls. That will have an im-
pact on your results and give you
a direction for which tactic and
value will work. Some tactics like
direct mail and checkout cou-
poning using loyalty card data
are great because you can target
non-loyals. Some other tactics
are much more broad and you
can end up couponing loyal con-
sumers that were already going
to buy the product. L
A: Coupons are a terrific
method to build loyalty of
your brands. Tactics include in-
pack coupons (if feasible based
on packaging), in-store account
specific, direct mail, and many
on-line coupons methods (corpo-
rate website and customer specif-
ic). Especially, in these economic
challenging times, coupons are a
great way to increase loyalty and
eliminate brand switching. L
—Darlene Morisco
Senior Account Executive,
Collaborative Marketing
Group

—Shijo Thomas —Brad Wensel

Business Analysis, Software Paradigms Senior Program Manager,
International Catapult Marketing

Customers should be allowed to tag their loyalty cards with e-coupon

codes. So, rather than carrying coupon clips, shoppers can use their
loyalty cards to get coupon discounts as well.

A: Coupons are lazy marketing and

they train the consumer to commod-
itize the product, store or service.
a coupon is a monetary tactical tool of limited
time value. There is very little if any positive
emotional attachment. Loyalty comes
It is well regarded in brand management
that to entice a consumer to try a new brand
Our contention is loyalty isn’t a thing (cou-
pon) but a state (feeling or emotion) and how when the
the marketer needs to offer an ‘equity enhanc-
ing’ incentive.
you move to that requires emotional related
tools. It is the way the consumer is treated, relationship
There are two key points.
1. A new customer needs an incentive or
how they feel about the store, the staff, the
surroundings, the product, the displays, etc. is elevated
reason to try the unfamiliar brand. Loyalty
comes from other things, so coupons to
Do they feel valued? Rewards rather than dis-
counts, for example are closer to the emotion-
past the
create loyalty is counter intuitive.
2. Coupons are not equity enhancing. In fact
al side. Being “rewarded” carries a completely
different connotation that can be traced back
transaction
they destroy perceived value.
Discounting has its place in the overall
to early childhood.
But rewards are just a small part of creat-
and taken to
marketing strategy but using coupons to de-
velop loyalty is not appropriate.
ing loyalty. There are a lot of other factors that
go into developing a sustained emotional pref-
“sustained
Couponing existing customers does not
build credible loyalty to a retail store, nor a
erence with the customers. L
emotional
product. Loyalty comes when the relationship
is elevated past the transaction and taken to
—Peter D. Morris SCSM, SCMD, preference.”
“sustained emotional preference.” By definition
CLS
CEO, Greenstead Group

Loyalty Management™ •NOVEMBER 2010 17

 LOYALTY FORUM: BOOKS

Loyalty Reads
EMPOWERED: Unleash Your Employees, Energize Your
Customers, And Transform Your Business
by Josh Bernoff and Ted Schadler
September 2010 | Harvard Business Review Press

You know it’s happening within your organization. Your people, armed with cheap, accessible technology, are
connecting with customers and building innovative new solutions. But who are these creative problem-solvers? How can you be one? And just as
important—how can you lead them?
We call them HEROes: highly empowered and resourceful operatives. Your company needs them because in the age of Twitter, iPhones,
Facebook, YouTube, and an ever-evolving torrent of Web information, your customers now step up to the counter armed with more data and access
than ever before, and in many cases, your company is overmatched.
In Empowered, Forrester’s Josh Bernoff—co-author of the pioneering book Groundswell—and Ted Schadler explain how to transform your
company by unleashing the mighty force of these HEROes. Like John Bernier and Ben Hedrington at Best Buy, who built an army of 2,500 tweeting
employees to reach out to customers online. Or Ross Inglis, who tapped into Internet computing resources to open an entirely new customer channel
for Thomson Reuters. Or John Stadick, who equipped 600 sales staff with iPhones and boosted profits at his construction rental company.
The truth is, one in three of your information workers already use easily accessible technologies that your company does not sanction.
Empowered gives you a prescription for embracing this covert innovation. At the heart of a HERO-powered business is a new pact between these
critical employees, company managers, and the IT department: HEROes build new solutions to meet customer needs, management sets clear rules
while encouraging more experimentation, and IT expands its role to both support and secure these business solutions.

CUSTOMER EXPERIENCE STRATEGY: The Complete Guide

from Innovation to Execution
by Lior Arussy
February 2010 | Strativity Group, Inc.

Much have been written about the importance of customer experience. But how do you actually develop and
launch such strategy? The stories of the Ritz Carlton, Disney, Southwest and Zappos are very popular among cus-
tomer advocates. But how do you develop customer experience in your company?
These are the two core questions Customer Experience Strategy: The Complete Guide from Innovation to Execution
was designed to address. Following a close loop blueprint, the book delivers a ready to implement recipe that turns customer experience into a man-
ageable endeavor. Lior Arussy is the founder of Strativity Group, a global customer experience research and consulting firm with clients such as FedEx,
Capital One, Nokia, Crowne Plaza Hotels and Merck. Utilizing the successful methodology developed by Strativity, the book details the steps to take
and the pitfalls to avoid as you seek to differentiate your business based on customer experience. With examples of customer experience in consumer
environment, business to business relationships, employees as customers and the citizen experience, the book provide applicable guidelines to diverse
customers’ relationships.
From setting up the strategy to innovating the experience at every touch point, the book provides in depth guidelines from real time experience of
the author deploying these strategies at corporations around the world. Hot issues such as developing the business case and executive sponsorship
are receiving special attention in the book with practical ideas how to address these classic challenges. Especially fascinating is one of the case studies
detailed in the book in which a utility company transform their performance from a negative 30 net promoter score (NPS) to appositive 54 NPS in 12
months. For those struggling with moving the satisfaction needle, this and other case studies will be very useful.
Customer Experience Strategy is an indispensable tool for every manager serious enough to actually move from talking to doing. For managers who
attempt to transform their organization to deliver consistent, delightful experiences, the book will become a critical tool for success.

18 Loyalty Management™ • LOYALTY360.ORG

TRUST AGENTS: Using the Web to Build Influence, Improve Reputation, and Earn
Trust
by Chris Brogan and Julien Smith
April 2010 | Wiley
There’s no question that the Internet has changed
the way we do business—especially when it comes to
marketing. Consumer environments are short on trust
and populated by consumers who are cynical, savvy and
informed. Though it’s easier than ever to reach your cus-
tomers, it’s less likely that they’ll listen. Today, the most
valuable online currency isn’t the dollar, but trust itself.
At the same time, social networks and personal
connections have far more influence on consumers
that your marketing messages ever will—unless your
business knows how to harness them. In Trust Agents,
two social media veterans show you how to tap into the
power of these networks to build your brand’s influence,
reputation, and profits.
Trust agents aren’t necessarily marketers or sales-
people; they’re the digitally savvy people who use the Web to
humanize businesses using transparency, honesty, and genuine
Two social media veterans show you how to tap into the
power of these networks to build your brand’s influence,
reputation, & profits.
PREDICTABLY IRRATIONAL: The Hidden Forces That Shape Our Decisions
by Dan Ariely
April 2010 | Harper Perennial
Do you know why you still have a headache after taking a one-
cent aspirin, but why that same headache disappears if the aspirin
costs fifty cents? Do you know why recalling the Ten Command-
ments reduces people’s tendency to lie, or why honor codes are
actually effective in reducing dishonesty at the workplace? Do you
know why, after doing careful and extensive research on which car
to buy, a random meeting with someone who had an awful experi-
ence with that car changes your decision? Why do we make deci-
sions contrary to our better judgment? What is better judgment?
Predictably Irrational challenges us to ponder these questions
and demonstrates how irrationality manifests itself in situations
(often very peculiar and hilarious situations) where rational thought
is expected. We all succumb to irrationality, it s about time we find
out how it affects our daily lives in a significant way. In this astound-
ing new book, groundbreaking in scope and totally original, Dan
Ariely cuts to the heart of our strange behaviors and presents out-
standing material that will keep every reader transfixed.
Predictably Irrational comes from Dr. Ariely’s work as a behav-
ioral economist, but it’s not for economists. Well, it is, but mainly
to the extent that it can help them the same way it can help anyone.
If the behaviors that skew our judgments were random or sense-
less, we’d be hard put to sort them out and make better decisions.
But research has shown that our irrationality is, in fact, systematic.
relationships. As a result, they wield enough online
influence to build up or bring down a business’s repu-
tation. This book will show you how to build profit-
able relationships with trust agents, or become one
yourself.
In an online world defined by its transparency, be-
coming a trust agent is no easy task, but once you’ve
established your reputation, you can build influence,
share it and reap the benefits of it for your business.
When you’ve learned a trust agent’s secrets, your
words can carry more power and more weight than
any PR firm or big corporate marketing department.
Learn to use the power of the Web and social net-
works for your business now. Trust Agents gives you
all the tools and strategies you need to do it the right
way—honestly, effectively, and profitably.
This sly and lucid book is not about
your grandfather’s dismal science.
Ariely’s trade is behavioral economics,
which is the study, by experiments,
of what people actually do when
they buy, sell, change jobs, marry
and make other real-life decisions…
[Predictably Irrational is] a concise
summary of why today’s social
science increasingly treats the markets-know-best
model as a fairy tale.
—David Berreby, The New York Times
People will make the same types of mistakes over and over, in a predictable
manner, because the behaviors have structural origins. So recognizing them
and understanding them offers us a way to do better. And that’s the aim of
this book: to leave you with new knowledge of human nature, derived from
a wide range of scientific experiments and findings, that will help you make
better decisions in your personal life, your business life, and in the choices we
all need to make about our collective welfare.
Loyalty Management™ •NOVEMBER 2010 19
 FEATURES

Keep Them Guessing:

Why Loyalty Programs Need
Randomness
by Barry Kirk, Maritz Loyalty

P redictability is reassuring. It’s also totally boring. Think about it—when did you last you call IHOP to see if they
still served pancakes? Or had any doubts whether the fall TV lineup would include a reality show where a houseful of
beautiful people competes for televised validation? Some things are just a sure bet. The upside of the predictable things
in life is that we don’t waste any brain power worrying about them. The down side is…we don’t waste any brain power
paying attention to them, either. For anyone trying to influence human behavior, that’s a problem.
Game designers have intuitively known this for centuries. Randomness, or “chance,” is woven into most great game
experiences, through the draw of a card or a roll of the dice. Randomness is novel, and novelty always gets our atten-
tion and keeps us interested. The trick, of course, is balancing the random with the predictable to create a compelling
experience, but not a frustrating one. As Carnegie Mellon professor and game designer Jesse Schell puts it:

“Risk and randomness are like spices. A game without a hint of them can be com-
pletely bland, but put in too much and you overwhelm everything else.”
But game designers aren’t unique in their ability to understand how humans think. Thanks to the growing fields of
neuroscience and behavioral economics, loyalty marketers now have a larger window into how human beings connect
with what’s important to them. We’re coming to understand that humans are more than rational. Our brains are wired
for social experience more than any others. We are biologically driven to engage in competition and raise our status
amongst peers. We enjoy playing and learning through play. Rewards motivate and intrigue us. We desire to master
skills, and we set goals to achieve that mastery. When we find these elements in an experience, we “play” harder, lon-

20 Loyalty Management™ • LOYALTY360.ORG

ger and with more enthusiasm. We become more
involved and more engaged.
Through this new lens, we’re also learning that
typical loyalty programs are stale. Marketers are
focusing too much on structuring programs for
a mythical consumer who only thinks rationally
about the program value proposition. For instance,
marketers using this “rational consumer model”
are tending to react to the current economic con-
ditions by turning their loyalty initiative into a dis-
count program. Marketers start out thinking they
need to be more aggressive in offering discounts.
With the rise of so much “social couponing”—just
think about Groupon.com and its imitators—the
discount offer is ev-
erywhere now, and
essentially it deval- Neuroscience shows that
ues the brand. It’s a
zero-sum game, and unexpected rewards have
brands are going to
continually have to up a heightened emotional
the ante to keep peo-
ple engaged at that effect, compared to the
level.
As marketers rewards participants know
we also misguidedly
pride ourselves on are coming. This means
creating rules struc-
tures that are fair, in “surprise and delight” isn’t
part, because they are
highly predictable— just a good idea; it’s a smart
members know ex-
actly how the program financial choice for a loyalty
works, how to earn
their points, and when program.
they can redeem for a
reward. Unfortunately, this focus on the rational
and predictable means we’re also missing major
opportunities for engagement, since it’s really a
recipe for asking your members to put their brains
on auto-pilot.
The model of “rational economic benefit” is not
the right strategy for building true loyalty because
it’s based on a very limited understanding of how
the human brain responds to experiences.
Neuroscience studies are helping us under-
stand that all human beings are both rational
and emotional, and that consumers attach more
meaningfully when there’s an opportunity for an
emotional connection with the brand or program.
This emotional connection may take the form of
a chemical—the neurotransmitter called dopa-
mine – being released into the body which trans-
lates into a feeling of pleasure. Studies show this
same “pleasure chemical” is released when we
receive rewards. We now also know that people
experience the same feeling with other program
attributes that are often underdeveloped in a loy-
alty program, such as status, social interaction and
randomness.
The impact of randomness in this chemical in-
teraction is that unpredictable wins produce the
greatest pleasure response in the human brain.
Neuroscience shows that unexpected rewards
have a heightened emotional effect, compared to
the rewards participants know are coming. The
effect applies even when the extrinsic value of
the reward is less than the expected reward. This
means “surprise and delight” isn’t just a good idea;
it’s a smart financial choice for a loyalty program.
When you bring a sense of randomness into a
loyalty program, you can provide less expensive
rewards (because
the intrinsic value is
greater) and receive
the same engagement
benefits.
Unpredictability
also equals attention,
as it is part of the
deep programming
of the human brain to
focus on the novel and
to seek patterns even
in those experiences
that are truly random.
Think about it—if you
were a busy caveman
hunting on the savan-
nah, you needed to
quickly shift your fo-
cus to anything unex-
pected on the horizon
because of the possi-
bility that it might be something intent on eating
you. Our modern brain retains that tendency, find-
ing itself drawn to novelty and attempting to find
patterns in almost everything. This is why we take
note of the sudden death of a celebrity, and then
wait for two more well-known people to pass away
so we can declare with erroneous certainty, “See,
celebrities always die in threes.” And while our re-
sponse to it is not always rational, randomness is
a very effective way of telling the brain to wake up,
pay attention and try to figure out what is happen-
ing in the moment.
A random element can be applied to literally
any part of your program. Charter Communica-
tion’s Live It With Charter program includes ran-
dom redemption periods for which members only
receive a 24-hour notice each month. Starbuck’s
loyalty program is well known for sending loyalty
program members unexpected direct mail cou-
pons for new product trial and discounts. And
upstart location-based service Whrrl has recently
launched their Society Rewards loyalty program
continued on next page »
Loyalty Management™ •NOVEMBER 2010 21
 Keep Them Guessing: Why Loyalty Programs Need Randomness (continued)

Keep in mind the need

to occasionally switch
things up—ironically,
even randomness
becomes boring if
it starts to feel too
predictable.
where the rewards are structured as “prizes of
chance” that members might win by participating
in engagement behaviors.
Even in Foursquare (a more established geo-
location service), the aspect of randomness can
delight and surprise. Say I visit my neighborhood
pub and check in. I take a minute to see who’s
visited, and how recently. The pub’s e-marketing
team sees that I’m back and tweets me the details
on today’s special, with an offer to enjoy a bever-
age on the house. Using Foursquare, the pub can
deliver random experiences that don’t cost more
than a few bucks. In turn, I’m a happy patron who
is thrilled to come back again and again to vie for
pub “mayorship” and the mere possibility of an un-
expected reward.
However you choose to introduce a random el-
ement into your program, the best approach is to
adopt a test-and-learn methodology to determine
where you can have the optimal impact on behav-
ior. Keep in mind the need to occasionally switch
things up—ironically, even randomness becomes
boring if it starts to feel too predictable. It’s also
important not to overdo it—randomness should
be an element of your program, but not the entire
program since the predictable also serves a func-
tion in giving the participant’s brain a mental mod-
el of the program it can reliably attach to.
Each brain is unique in how it responds to stim-
ulation, but there are clear advantages in looking
to neuroscience to help improve loyalty marketing
initiatives. When you shift your program’s sole fo-
cus from providing extrinsic rewards—the “stuff”
participants get with points—you may be amazed
by the world of options available to create a more
intriguing program experience. The mixing of in-
trinsic wins—such as the “pleasure chemical” ex-
perienced from a surprise—with more traditional
extrinsic rewards will strengthen brand marketers’
ability to build both lasting and meaningful con-
sumers connections. L

22 Loyalty Management™ • LOYALTY360.ORG

Loyalty.
Loyalty. Reinvented.
Reinvented.

Loyalty programs are a strategic asset.

Loyalty
To capitalizeprogramson them are a strategic
requires asset.
going
To capitalize
beyond on them requires going
rewards.
beyond rewards.
First Data provides intelligent, data-driven loyalty solutions that
provide
First Datainsight to make
provides your loyalty
intelligent, program
data-driven moresolutions
loyalty effective.that
Utilizing
state of the art analytics, First Data enables you to understand
provide insight to make your loyalty program more effective. Utilizing your
customers,
state of thepredict purchasing
art analytics, behavior
First Data andyou
enables maximize revenue.your
to understand
First Data ispredict
customers, uniquely skilled at providing
purchasing our clients
behavior and maximizewith more relevant
revenue.
and valuable rewards for their customers, increasing customer
First Data is uniquely skilled at providing our clients with more relevant
acquisition
and valuable and retention
rewards and creating
for their stronger
customers, relationships.
increasing customer
acquisition and retention and creating stronger relationships.
To learn more visit firstdata.com
To learn more visit firstdata.com
Loyalty Management™ | November 2009 9
Loyalty
©2009 First Data Corporation. All rights reserved. All trademarks, service marks and trade names referenced in this material Management™
are the property of their•NOVEMBER
Loyalty Management™ |
respective owners.
November 2009
2010 23
9
©2009 First Data Corporation. All rights reserved. All trademarks, service marks and trade names referenced in this material are the property of their respective owners.
 FEATURES

The Care and Feeding

of a Customer
by Robert A. Kobek, Mobius Vendor Partners

I t is very hard for me to imagine a discussion surrounding customer care is really necessary. But for some
reason all businesses swat at the issue as if it is a breaking story on a major news network.
Concentrating on what it takes to ensure a pleasant customer vacation experience is a natural part of busi-
ness, at least I think it is. But there are other areas we touch, or should touch, our owners and guests.
Often “care” is confused with service, which is, no doubt, a part of caring for a customer. Caring for a cus-
tomer goes beyond customer service. Customers are assets that should be protected with every fiber of the
company’s being.

First, the definition of a customer lies in the attitude of the beholder. Dictionary.com defines it as:
cus·tom·er [kuhs-tuh-mer] –noun
1. a person who purchases goods or services from another; buyer; patron.
2. Informal. a person one has to deal with: a tough customer; a cool customer.
I will throw in a 3rd definition:
Those who provide goods or services on behalf of others. syn. Employees.

For the intellectuals among us, how hard is this to understand?

Adam Smith conjured up the notion of supply
and demand in his 1776 publication The Wealth of
Nations and Theodore Levitt bolstered the argu-
ment in his 1960 Harvard Business Review mani-
festo (Marketing Myopia) “that companies should
stop defining themselves by what they produced
and instead reorient themselves toward customer
needs.”
Adam Smith’s premise was that increasing rev-
enues and decreasing expenses results in a profit.
It was Benjamin Franklin that took that premise
and installed it into what we know as capitalism in
the United States.
If the premise that it takes five times the re-
sources to gain a new customer than it does to keep
one is correct, the following information is meant
to establish a new or renewed attitude toward
timeshare owners, guests and employees.
If a timeshare tour hovers around $500 then it
seems logical to point at least $100 per customer to
take care of their needs. Add to that the cost of the
sale and a light bulb should go off in the head of
every property manager in timeshare that the bud-
get dedicated to the care and feeding of an existing
customer is most likely far too low.
And, there are efficient tools that can be used to
continue to touch customers who cost nothing, or
very little at all. Most fall into the category of com-
munications. Talk to them, and let them talk back.
Ask questions and respond to the answers, provide
information, good information, not “so what” stuff.
The vehicles are there; mail, phone, internet,
and on site interaction should all meld with the
vacation experience to create the warm fuzzy for
our customers that will decrease default rates, in-
crease visits, decrease complaints and increase
compliments. What could be wrong with intelli-
gent and planned efforts to find out what they are
thinking instead of talking to ourselves about what
will and won’t work?
As a matter of respect for this forum, a com-
mercial about a product we offer is inappropri-

24 Loyalty Management™ • LOYALTY360.ORG

 ate; however, it is a great example. little money and becomes a larger

Once a customer Our product can touch every owner,

guest and exchanger that visits your
problem with a non-budget price tag
attached that costs far, far more. I
has been property, and is a proven profit cen-
ter that has its focus on customer
know about this phenomenon be-
cause we provide other services to fix
acquired, the key care and experiences.
Yet at times we are informed, “It
things that could have been avoided.
However, think about the ques-
is to keep him. A is not in our budget”. Since I am no
rookie to sales, the “budget” objec-
tion and answer. Why would you
not want to take every opportunity
company retains tion is a very weak objection and ev-
ery sales professional knows that is
to touch your customers? Each time
you do, you gain loyalty, and every
its customers a blow off.
Or, if it is a real issue, it is more
time they come back, they make you
money. As a possible unintended
by delivering often than not the musing of that
person who only looks at expenses
consequence, the more pleasant the
experience, the greater the likeli-
on its value and forgets there is revenue opportu-
nity associated with caring for a cus-
hood they will refer a friend or fam-
ily member.
proposition, so tomer. In caring for a customer the
budget issue is a weak excuse for not
In the marketing and sales of
timeshare today, the collapse of end
that the customer wanting to change, alter or delete a
process that most of us inherited and
loan financing forced us to kick up,
“owner referral” programs. Offer the
has no need to figure that since it is a legacy, it has
some place of honor. We get bolted to
owner something of perceived value
and they will inundate us with the
look elsewhere. outdated processes and it just seems
like too much hassle to change them.
names, addresses, phone numbers
and email information of all kinds of
Therefore, ensuring There is so much affinity to the old
ball and chain that we continue our
relationships.
More importantly, the success of
high-quality service old ways of treating customers with
policy rather than service.
an owner referral program is wholly
dependent on the owners start to fin-
is fundamental. A result is a surprise issue that ish experiences. If they love it, they
could have been resolved for very will refer; if they like it, they might
continued on next page »

Loyalty Management™ •NOVEMBER 2010 25

 The Care and Feeding of a Customer (continued)

refer; if they hate it, they won’t refer. •The vacation experience begins If you don’t know how, find
(The same is true in ensuring main- before check in. The tone of the someone who does. Just as you
tenance fees and other payments are experience starts in your call can’t tell the players without a
made in timely fashion). center when the owner, exchang- program, you can’t know what
Today the acquisition cost for er or guest calls to inquire and/or needs fixing unless you identify
new business is the same. There is make a reservation. If your man- the gaps in service.
no decrease in the per tour expense, date is to “save on seconds”, the •Measure, consistently, con-
just fewer tours. The decrease in caller knows and will leave the stantly and regularly.
the variable side of the ledger is be- experience with a lukewarm per- Do more of what pops up as
cause we are selling less, being good and less of
but the cost per sale is
the same. There is no The notion that; “if it ain’t broke, what is bad. Ask genuine
questions regularly and
increase in profit, just
holding our own until don’t fix it” is old, tired and wrong. consistently. Act on the
answers.
things get better and the
bankers tell us it’s ok to Imagine the cave dweller who •Customers and em-
ployees are the center
go back to the old ways
of marketing and selling. slipped on a rock and figured out of your universe. All
good things sprout from
And, the
(customer) is getting
owner
that he could invent a ball bearing, them and all bad things
fester from them.
creamed with offers that
will eventually lead to a
then alas, the wheel. Neither of •The speed of light is
442,000,000 miles an
dry well. While some-
what valuable today,
them budget items. hour. Coincidently
that is the same speed
there are a finite number bad new travels.
of owners (4 million +/- depending ception, at best. Good news moves at the speed of
on who you ask). •Dress well, everywhere, every- a snail relaxing.
The proper care and feeding of a one, every time. The next per- •There are no shortcuts to care.
customer will produce referrals, in- son to call you or walk in the door Every time you think there is,
crease traffic at a resort, and cause is a VIP. Get rid of clutter, expect you end up breaking a rule and
money to flow. It minimizes com- everyone to have shined or new you will be reminded why it was
plaints and creates efficiencies in shoes regardless of their function a rule in the first place.
areas you may never have thought of and there is never an acceptable •Mind your etiquette. Answer
(like savings on your toll free lines). time when property and personal every email and return every call.
Try these “rules of thumb” as a hygiene should not be impecca- Be responsive. Learn to write
guide and add them to what you al- ble. Be mindful of language and in business speak. Teach your
ready have to ensure the proper care grammar. employees to write in business
and feeding of your customers. •It is the little things. The devil is speak. Please and thank you go a
not in the details, the answers are very long way.
•Treat employees like customers. in the details. And, finally, none of us knows it
There is a direct correlation be- •Quality is a path, not a result. all. Keep learning, keep caring and
tween employee satisfaction and Only you can define the quality stop talking to yourself. Instead of
service delivery. Employees who standards and only you can in- swatting at the issue do something.
like their jobs will better serve sist they be met and only you can Stop trying and take action.
customers and stay on the job decide on the commitment you In the words of Charlie Weis,
longer thereby decreasing cost make to maintain and grow on head football coach of Notre Dame,
and increasing revenue. the quality path. “yesterday is over, tomorrow may not
•Satisfied customers are not nec- •Document all your processes. come, there is only today”. L
essarily loyal customers.

26 Loyalty Management™ • LOYALTY360.ORG

29
 FEATURES
The Customer Contact
Center: Your Branding
Moment of Truth
by Mary Naylor, VIPdesk
A s much as $40 billion/month is spent in the U.S. on marketing—to build brand recognition, differentiate brands from their
competitors, and ultimately win sales. Much of this well-honed and refined corporate branding, marketing and advertising—ranging
from more traditional outreach such as newspaper and television advertising to online advertising and social media marketing—is
being implemented to drive consumers to take action. We want consumers to visit our stores and websites, to call us and e-mail us,
and ultimately spend money with us.
H owever given all of the time, money, and attention that
is being spent to drive customers to action—what are we doing
with our customers once we actually have them where we want
them—what are we doing at the “moment of truth”? When a
marketing campaign is successful, and customers reach out and
engage with our brand, the first (and often times only) interac-
tion they have with us is via our customer contact center. Does
the experience that your customer has with your brand continue
through their experience with your contact center?
Does the promise of your brand match the reality of the cus-
tomer experience?
Brand Experience Management: Aligning Your
Brand Promise and Ultimate Customer Experience
Into the Contact Center
The old adage about first impressions making lasting impres-
sions still rings true today. Every interaction a consumer has with
your company is so much more than just an information session
or sale, however all too often very little attention is paid to how
the brand experience continues for the customer once they leave
your store or navigate off of your corporate website.
The bottom line is that no matter where they are or what the
venue, every interaction your customers have with your brand is
a unique marketing event. Every impression that they have—from
the window display in your retail outlet at the local shopping mall
to the contact center representative who helps them when they
call your toll-free number to what they read on your corporate
Facebook wall—is a branding experience.
In order to be effective, a brand strategy must extend all the
way to the most critical, personal point of contact: when a cus-
tomer or prospect calls, sends an email, or initiates a chat to find
out more. This personal contact is what is going to determine
whether your customer continues to remain loyal to your brand,
or whether they transfer allegiances to a competitor—a 2007 Ac-
centure study revealed that 50% of customers who switch brand
allegiances do so because of poor contact center experiences.
28 Loyalty Management™ • LOYALTY360.ORG
Is what you deliver—your ultimate customer experience—
aligned with your brand promise?
Six Strategies for Aligning Your Brand Promise and
Ultimate Customer Experience
Give your customer service team a test drive.
Have you ever called your own toll-free number? I’m sure
you have heard sample calls, however every marketing execu-
tive should call their own toll-free number at least once. When
you do, call from your home or cell phone, preferably in the
evening or on a weekend. Don’t call the “employee hotline”—
call the number which is printed on your packaging, published
on your website, and promoted in your advertising and direct
mail. Then when someone answers—be a customer. Ask a few
questions, then make a purchase, and see what happens next.
Chances are, you will be very surprised at the results.
Listen to the voice of the customer
If you aren’t making decisions based on customer feed-
back—how are you sure your decisions will resonate with
your customers? Your customer service and quality assurance
teams are already capturing the voice of your customer with
every interaction—and trust me, they will look forward to shar-
ing it with you. Every member of your marketing and executive
team should review customer feedback on a regular basis—
ideally weekly—in order to gain strategic insight into what your
customers are saying about your brand.
Build a customer-centric corporate culture
Do you truly empower employees to act as champions
for your customers, or is customer-centricity merely an af-
terthought? A customer-centric corporate culture must be
embedded throughout the organization—not just in the con-
tact center. Southwest Airlines is a company that empowers
its employees to go the extra mile to ensure customer satis-
faction—employees have been known to even give their own
companion tickets to passengers they have never met before,

to ensure that they make it to their final
destination. The result? 2009 was South-
west’s 37th consecutive year of profitabil-
ity.
Replace your call center agents with brand
advocates
Does your front line have a true pas-
sion for your brand and what it stands for?
Your contact center is your front line—the
first, and oftentimes only, contact that
your customers have with your brand. In
order to deliver upon your brand promise,
your front line must have not only a clear
understanding of, but authentic passion
for, your brand. Passionate contact center
agents are true advocates of your brand—
both serving your customer’s immediate
needs and leaving a lasting impression that
will strengthen customer loyalty and truly
differentiate your brand from that of your
competitors.
It’s the little things that make a brand
Do you think of the little things that
give your customers a complete brand ex-
perience? If you spend hours debating the
font used in your corporate email signa-
ture, take a few minutes to think about the
little things that add up to really express
your brand. Such as hold music. I recently
called the toll-free number of a very trendy
retailer in order to purchase some back-to-
school clothing for my niece—and spent
several minutes listening to smooth jazz
while on hold. This was a very different mu-
sical experience than the latest Lady GaGa
hit (extremely popular with the retailer’s tar-
get demographic) heard by everyone pass-
ing within 25 feet of the same brand’s retail
outlet in the local mall.
Mix up your metrics
Is your contact center being evaluated
on metrics conducive to a positive brand ex-
perience? Often, contact centers measure
success based on key performance indica-
tors (KPI’s) such as average speed of answer,
average handle time, cost per contact, and
first contact resolution. While these metrics
are certainly indicative of a contact center
functioning as a well-oiled machine, they
aren’t necessarily those that are going to
Does your
front line have
a true passion
for your brand
and what it
stands for?
provide the ultimate brand experience.
For instance, if your agents are being
measured—and potentially compensated—
partially on average handle time (AHT),
they are literally being rewarded for getting
your customers off of the phone as quickly
as they possibly can. Even if every call ends
with “Is there anything else I can help you
with?” they don’t really mean it. They want
to end the call and move onto the next one.
In contrast, there is a direct correlation
between first contact resolution and over-
all customer satisfaction. A simple shift
in focus from AHT to that of first contact
resolution can dramatically shift the overall
brand experience your contact center pro-
vides.
Memorable Customer Experiences
Produce Memorable Results
It is hard to turn your customer service
center into a branding powerhouse over-
night, especially if you have historically
looked at your contact center as a cost
center, and not the strategic business unit
that it can be. An enterprise-wide shift to
a customer experience more in line with
your brand promise, versus a customer ex-
perience more in line with a contact center
that operates like a well-oiled machine can
be a challenge, as this is a dramatic shift
in mindset for many companies. However
time and time again, a dedication to creat-
ing memorable customer experiences pro-
duces memorable results—just ask South-
west Airlines. L
Loyalty Management™ •NOVEMBER 2010 29
 FEATURES
Dead-On: Grateful Dead
Has Taught Us So Much
About Customer Loyalty
by Erin Raese, Loyalty 360
M ention the iconic band, The Grateful Dead, and most
people think about peace, love and rock ‘n’ roll. What should
also come to mind, however, is the band’s indisputable best-
practice lessons about building a base of devoted fans. Well
before the advent of the Internet and viral marketing. The
Dead were visionary geniuses in the way they built community
and spearheaded the concept of social networking to create a
solid base of loyal, devoted fans.
It’s all about the community
We all want to feel a part of some-
thing, to connect with others that share
Marketers would
common interests. And for the evangelic
base of Grateful Dead Fans, known affec-
be wise to create
tionately as “Deadheads,” being a part
of the band’s familial community drives
great content
their emotional connection to the band. that is meaningful
For these loyal fans, it’s not just about
listening to the music, it’s about being for an audience
part of the experience. For hours (even
days) before Dead shows, fans would instead of being all
fill the parking lot dancing, celebrating
and interacting with one another. Don’t about products and
know each others’ names? Doesn’t mat-
ter. Deadheads share an immediate and services.
intimate bond through which friendships
are born and memories are made. And
through these experiences, fans’ devotion to The Dead inten-
sifies.
Because of this strong, dynamic community, The Dead
has not only sold out shows even in the toughest of economic
times, but they have achieved this primarily via word of mouth.
There’s no need (and never has been one) to advertise a Grate-
ful Dead concert. Once the Deadhead community hears about
upcoming concerts, the news travels like wildfire (even before
the Internet)—with shows typically being sold out in the mat-
ter of minutes. And for those fans unable to score that sought-
after ticket, no worries. Most will just head to the parking lot
before the show to soak up that part of the experience.
Content is king
People unfamiliar with the Dead’s “content marketing”
value proposition may also wonder why the band has always
allowed their fans to tape record their shows and then freely
distribute these bootlegs.
30 Loyalty Management™ • LOYALTY360.ORG
Unlike the vast majority of bands that banned recording
at concerts, the Dead encouraged fans to tape and then dis-
tribute their legendary live shows. In fact, they didn’t just en-
courage fans to record their legendary live shows. The band
proactively set up “taper sections” where fans’ equipment
could be set up for the best sound quality. Their belief was
simple (yet radical): If we give our music to 10 people, and
they give it to 10 people who give it to 10 people and so on,
soon everybody knows about us and our
reputation and value as musicians, artists
and creators are enhanced.
What’s more, this broad, genuine ex-
posure led to millions of people wanting
to take part in The Grateful Dead concert
experience. As new fans were drawn to
the live shows, ticket sales increased and
a key profit center for the band—mer-
chandise sales—grew.
At the core, this is what content mar-
keting is all about: giving away something
of value in order to drive the sale of some-
thing related. Selling studio albums (or
even bootlegs recordings of the shows)
was not the goal of the Dead’s business
strategy. The holy grail of their marketing
efforts was getting more people to expe-
rience the live show. With the explosion
of social media we have seen this strategy become increas-
ingly commonplace for musicians to do via MySpace, Face-
book, YouTube, etc. But when The Dead adopted this ap-
proach they were light years ahead of their time.
As Brian Halligan and David Meerman Scott pointed out
in their book, “Marketing Lessons From The Grateful Dead,”
marketers would be wise to create great content that is
meaningful for an audience instead of being all about prod-
ucts and services. Business opportunities and sales results
follow as a content strategy develops awareness, reach and
trust.
Sure, The Grateful Dead may prompt images of tie-dyed
shirts and twirling dancers, but for the marketing commu-
nity the band should also prompt images of sheer customer
loyalty genius. Fifteen years after the death of Jerry Garcia,
the Deadhead community remains strong and vibrant—
thanks to seeds that were sown years before the social me-
dia explosion. L
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 FEATURES
In-the-Moment
Communications
Loyalty Programs &
Today’s Mobile Consumer
by Bob Gold, Gold Mobile
H ave you ever thought about the way we think about
loyalty? As marketers we spend much of our time trying to
make people loyal to us, to our brand. When you really think
about it, that’s not what loyalty is about. If we want someone
to be loyal to us (like our spouse), we need to demonstrate
loyalty first, right? Think about it, we have loyalty backward.
As marketers we should be demonstrating loyalty to our cus-
tomers not telling them to be loyal to us.
It really is the retailer or brand who needs to be loyal to
the customer and not the other way around. This simple, but
subtle, reversal of a retention and loyalty mindset will pro-
duce a much higher ROI for your CRM and loyalty program
spend.
Anecdotally, this “reversal of approaches” is much more
consistent with today’s consumer perceptions of their entitle-
ments as demonstrated by the digital social media phenom-
ena. For example, accepting a “Friend” is considered a right
and privilege of the individual and people make that decision
based on trust and credibility (consciously or sub-conscious-
32 Loyalty Management™ • LOYALTY360.ORG
ly) of the requesting party. By deploying concrete actions
that demonstrate your brand’s desire to truly understand
an individual consumer before bombarding them with
incentives, places you in the same category of what they
truly want out of any friendship—a reciprocal and mutu-
ally beneficial relationship. The brand elevation to a real
“friend” should derive a much higher return on invest-
ment.
So, if we are willing to admit (even quietly to our-
selves) that our loyalty solution design is backward, what
is the core new strategy to become an integral part of a
consumer’s mobile lifestyle? Let me introduce to you a
new loyalty paradigm called “In-The-Moment”. After
all, In-The-Moment is how people experience their life
events; but how does your plastic loyalty card talk to your
customer during their hectic day? Or when your custom-
er wants to know their entitlements right then and there?
You can increase spend and satisfaction by enabling your
loyalty members to engage in a two-way digital dialogue
during their “moment-of-truth.” Mobile CRM platforms can
be configured to read content and searches on the fly and re-
act based on programmable and personalized business rules.
The following represent specific In-The-Moment insights
and tactics to transform your loyalty program to be better
aligned with today’s mobile consumer.
To our loyalty point above, who gives who points? Maybe
the smartest loyalty program empowers the customer to rate
the retailer/brand in various interactions by giving them loy-
alty points for aligning with their lifestyle? Isn’t that the ul-
timate motivator for all of us?—Where we can voice and rate
others through our own “lens” and set of experiences. Let’s
erase our old beliefs on the roles of the retailer and the cus-
tomer in building a deep and intimate relationship. The in-
volvement and empowerment of people will create a deeper
bond, increased trust, and earned credibility…leading direct-
ly to the cash register! This is a great example where you can
apply In-the-Moment surveys that provide immediate feed-
back on how to capture their business—now.
Self Management
We have heard of self-managed IRA accounts and holistic
care programs where the individual has more control; What
about “self-managed” loyalty programs (within certain rules
and guidelines)? This can be an ideal framework for today’s
consumer and is now practical given the advances in mobile
technology and tools.
•Self management means that emotionally it becomes
“their” loyalty program and with that comes pride of own-
ership. They will have renewed interest in sharing and
wanting it to succeed—sub-consciously they will perform
actions to achieve greater rewards. It just makes sense.
Moreover, in today’s connected world where it is so easy
to comparison shop, you need an extra level of emotional
bond to your loyalty program, so why not let the customer
provide it themselves! Look for platforms that provide
preference-based opt-ins and management enabling con-
sumers to only receive their selected categories of content
and offers.
Influence
Many people feel special when you ask their opinion—now
there are easy and cost effective mobile surveys and feed-
back techniques (with incentives for participation)…so ask
away!
•Behavioral science shows more people identify and recip-
rocate with another person, community, or a brand the
more they feel the ability to influence a situation. Plus you
can reduce a lot of analysis time and costs if the consum-
er is telling you exactly what to do to get more business!
Look for platforms that have automated survey creator
and real-time feedback mechanisms.
Either Party Initiate
Using GPS techniques on cell phones can work but they have
many lurking emotional and real physical issues; by empow-
ering your customer to find the deal she is looking for when
she wants to engage is totally in line with how people com-
municate in their social media networks. For example, your
analytics determine Mary should get a coupon for shoes this
week, but she is now shopping for her brother’s birthday gift
during her lunch break and has 30 minutes to complete a pur-
Think about it, we have loyalty
backward. As marketers we
should be demonstrating
loyalty to our customers not
telling them to be loyal to us.
chase and wants to know the men’s special offer items based
on her loyalty status.
•The answer is to construct a loyalty communications sys-
tem that enables the member to initiate the communica-
tions on their terms—it is not just about the weekly email/
mail or website communications.
AHA Moment
For your customers, how do you create a sudden “insight” that
motivates a purchase? Insights typically result in a new cog-
nitive interpretation of a situation that point people to a solu-
tion to a problem (since you want the consumer to reach the
“right” conclusion—right then and there). One simple answer
is Comedy/Fun: Behavioral scientific research has shown
when people are in a positive mood they are more receptive to
being insightful and solving problems. Mobile is a great way
to stimulate that “AHA Moment” by creating a multimedia
“coupon” or special offer that delivers both smiles and finan-
cial incentives to increase conversion and redemption.
•The overarching tenet is to have a platform that can pro-
vide you and your agency with the ‘Freedom to Create” by
enabling campaigns to mix and match video, images, text,
2D barcodes, and voice in the consumer engagement ex-
perience.
In summary, we’re now in a world of consumers who
are socialized for instant access and gratification. Technol-
ogy and access to information has exceeded what the human
mind can truly absorb and act on. Retailers and brands that
successfully deliver “in-the-moment” contextually relevant
lifestyle communications will elevate their image and win
both mindshare and dollar share. L
Loyalty Management™ •NOVEMBER 2010 33
 TECHNOLOGY, TRENDS & REWARDS

Mobile Marketing:
Top 10 Technology Strategies
All Marketers Must Know
by Robert Carroll, SDL

T he mobile channel is playing an increas-

ingly strategic role in marketing. According to
industry analysts at Gartner, worldwide sales
of mobile devices were up nearly 14 percent
in the second quarter of 2010 over the previ-
ous year. Sales of smartphones are booming
despite the lackluster economy. To address
the challenges associated with this growing
market, companies have to take a hard look
at their technology strategies, not only their
business ones.
It used to be that marketers’ only had to
worry about adjusting their companies’ web-
site format to fit mobile devices. But now
companies need to figure out how to incor-
porate geo-targeting, profiling, and time and
location-based marketing to better support
and engage their customers, anytime and
anywhere.
Smart and forward-looking marketers are
already leveraging a new breed of marketing
technology platform to engage the mobile
channel. For example, more than two dozen
international airports are already engaging
mobile customers in ways never thought pos-
sible. We all know that the travel experience
can be burdensome and irritating, but the ser-
vices supported by this new type of marketing
platform can make the time spent at an air-
port pleasurable and stimulating. The Denver
International Airport, for example, recently
rolled out a new mobile phone app, web site
and digital signage. All of these marketing
channels use geo-location marketing to al-
low concessionaires, advertisers and others
to provide travelers with relevant content and
real-time, personalized prompts on their mo-
bile devices as they move through the airport.
Travelers waiting for a flight can also reap
benefits while killing time at a shopping con-
course or food court. Based on their profile,

34 Loyalty Management™ • LOYALTY360.ORG

location, time of day, and user-generated ratings and re-
views, travelers can now receive high-value targeted pro-
motions and coupons. Once they are ready to depart, those
same travelers receive weather information and discount
coupons valid for their destination city.
The ability to identify and message to such a highly con-
vertible consumer in real-time is new to the industry, but
airports and concessionaires are already seeing the ability
to offer the best customer service and build loyalty among
travelers.
How It’s Done
All of us know that to empower marketers to create, de-
liver and manage truly personal and valuable Web engage-
ments requires a new breed of multi-channel communica-
tions and marketing platform. A ‘one-site-fits-all’ website
won’t cut it. What’s more, the mobile channel should be
integrated into all of your systems in a uniform fashion. The
goal is to have customers enjoy the same consistent, brand-
ed experience, whether they’re engaging via a desktop, lap-
top, smartphone or even the company-managed online tech
center or community forum.
These days, even marketers must have a basic under-
standing of mobile technology requirements to ensure their
success. Here are the Top 10 technology issues that market-
ers should keep in mind when choosing a technical platform
for their mobile channel:
1. Look closely at your current architecture to ensure it
can support all your possible use case scenarios, now and
in the future.
The design of your Content Management System (CMS)
should involve all needs, including those around governance,
localization, device type, and communication. You can mini-
mize the potential for disparate systems by ensuring robust
read-and-write functionality to all deployed back-office sys-
tems.
2. A CMS that is components-based is ideal for support-
ing the mobile channel.
Web page components such as content, digital assets or ap-
plications can be easily repurposed within channel-specific
templates, dramatically reducing the complexity of manag-
ing content and release processes.
3. Localization, localization, localization!
The global marketplace demands that a CMS enable com-
panies to create language variants easily, and manage the
translation process and regional go-to-market strategies.
However, you have to consider how content variants will
individually address the limited screen space of a mobile
device. Being able to create customer-experience variants
delivered specifically for devices with different form factors
will help companies gain huge cost savings, management
efficiencies, and time-to-market velocity.
4. Companies want to be able to repurpose content from a
single source to all of their channels.
The CMS can enable companies to do this easily by separat-
ing content and application components from the presenta-
tion layer. The marketer need only follow the rules that ap-
ply to the specific channel. For the mobile channel, you also
need to address presentation technologies that vary per
device, network and operating system.
5. Size does matter!
At a minimum, a CMS should offer templates that ensure proper
component re-sizing, and pre-sized assets to be uploaded and
approved within your workflow before they can be used for a spe-
cific channel.
6. The best CMS user interface is browser-agnostic.
Most content authors and approvers typically work at a standard
Smart and forward-looking
marketers are already leveraging a
new breed of marketing technology
platform to engage the mobile
channel.
workstation, but designers, developers and managers of the mo-
bile channel often work with different kinds of technologies.
7. Customer engagement can vary greatly based on the device
in use, so companies have to plan for the full spectrum of
devices used to browse the mobile Web.
It is essential to capture device specifics such as type of browser,
screen resolution, javascript/cookies enabled, etc., before serv-
ing back the requested content. At the time of the request, the
device/browser identifies itself, allowing the CMS to read its
specifics from a database and render the appropriate device ex-
perience.
8. Publishing models vary depending on the company and its
objectives.
A CMS that renders and publishes static mobile pages seems
good enough if a company needs only a limited mobile strategy,
delivering a finite set of transactions. But considering how quick-
ly the customer experience is changing, will that be enough? Can
your CMS support dynamic or even hybrid publishing scenarios?
Your CMS should build pages dynamically based on login, per-
sonalization and/or referrals, to deliver both a personalized ex-
perience but also one relevant to multiple audiences.
9. The CMS should let users preview the mobile channel con-
tent in a multitude of renderings, typically in a low, medium
and full experience view.
Not only does preview functionality support the content author,
it also has added workflow benefits for content approvers by
showing content rendered specifically for a channel.
10. A mobile site may not be enough.
Marketers may want to allow content to be published and
displayed in an “app,” or to a location from where it can be
packed using the appropriate SDK (Software Development Kit).
Throughout this process, your CMS should track usage by creat-
ing a content audit trail, and deploy updates to all needed loca-
tions.
Knowledge is power. By understanding these top technology
issues, marketers can better deploy powerful functionality to
their mobile marketing channel—archive management/compli-
ancy, login/security, personalization and profiling, among others.
Not only will they effectively enhance the customer experience,
but also deepen engagements, build brand value and increase
the lifetime value of every customer. L
Loyalty Management™ •NOVEMBER 2010 35
 TECHNOLOGY, TRENDS & REWARDS
Loyalty in a
Fickle Age
by Render Dahiya, Arroweye Solutions
O n the surface, there is something inherently
futile about being a loyalty marketer in an era
when consumers are increasingly empowered to
waver. It’s never been easier for them to change
habits, shift allegiances—or to find information
or messages encouraging them to do so.
So what’s someone selling loyalty in a fickle age
to do? The answer, paradoxically, is to embrace
the trend by tailoring your programs toward the
ever-wavering set. You know the type: They want
what they want, when they want it, built to spec
and online.
If you can deliver what they’re asking for,
The one-size-fits-whoever-signs-up card seems increasingly old-
fashioned in an era where consumers can go online and design their
own playlists, shoes and beer.
you’ve got a better chance at connecting with
today’s customer. And many of the world’s sav-
viest marketers are expanding their offerings to
do exactly that. By now, everyone is familiar with
how Apple’s iTunes turned the music industry’s
album model on its head. But did you know that
the online shoe-customizing service Nike intro-
duced in 2006 already does more than $100 mil-
lion in annual revenue? Even brewers are getting
in on the act. Heineken started letting consumers
customize their own beer bottles online last year.
Apple, Nike and Heineken were all moving
to address the needs of these customers, and
loyalty marketers who don’t do the same are
ignoring this trend at their peril. The one-size-
fits-whoever-signs-up card seems increasingly
old-fashioned in an era where consumers can go
online and design their own playlists, shoes and
beer. If customers accustomed to that level of
choice are buying a gift card—or even shopping
for a Visa—do you think they’re going to opt for a
card you designed, or the one they did? Are they
going to respond better to a card that comes in a
generic mailer, or one that comes in a carrier that
is clearly targeted to their interests?
36 Loyalty Management™ • LOYALTY360.ORG
At Arroweye, we’re in the business of enabling our clients
to build a loyal customer base—helping plug the “how” into the
loyalty equation in an innovative way. We’ve had many conver-
sations with program managers whose sole job is to build affin-
ity through their card programs. From their perspective, loyalty
brings increased card usage, client retention and deeper con-
nections. How to get there, well, it’s a customized approach.
Increasingly, program managers are moving to on-demand
card manufacturing technology to help build their prepaid loy-
alty programs. They’re doing so because of the flexibility the
technology affords. In order to be relevant to the individual
customer, businesses need to have the right tools to respond
to market segments in an instant. The digital on-demand “tool-
box,” so to speak, allows card programs to:
•Stand Out in a Crowd – Differentiation is a huge selling
point. Mass production is a thing of the past, as evidenced
by the rise in on-demand. Unique product offerings and
the ability to change designs and dynamically print carriers
help marketers attain a competitive advantage.
•Issue Rewards with Ease and Speed – Simply put, an on-
demand model will help get your cards in the hands of the
end-customer more quickly and allow you to seamlessly
manage the front-end process without the headache.
•Cut Program Costs – Forecasting a card program can be
costly from an inventory perspective if you miss the mark.
Digital on-demand produces the cards you need at the mo-
ment they’re needed.
•Provide a Better Brand Experience – Companies know how
essential it is to send the right message all the way through
to the rewards. Being able to appeal to niche markets and
tie in offers visually through a card and its packaging is a
meaningful tactic to boost brand association.
The possibilities with digital on-demand can be endless. And
the deeper connections established as a result can as well. Loy-
alty is personal, after all, and the marketers who take this to
heart will be the ones standing out in a crowd. L
Loyalty Management™ •NOVEMBER 2010 33
 TECHNOLOGY, TRENDS & REWARDS

Loyalty
Innovation
PRODUCTS,
ADVANCEMENTS,
& TECHNOLOGIES

SocialTwist Square
In today’s competitive market, savvy brands are us- Accept Payments. Everywhere.
ing social media to help boost customer satisfaction
Square, an application that works
and increase customer loyalty.
with a physical reader that enables cash and
SocialTwist, www.socialtwist.com, which enables marketers to turn social media into so- card payments on any device with and audio in-
cial marketing, has helped major brands such as Barnes & Noble and Jamba produce a put jack, including your mobile phone, helps you
highly valuable ROI, cementing relationship ties with customers. SocialTwist harnesses the build your business in real-time. Take payments,
power of referrals—a key driver in consumer purchase decisions—to help marketers con- see how much you’ve made for the day, browse
nect in a measurable way. SocialTwist’s flagship Tell-a-Friend (TAF) suite of services pro- all of your receipts, set up virtual shelves on the
iPad.

SocialTwist relies on the fact that no algorithm can Square is focused on providing the best pay-
ment experience in the world, and that includes
match human filtering, because a friend knows cost. While taking cash is always free and easy,
accepting cards can be confusing and costly.
the interests and purchasing patterns of his other That’s why Square has simple pricing and no hid-
den fees, monthly charges, or contracts. Square
friends. is constantly working with their partners to sim-
plify and lower costs associated with accepting
card payments.
mote highly viral—and trusted—word-of-mouth marketing campaigns online by combining
While the payment abilities add ease and
marketing messages, the power of referrals and the social platforms customers use most,
mobility to business operations, the behind-
from email to the most popular social networks.
the-scenes functionality of Square is practi-
While traditional sharing products are simple URL link pass-alongs more focused on cal and efficient. Your receipts are sent to your
data mining and behavioral targeting ads that capture user preferences and their shared email, and through the application, you can see
data, SocialTwist relies on the fact that no algorithm can match human filtering, because all of them in one simple view. You can browse
a friend knows the interests and purchasing patterns of his or her other friends. TAF lets through photos of every item you bought and
savvy marketers leverage their users’ influence on their friends and spread their product share them with your friends, as well as set up
message while protecting consumer data privacy and maintaining the three-way trust re- “shelves” of your products, complete with names,
lationship between the brand, its users and their referred friends. TAF’s ability to improve prices, pictures and descriptions when you use
click-through to sites, generate new revenue and promote virality is proven and measurable. an iPad. Square automatically builds your own
SocialTwist has serviced over 73,000 publishers and garnered over 4.5 billion impressions. mobile store.

38 Loyalty Management™ • LOYALTY360.ORG

YOUR LOYALTY
STRATEGY ROI
IS .
AND IF IT DOESN’T
IMPROVE, YOUR
CEO WILL .
It’s not a question. It’s a decision. If you want to maximize
the value of customer relationships and the ROI of your loyalty
efforts with certainty, FILL IN THE BLANKS.

1.888.3ACXIOM
www.acxiom.com/customerloyalty
 BEST BUSINESS PRACTICES
Implementing and
Measuring a Customer
Centricity Framework
by Carlos Dunlap, Kobie Marketing
Learn to develop an internal framework dedicated to enhancing the
overall customer experience while increasing customer retention
and sales
Delivering Superior Customer Experiences
Without a framework to create, continuously evolve, and
ensure a unified customer experience, a company’s best inten-
tions in marketing, reward programs, and customer service
can actually have a negative impact. It has been estimated that
poor customer experiences undermine these investments and
cost companies up to $100-billion annually in lost purchases
and defections to the competition.
The key to successfully managing a customer experience
initiative is the deliberate development of a Customer Cen-
tric framework. Customer Centricity has been defined as “An
approach to doing business in which a company focuses on
creating a positive and consistent consumer experience at the
point of sale, through the call center, online and via all com-
munications, including mobile, email and print.
A Customer Centric framework requires connectivity
across every channel of the organization, allowing the consis-
tent delivery of the most appropriate level of service, benefits,
and customer care to each segment of the customer base.
Each channel should have customer collaboration as its prima-
40 Loyalty Management™ • LOYALTY360.ORG
ry focal point. This involves establishing direct accountability
for the customer experience, as well as responsibility for com-
municating the latest innovations, trends, data, and relevant
industry news at constant and expanding levels.
A positive customer experience translates into greater
customer loyalty. Forrester Research, in Customer Experience
Boosts Revenue (June 22, 2009), has shown a high correlation
between customer experience and three key elements of loyal
behavior: willingness to buy more, reluctance to switch, and
likelihood to recommend.
All members of the organization must be committed to de-
livering a superior customer experience. Is your organization
ready to deliver it? Do you want to know where you are and
how far you have to go to be customer centric? You may be
further along the continuum than you realize.
Kobie Marketing has developed the Customer Centricity
Quotient – a tool to help companies identify functional areas
of customer experience excellence and improvement across
Marketing, IT, Analytics, and Strategy. This diagnostic tool is
following. How does your organization rate?
 In order to gauge how your organization scores versus industry benchmarks in each of these areas,
we encourage you to take a short Benchmark Assessment. By scoring your organization on a 1 to 5
bases across these various areas, you will identify areas which may need more concentration and
could be holding back your overall strategies for building a more Customer Centric company.

Assess where 1. Organizational Readiness 3. IT Support

you see your We have executive sponsorship Our IT department is integrated
organization in to ensure commitment from key into our key marketing efforts with
each key area: stakeholders. dedicated staff.
5: Agree Success metrics have been We invest in appropriate hardware,
Completely identified in order to gauge software and resources to support
4: Agree milestone achievements and overall better understanding of our
Somewhat results. customers and delivery of our
3: Neither products/services.
Our departments are aware,
Agree nor trained and tightly aligned to deliver We have access to user-friendly GUI
Disagree a consistent experience in the tools that allow program managers
2: Disagree moments that matter. to efficiently access information.
Somewhat Each employee has a measurable Our company’s IT department
1: Disagree customer experience objective that supplies tools that allow all
Completely is measured and reviewed quarterly customer facing employees to have
(or more frequently). insights into customer value and
past behaviors in the moments that
Enter Category Points: matter.
Please rate your capabilities based on
your performance in each area category
Max 20 points Enter Category Points:
Please rate your capabilities based on
your performance in each area category
Max 20 points

2. Data 4. Analytics Team

Our company has and can access
at least 18 months of transaction
data and can tie behaviors to unique
customers.
We have customer demographic/
profile/lifestyle data that is linked to
individual customers.
Our company has conducted
primary research to measure
customer attitudes and better
understand their needs.
We have customer experience
metrics in place, routinely monitor
progress and periodically enhance
the process.
Enter Category Points:
Please rate your capabilities based on
your performance in each area category
Max 20 points
We have a business intelligence/
analytics department to focus on
customer insights.
Our company uses a standard
process to develop analytical
products to deliver insights and
segmentation.
We track marketing program and
campaign results for ongoing
reporting, success measurement
and enhancements of the overall
customer experience strategy and
the campaigns.
Our marketing, program and
attitudinal data are integrated into
the customer transactional data for
more comprehensive value analyses
and segmentation.
Enter Category Points:
Please rate your capabilities based on
your performance in each area category
Max 20 points

continued on next page »

Loyalty Management™ •NOVEMBER 2010 41

 Implementing and Measuring a Customer Centricity Framework (continued)

5. Marketing/Comunication Team 7.Execution/Fulfillment Readiness

Our company routinely projects Customers have access to live
campaign results and identifies employees within minutes of their
success metrics, prior to request.
implementation. Appropriate application of
Before we initiate customer services/benefits are applied to the
campaigns and programs, we first appropriate segments of customers.
internally communicate program Customer feedback/responses are
and campaign objectives to ensure incorporated into the operational
employee understanding and plan to improve the customer
participation. experience.
Our customer promotions and Consistent delivery of
marketing campaigns are targeted communications/rewards is applied
and personalized. to deliver on the organization’s
We ensure our marketing messages promise.
and offers are consistent across all
channels. Enter Category Points:
Please rate your capabilities based on
your performance in each area category
Enter Category Points: Max 20 points
Please rate your capabilities based on
your performance in each area category
Max 20 points

6. Voice of the Customer

Cumulative
We have a mechanism in place to Score:
consistently obtain feedback from Max score is 140
our customers.
Our company makes a consistent
effort to promote 2-way dialogue in
all campaigns and all channels.
Customer feedback is captured and
incorporated into the marketing
database and customer profiles.
We have a clear understanding of
customer desires and satisfaction.

Enter Category Points:

Please rate your capabilities based on
your performance in each area category
Max 20 points

Category Preparedness Customer Centricity Levels

Excellent 19+ 135+ Culturization - ingrained in corporate culture

Good 16 to 18 110 to 134 Actualization - strong levels of execution
Average 12 to 15 90 to 109 Assimilation - overlaying/testing ideas
Poor 8 to 11 70 - 89 Inquisition - discovering ways to engage customer
Need help <8 < 70 Comprehension - identifying need

42 Loyalty Management™ • LOYALTY360.ORG

Helpful Tips:
If you find yourself in “Poor to Needs Help”
•Tackle the challenge with “Baby Steps.” Setting several easy-to-accomplish goals will help your
organization build the momentum it needs to become more customer centric.
•Take the initiative to organize a cross functional team to better understand the situation.
Remember: It’s not a problem that belongs to any single department, nor will the solution arise
from a single point of view.
•Put your thoughts on paper and present them to management. Make sure you’ve properly
documented the situation, as well as identified potential solutions and associated benefits.
•Talk with Operations and Technology to better understand the touch points, areas of
opportunities and realistic solutions from those on the front line who interact with your customers.

If your score indicates your organization is “average” on the Customer

Centricity continuum, then:
•You are better than many and yet have plenty of opportunity for improvement.
•There is a customer centric foundation within your organization, so you don’t have to start from
the ground floor.
•Usually, the way to improve is through execution. The best strategies fall short due to poor
delivery of the promise to the customers.
•Look at your touch points—e.g. in store, at the register, call center reps and others who directly
impact the customer experience.
•Remember: Your brand is not what you say it is, but instead what your customers believe.

For those of you in the “Good to Excellent” ranges

Life is good…and therefore, business should be as well. However, don’t take your results for
granted:
•Continue to look for areas of improvement and growth. As good as you are, you can always be
better. Note: being better doesn’t necessarily mean throwing more money at the situation. All
decisions should be based on projected financial returns.
•Don’t cut back on your services and benefits. Incremental profits can be derived from efficiency
gains, instead of decreasing benefits. The best way to find those efficiencies is by asking those
who are entrusted with delivering the customer experience—the front line. This should be a
process solution, not a line item reduction on the balance sheet. L

Loyalty Management™ •NOVEMBER 2010 43

 BEST BUSINESS PRACTICES
Customer Data: The Essential
Element of Your Enterprise
Voice of the Customer Program
by Annette Gleneicki, Allegiance
Every company wants to make measuring customer satisfaction and loyalty a top priority. They all talk
about it; most of them do it. But are they doing it right? To help answer that question, this article provides
an overview of just one of the very elements of a successful, enterprise-wide Voice of the Customer (VOC)
program: customer data—both survey and non-survey.
Types of Customer Data
Customer feedback comes in many forms, all of which can
be categorized as either structured or unstructured. Struc-
tured feedback comes from customers who receive a survey
and answer the questions posed within that survey. Examples
of unstructured feedback include customer posts to a blog,
Facebook, Twitter, or elsewhere that your company has not
solicited or prompted.
Structured Feedback
Until recently, structured feedback was the main way that
companies could hear from their customers about their expe-
riences. Sure, customers could write letters or emails or drop
a card in a suggestion box. But let’s be real here. Those were
all just “cosmetic” and “feel good.” Customers knew they had
an outlet, but did companies really care about that feedback,
respond to it, or change processes because of it? Probably not.
What follows is the various types of structured feedback,
including what they are and what their place is in the overall
VOC initiative. We won’t address every possible form of struc-
tured feedback, but we’ll hit the big ones that should be part of
any VOC effort.
Relationship Surveys
Relationship surveys are conducted to get a point-in-
time read on customer satisfaction, loyalty, and engage-
ment and provide high-level perceptions of your company.
These surveys are conducted quarterly, semi-annually, or
annually and contain questions that span the customer ex-
perience with various departments or touchpoints. These
surveys tend to be longer, sometimes 50 questions or
44 Loyalty Management™ • LOYALTY360.ORG
more, although the actual number of questions seen by the
respondent may be much less due to skips and branching
(as a result of questions asked or what’s in the customer
file that can be linked to the survey on the backend).
Relationship surveys complement or supplement trans-
actional surveys; they can often identify areas where you
might require further drilldown through transactional sur-
veys. Relationship surveys can also serve another purpose:
they can help identify issues or preview your customers’
likelihood to renew a contract. For this particular purpose,
the survey is served up once a year.
Competitive Surveys
When designing a VOC initiative, avoid viewing insights
about your company in a vacuum. Having an understand-
ing of your placement in the marketplace relative to your
competitors by identifying your customers’ consideration
sets and competitive perceptions, combined with the mea-
surement of their relationship with you, is quite powerful.
Two different approaches can be taken to collect com-
petitive insights, including: (1) asking your customers to
evaluate competitors they have done business with by
asking a similar, but often limited set of questions they
answered about your company, or (2) conducting a blind
competitive survey among your target audience. The lat-
ter, which is the preferred and more-robust (yet more-ex-
pensive) approach, typically entails renting a list of names
from a list or panel provider, asking respondents to identify
companies they have worked with, and then having them
evaluate their experiences with each of them (or some sub-
set of them).

Transactional Surveys
Transactional surveys are also known as post-event
surveys, a phrase that clearly defines the scope as after
some event or interaction has occurred. The customer is
surveyed about his experience with the company during
that specific interaction. Examples of transactional surveys
along the customer lifecycle include win/loss, purchase
experience, support, training, fulfillment, and churn.
Transactional surveys are, by nature, extremely action-
able and present service-recovery opportunities for which
the organization must be prepared to take advantage. The
feedback received can be used to make both tactical and
strategic improvements.
The surveys are typically brief, perhaps 10-20 questions
if not fewer, and are designed to measure the customer
experience with a particular touchpoint. The surveys only
contain questions that are specific to the transaction in
question and should not veer off into other directions or
bring in other topics.
Brand/Marketing Surveys
Relationship and transactional surveys are meant to fo-
cus on customer satisfaction with the experience. Brand
research and customer satisfaction/experience research
should be a coordinated effort to (a) limit respondent fa-
tigue from the surveying perspective and (b) coordinate
questions, analysis, and follow-up on the backend.
Advisory Board Surveys
In a B2B environment, Customer Advisory Boards (CAB)
typically consist of a small number of executives who rep-
resent the 20% of customers who account for 80% of your
revenues. CABs are a great way to engage your customers,
to show them some love (and get loyalty in return), and to
allow them to help drive the direction of product develop-
ment, customer experience, and more.
Listening Labs
Listening Labs are an effective way to receive input from
customers about their experiences and actions with your
organization throughout the customer lifecycle.
Unstructured Feedback
Unstructured feedback is unsolicited. It comes in many
forms, including social media, online forums and communities,
blogs, “Contact Us” pages, and letters or emails to the com-
pany. Customers want to share their experiences with other
customers and do so in whatever forum is available. This feed-
back is just as valuable as structured feedback.
Understand your
placement in the
marketplace relative
to your competitors
Using the Internet, your customers are free to share prod-
uct reviews and their experiences with you and with anyone
who wants to listen—in a very public format, 24 hours a day.
Blogs, Twitter, Facebook, online forums and communities,
websites, etc. create a lot of data that you need to pull together
and manage in one place. For you, the challenges are to: (a)
find a way to harness all of this data; and then (b) put someone
in charge of analyzing/gleaning insights from it and acting on
it—right alongside of (or in conjunction with) your structured
feedback.
Non-Survey Metrics and Data
Non-survey customer data and metrics are a solid compo-
nent of any VOC initiative, as they tie actual, behavioral data
to the attitudinal data from your structured and unstructured
feedback. Non-survey data may come in the form of variables
such as demographics, purchase information, purchase behav-
ior, etc., included with your customer list (used to send survey
invitations), or they can be financial data, such as profitability,
total revenue, lifetime value, attrition, etc., used to segment
and analyze the data later. Incorporating these data into your
VOC strategy will allow you to get the full picture of individual
customers, target customer segments, or your entire custom-
er population.
Conclusion And Next Steps
There are many inputs to consider for your VOC initiative.
The next step is to consider how to pull them all together, push
them out into the organization, and operationalize, respond to,
and analyze them to improve your business processes and de-
liver a superior customer experience.
Briefly, You’ll Need To:
•Disseminate: Get the data into the hands of the appropriate
department(s).
•Respond: If your customers take the time to post feedback,
someone ought to take the time to respond to them. There’s
an opportunity for service recovery here—don’t miss it—as
well as an opportunity to show that you care—to hundreds of
thousands of people who read that same blog, Tweet, etc.
•Analyze: Mine the data, segment your customers, and identify
areas on which to focus and areas to maintain.
•Operationalize: Once you’ve analyzed the feedback, opera-
tionalize it—act on it, whether that’s a tactical approach or
strategic action planning and process improvements—and in-
corporate it into your daily business processes.
Utilizing a VOC solution you can collect, disseminate, analyze,
and act on your data all in one place. L
Loyalty Management™ •NOVEMBER 2010 45
 BEST BUSINESS PRACTICES
Closing
the 21st
Century
Service
Capability
Gap
by Christoph Goldenstern, Kepner-Tregoe
T he natural affinity of technology service orga-
nizations towards software and technical training as the
predominant solutions to their service challenges leaves
them with a widening gap between customer expecta-
tions and actual service capability.
The changing service landscape
With the ongoing commoditization of products driven
through globalization and the omnipresence of the inter-
net, the pressure is more than ever on the service busi-
ness to come to the rescue. Not only to provide additional
sources for revenue growth and defending sliding product
margins, but as a way to provide a level of differentiation
from other technology providers by establishing an inti-
mate relationship with the customer that goes over and
above the product functionality. This value-added ser-
vice approach has to go beyond the traditional “break-fix”
model of technical product support to provide true cus-
tomer service, i.e. supporting the business of the customer.
Furthermore, Customer Service needs to be able to
support the rapid evolution of converging technologies—
the CEO of Nokia once called this “the clash of IT and
Telecom”. The resulting, steadily increasing complexity
of technology leaves service organizations with a wid-
ening gap between the capability of the technology they
are supporting and service engineers’ understanding of it,
which can no longer be bridged through purely product
training—the speed of technological innovation is simply
too high.
46 Loyalty Management™ • LOYALTY360.ORG
The Service Capability Gap
Automation strategies are failing in a an increasingly
complex world.
With the above market trends, many service orga-
nizations have shifted their focus increasingly towards
customer satisfaction as a key metric and managing the
Total Customer Experience. Yet, most service organiza-
tions’ investments in the last 10 years have been made
into CRM (Client Relationship Management) systems
and self-service tools, trying to automate the customer
service process for mostly efficiency reasons. The result?
According to the American Customer Satisfaction Index,
many organizations have at best stagnated in customer
satisfaction performance while in some industries, like
Personal Computers, customer satisfaction has plum-
meted by an average of 3.8% since 1995. These outcomes
suggest that a change in strategy is required.
While service executives universally agree that cus-
tomer satisfaction is a strategic goal of any service busi-
ness, as it represents a key driver of customer retention,
they often fail to analyze what the major drivers of sat-
isfaction are in their business when it comes to resolv-
ing complex customer issues. KM (Knowledge Manage-
ment) systems and online support tools have helped to
push more support to the web and resolving simple and
known problems faster, but they only go so far in a world
where the complexity of technology is continuously in-
creasing, which in turn drives up the percentage of com-
plex incidents faced by a service organization.
 It’s about the relationship stupid!
Service is about relationships and relationships are
ultimately about human interactions. When looking at
what truly drives customer satisfaction in a business,
we suggest taking a random, “post-mortem” sample of
customer cases and comparing “good cases” (high cus-
tomer satisfaction) with “bad cases” (low customer sat-
isfaction). You will quickly find out that there is a pat-
tern to what behaviors drive a positive versus a negative
customer experience in your business. While quality
and speed of resolution are generally good predictors
of customer satisfaction, the real question is what con-
stitutes quality in the eye of the customer and what is
the perceived speed of resolution, given the nature and
complexity of customer issues they experience.
Setting the context for closing the gap by defining
the Service Strategy
Another contributing factor to the widening Service
Capability Gap is the general lack
of direction and priority setting in
service businesses on how to close Critical Customer
the gap in critical areas of the
business. This often stems from Service is ultimately
a lack of strategic clarity around
the service portfolio that is being delivered through
provided and the missing segmen-
tation of different customer types People as part of a
and their needs.
The three major sources of ser- Process. Problems
vice gaps: Process, People, Perfor-
mance System are solved by people
Critical Customer Service is
ultimately delivered through Peo- and relationships are
ple as part of a Process. Problems
are solved by people and relation- created by people,
ships are created by people, not
software! However, software can not software!
play a critical role as an enabler to
make this process as efficient as
possible by helping to capture, store and retrieve the in-
formation in the way you want your service engineers
to think, engage with customers and create knowledge!
If the design of the software is not modeled after the
service work flow—which it is supposed to enable—ser-
vice engineers will soon find creative ways to minimize
their need to use the system or circumvent it completely
in order to reduce, what they would consider, bureau-
cratic, non-value-added work.
We suggest that service organizations need to focus
on two basic performance outputs:
•Providing a high-quality customer experience
•Providing a consistent customer experience
Both of the above are primarily behavior driven
and therefore require a renewed focus on “the human
service interface”, which is largely driven by service
processes, the skills of service engineers and their per-
formance system.
Processes
Services Processes are about “how work gets done”
in a service business, i.e. how the service is actually be-
ing delivered to customers. The service process design
informs the quality and quantity of the service resourc-
es required in terms of people, tools and the organiza-
tion’s performance environment and links them back
with the service strategy and its performance goals.
Without effective service process management, invest-
ments into people and software happen in a vacuum
and without a clear link to the strategic goals of the ser-
vice business.
People
Two major factors will further widen the service
capability gap: the speed of innovation and the conver-
gence of technologies.
The underlying complexity of networked hardware
and software cannot be coped with by sheer technical
product training of service engineers. Consequently,
service businesses need to recalibrate their training ef-
forts towards critical thinking skills that are indepen-
dent of the technologies or products in order to bridge
the service capability gap. Service organizations will
only be able to provide a consistent
customer service experience to
their customers if they develop the
ability to partially decouple their
service engineers’ level of service
provision capability from the level
of technical knowledge, i.e. they
need to reduce their dependence on
product knowledge.
Performance System
The reality is that the service in-
dustry has developed an obsession
with measurement. That’s not per
se a bad thing. However, if we mea-
sure the wrong things and make
them part of the service engineers’
performance system, the results can
be disastrous because we are driv-
ing the entirely wrong behaviors.
The Harvard Business study “Goals
Gone Wild” pointed to the negative side-effects of over-
prescribed goal-setting.
We typically find two major shortfalls with mea-
surement systems:
•Too much focus on quantitative vs. qualitative
metrics
•Too much focus on lagging vs. leading indicators
Clearly, the performance system is about more
than just how we measure performance and provide
rewards to service engineers, but is much more about
what we do to actively influence behaviors to align with
the organizational goals.
Where do we go from here?
Reducing the Service Capability gap will require a
new type of thinking, away from blindly investing into
tools and measurement systems towards understand-
ing what truly drives a repeatable, high-quality cus-
tomer service experience and efficiency in how services
are being delivered. If we can get it right, the price to be
won will be worth the effort: customers that not only
are loyal to our business, but that act as willing apostles
for our products and services. It is then that customer
service will become a genuine competitive advantage
and a driver of future revenue and profits. L
Loyalty Management™ •NOVEMBER 2010 47
 BEST BUSINESS PRACTICES

You and What Army?

by Kelly Passey, Access Development

Marshaling the Troops toward Merchant Adoption of

POS Mobile Commerce
Some of the biggest names in next-generation payment technology have been unable to bring about merchant POS retooling—
perhaps the humble coupon can finally spark the revolution.

S Smart Card fought bravely. Contactless Card

launched a full-scale assault. Yet we consumers still are
rung up with 20th century payment technology at almost
every merchant point of sale. If these, the biggest initia-
tives by some of the biggest players in the industry, have
failed to get brick-and-mortar merchants to adopt the
new terminals that promised to bring us into this millen-
nium, is there any hope for m-commerce—passing the
register with a single wave of the handset?
Today, many believe that using mobile phones to pay
for purchases is the new promised land—but the proven
reluctance on behalf of the merchants begs the question:
will you be swiping your cell at checkout anytime soon?
For merchants, it is a simple cost-benefit equation.
The C-Suite folks have yet to be convinced that new point-
of-sale technology will bring new customers, larger pur-
chases, or more frequent visits. If the same people will
continue to make the same purchases regardless of how

48 Loyalty Management™ • LOYALTY360.ORG

they pay, why buy shiny new point of
sale (POS) payment systems? For now,
the risk outweighs the unproven profit
potential. It will take more than indus-
try and consumer anticipation to get
the merchants’ budgetary walls to start
tumbling down.
For those of us anxious to see m-
commerce become a reality, there is
hope in a time-tested, classic strategy
that has been boosting merchant bot-
tom lines for years: the trusty coupon.
This well-worn tactic may be just the
right weapon in this high-tech battle for
the hearts and minds of the merchant
decision makers.
From the humble beginnings of S&H
green stamps over 100 years ago, mer-
chants, retailers, restaurants and all
the rest, have used deals and discounts
to drive consumer engagement at the
POS to generate foot traffic and sales.
Yet, in its digital, mobile form—where
the phone is shown, scanned or waved
at the point of sale— the age-old cou-
pon now has the power to show mer-
chants how a mobile-friendly POS can
effectively drive even higher traffic and
spending levels—a potentially potent
gateway drug into a true m-commerce
world.
It will soon become
very clear that the
mobile phone not
only can serve as
a powerful sales
generation vehicle,
but also a payment
vehicle that can
deliver a stronger
ROI.
Merchants already understand that
consumers want, even expect, a deal or
discount before making a buying deci-
sion. Especially in recent years, they
have seen an increase in the power of
the old-school coupon as usage has
expanded across all income levels. One
recent report documented this substan-
tial increase in coupon use specifically
in higher income households, showing
38% of “super heavy” users and 41% of
“enthusiasts” coming from households
with incomes $70K+ (Nielsen Com-
pany Report).
Incidentally, this also represents
the dominant demographic of heavy
mobile phone enthusiasts—and that
is what many merchants may not yet
fully understand. Yes, consumers love
a deal, but with each passing day those
same consumers are coming to expect
that deal to be delivered to their mobile
handset.
In fact, one study earlier this year
surveyed 4,534 shoppers ages 18-65
in late 2009 and found that a stun-
ning 39% of consumers were willing to
abandon their purchase if they could not
obtain coupons or discounts via their
mobile device—an average lost sale of
$109. Additionally, the study found that
majority of those abandoned purchases
could have been recovered (54% elec-
tronic retailers, 46% retailers/clothiers,
and 42% auto parts/stores) if coupons
or discounts were more readily avail-
able, both for brick-and-mortar and
online retailers. (Source: Motorola with
e-Rewards and TNS International, Jan-
uary 2010.)
Not every merchant is behind this
curve. Early adopters include brands
like Kroger and Target, which have both
begun issuing mobile coupons that can
be downloaded and scanned against
purchases at their store. Overseas,
where mobile payment platforms are
more fully evolved, McDonald’s is test-
ing the ability to download a coupon
and then wave the phone over a reader
at the register to receive a discounted
price. JCPenney has begun testing a
similar program using a special Mo-
torola image scanner. And, traditional
mobile banking companies like Qual-
comm’s Firethorn are teasing it up a
new mobile product called SWAGG
that partners with many national and
local merchants. While many other
merchants and restaurants have simply
chosen to honor patrons who wish to
hold up their smart phone at the regis-
ter rather than print out that coupon at
home from the website or email inbox.
A ‘Show Your Phone’ solution similar to
the ‘Show your Card’ discount card uti-
lized by AAA and others.
As more merchants venture into
testing, the results are starting to make
the case. IHOP recently began to see
higher response rates from mobile
couponing and SMS text-based offers.
Shakey’s Pizza has reported better than
10% redemption rates with mobile cou-
poning—and the evidence continues to
pour in.
Armed only with what we know to-
day, retailers can make a strong busi-
ness case to invest in the terminals and
readers necessary to support m-com-
merce. It seems evident that this new
channel can better tap into the needs
of on-the-go customers, bridging the
gap with more usage and engagement
at the point of sale. We already know
coupons effectively deliver more new,
frequent, and larger purchases. Now,
merchants have an unprecedented op-
portunity to merge this proven sales
incentive with the ease-of-use and
ubiquitous nature of the mobile device
to bring even greater returns.
Still we wait—the merchant is in
control. When it comes to making
costly infrastructure upgrades, buzz
and technophilia won’t make the case—
only actual spending patterns driven by
less-costly mobile-based campaigns
will. However, if mobile couponing has
increasing success, more viable tests
are conducted and results are care-
fully tallied, we could have a winning
catalyst to help us towards the future of
on-the-go transactions. It will soon be-
come very clear that the mobile phone
not only can serve as a powerful sales
generation vehicle, but also a payment
vehicle that can deliver a stronger ROI.
The original idea of a ‘smart card’
with the micro-processor/chip that
could help you manage all of your ac-
counts has been swallowed up in the
multi-faceted wonder of the ever-
smarter mobile phone. But the winning
technology that may lead us to true
m-commerce victory may very well be
found in a very low-tech solution—the
humble coupon. L
Loyalty Management™ •NOVEMBER 2010 49
 BEST BUSINESS PRACTICES

Loyal Insurance
Customers:
An Untapped Market
by Sandra Zoratti & Lee Gallagher, InfoPrint Solutions

Customer loyalty is irrefutable proof that a company listens

to its customers and works hard to satisfy them. According to
a recent CMO Council survey report sponsored by InfoPrint
Solutions Company, “What’s Critical in the Insurance Verti-
cal,” more than 60 percent of insurance consumers polled are
happy with their providers. They value the ease and reli-
ability of the working relationship, yet they report concerns
related to policy language, billing and service. Customers
want to learn more about the products and services of their
providers, yet they, like many consumers, are shopping and
comparing costs.

50 Loyalty Management™ • LOYALTY360.ORG

T he insurance industry clearly benefits from its
loyal customers—55 percent purchased policies
more than five years ago. But how are insurance
companies responding to customer concerns, eco-
nomic pressures and the need to increase revenue?
A majority of survey respondents are devoting
marketing resources to the acquisition of new cus-
tomers. Only 14 percent expect to focus on reten-
tion, advocacy and loyalty development with cur-
rent customers.
Acquiring new customers takes time, and high
acquisition costs can take a big bite out of market-
ing budgets. The alternative—to more fully engage
loyal customers—represents a substantial opportu-
nity for insurance company marketers to capture
incremental revenue fairly quickly.
Engagement thrives on relevant communica-
tions that are designed to inform, cross sell and up
sell. Consumers are overwhelmed with irrelevant
information, and many want to simplify their lives.
Engagement thrives on relevant communications that are designed
to inform, cross sell and up sell. Consumers are overwhelmed with
irrelevant information, and many want to simplify their lives. By providing
meaningful information, insurance companies can satisfy this desire and
deepen the relationship.
By providing meaningful information, insurance
companies can satisfy this desire and deepen the
relationship.
Precision marketing—a data-driven system for
designing and delivering personalized, relevant
messaging—enables marketers to achieve ROI that
is far more cost effective compared to the expense
of acquiring new customers. And the good news is
that the data needed for precision marketing al-
ready exists.
The steps of precision marketing are:
•Define objectives or what business issue or op-
portunity needs to be solved
•Collect data on what your customers spending
in your portfolio
•Analyze it and look for behavioral patterns
•Send relevant communications. Test by starting
test cells and measure if the expected behavior
converted to the product promoted.
•Adjust campaign tactics, repeat to a larger test
cells
Many insurance companies are fortunate
enough to have data about their customers that
has been collected over several years. This data
can yield important insights, and marketers can
apply analytics and algorithms to extract the data
and use it. Yet only two percent of marketers in the
survey reported increasing investment in data ana-
lytics to better segment and target key customers.
Let’s say an objective is to cross sell or up sell
your anchor products, for example, auto insurance
for children of existing customers who reach driv-
ing age. The customers who match specific criteria
receive information about a relevant auto product
such as decreased premiums based on their chil-
dren’s academic performance. When the infor-
mation arrives at the right time in a personalized
manner, response rates can be impressive—some-
times reaching double to triple digits. This allows
the conversation approach to nurture customer
trust and loyalty and remove the relationship from
transactional mode.
Loyal insurance customers, who frequently do
not hear from their providers until renewal time,
are an untapped market. Precision marketing is
a winning strategy for consumers and insurance
companies. It makes customers feel known and
valued and gives them information and choices
that are timely and relevant. It enables marketers
to easily analyze results, calculate ROI and fine
tune communications based on clear metrics—all
of which can improve business in a challenging
marketplace.
Download the “What’s Critical in the Insur-
ance Vertical” report from http://www.precision-
promotion.org/ or www.loyalty360.org/white_pa-
pers to review the survey results and key findings. L
Loyalty Management™ •NOVEMBER 2010 51
 BEST BUSINESS PRACTICES

What We’re Hearing

Loyalty Management’s review of relevant
conferences in the marketplace
by Mark Johnson, Loyalty 360

2010 ATM, Debit, and Prepaid Conference

October 3-5, Phoenix, AZ

After attending the 2010 ATM, Debit and Prepaid retention and when this group begins to redeem, it creates a
conference, I realized again that this economy (and new level of “stickiness“ for the bank, as well as an increase
the banking industry in particular) is in a unique state in the number of products an individual or business will have
of transition that has led to the increased interest and with the bank.
inclination of the attendees to achieve a more detailed and There was also talk of debit rewards. According to Jonathan
comprehensive understanding of loyalty and engagement Silver, President and CEO of Affinity Solutions, “The future of
best practices. debit rewards is going to change. The whole
This understanding is sought through loyalty model is going to be dynamic and
best practices, actionable insight and case
The need for changing rapidly over the next couple of years.”
studies that can impact ROI and create engaging, relevant He sees a much more integrated model for
“sustainable behavioral change.” The loyalty that will function across industries.
continued need for this knowledge is part of
and timely rewards As Silver pointed out, “Merchant funded was
a concerted effort from financial institutionsthat create loyalty traditionally a bolt on. 1 plus 1 equals three.
The coalition model is coming around, but the
to achieve a better understanding of their
customers given the fluid and dynamic state
and engagement is key is creating a currency that works.”
of the market. The market we live in is filledthe goal of today’s There is going to be a change in the debit
with an ever expanding set of traditional programs. card programs, yet the consensus is that the
demise of the debit card loyalty program is
marketing channels and external market and
governmental forces that have caused banks greatly exaggerated. Cynthia Smith of Zion’s
and other financial institutions to adapt to Bank mentioned that some of their customers
and try to comprehend this new landscape get $2,000 dollars back a year from their
in order to make sure they retain and better understand programs, yet there is a push to simplify rewards and to make
their customers. them more targeted, relevant and engaging. She suggested
Attendees learned there has been a shift in the way banks should not look for short-term profitability on their
people are paying for products. We have seen the increase programs, but rather on the long-term engagement, detailed
in the use of cash and debit products, and have witnessed understanding and profitability of the client.
the consumer saving rate inch up to 6-7%, which had been I continued to hear from the conference that consumers
around 0% for the better part of 15 years. PNC, a leader in want to be rewarded. The need for engaging, relevant and
the bank-based loyalty business, has witnessed significant timely rewards that create loyalty and engagement—but more
interest in loyalty/rewards programs for both consumers importantly sustainable behavioral change—is the goal of
and their business customers. They have seen better today’s programs and more imperative now than ever.

52 Loyalty Management™ • LOYALTY360.ORG

 I heard time and time again from the vanguard
of the industry that their clients want to
understand, influence and measure the
changes their loyalty programs are creating.
-Mark Johnson, about The Motivation Show

The Motivation Show

October 12-14, Chicago, IL

At the 2010 Motivation
Show, I noticed that this
show is changing along
with the incentive
industry itself. While
the goal of creating behavioral change for employees and
channel partners remains, I spoke with a number of people
who felt that Incentives are now a “four letter word;” that
the old school “trinkets and trash” incentives are being
replaced with more measurable methods of rewards. I heard
time and time again from the vanguard of the industry that
their clients want to understand, influence and measure
the changes their loyalty/reward programs are creating.
I had the opportunity to speak at this year’s Show.
As Loyalty 360 is focused on hearing the “Voice of the
Customer”, the session was structured as interactive
discussion with the audience; the goal being to get a sense
from them of where the market is, where is it going, what
the financials are looking like for them, what they felt the
challenges were and how should one solve them? As
always, I was (am) looking for market-driven insight.
What I can tell you is that there is as much confusion
in this market as in any other. I was surprised how open
and candid the individuals in my session were. They spoke
of meetings with HR representatives that now would have
operational and financial representatives in their sales/
process meetings with an inclination to push the vendor
for a more thorough understanding of how their spend
can be more effectively targeted to increase the efficacy
of these internal programs; to drive behavior. I asked the
audience: “Does a bike in a catalog impact behavior?” Most
responded either “no” or “don’t know”—but indicated that
this is the same type of question they were being asked
by their clients. When I raised the issue of what does drive
behavior, and many responded that the answer to this exact
question is the Holy Grail that they were looking for.
I also asked my audience where they thought the market
was going, and I received both ambiguous and uncertain
responses. Some felt that employers/clients were beginning
to loosen up their purse strings, but doing so very cautiously.
Others believed that employers could be divided into the
proactive (reward focused), active (looking for solutions)
and inactive (you should feel lucky to have a job) categories.
Yet, while more companies over the past two years were in
the inactive category, we were seeing more interest—not
necessarily spend, but interest—in moving to the other
categories.
Behavior is a complex idea. The focus on the neuroscience,
behavioral psychology and attribution theory are areas of
increased interest, but the complexities involved with them
are leading to a new paradigm in the marketing world. We
saw that the Motivation Show dedicated a one-day pre-
conference workshop to the ROI of engagement. I found
this unique in that not only are we trying to give a new
connotative and denotative meaning to engagement, but we
are now fixated with the ROI component. I think this is the
direction we will see the Motivation Show continue to move
towards. The case study approach they are bringing to the
show is very much welcomed by Loyalty 360 and Loyalty
Management because we believe—and what we’re hearing
from our members—these are the areas of interest to the
market. Without them the old school view of incentives may
be in trouble.

Loyalty Management™ •NOVEMBER 2010 53

 BEST BUSINESS PRACTICES

loyalty program profile

Best Buy Reward Zone

The website also features
community forums where you
can ask questions from other
members and chat on forums
about music, movies, games—
whatever your interest.
THE VERDICT
A re you ready for some football? The leaves are starting to fall
and the air is crisp and cool. Autumn is here, and for many, there’s
nothing better than rounding up your friends to eat, drink, and be
merry while your favorite team battles it out on the field. But what
to do when your tv just doesn’t cut it anymore? Time to upgrade to a
flatscreen and watch the weekend’s games in style. And who better
to help than Best Buy.
Best Buy’s Reward Zone is free to join and takes just minutes
in-store at checkout and online, where you create your profile and
customize the program to your liking. Once you join, you earn one
point for every dollar you spend and are able to redeem points for
$5 reward certificates after you earn 250 points. Depending on your
preferences, you can increase the limit to 500 ($10) or 1000 points
($20). But make sure you redeem your points and certificates quickly!
They do expire. For members wanting to earn rewards quicker, you
can sign up for the Reward Zone Mastercard. This enables members
to earn double the rewards—two points for every dollar.
Membership also gets members access to Reward Zone Partners
that can earn significant points. With our new home theater, Netflix
was the perfect option! Members can join for 500 points rewards and
earn an additional 100 per month for the first six months. Getting re-
wards to watch my favorite movies and tv shows? Yes please! Reward
Zone Members can also shop the online mall, which not only offers
rewards points on purchases, but also offers exclusive member dis-
counts. You can find anything from books to clothes for the family to
that new lamp you need in your living room—even deals on your next
vacation!
In-store, it was easy to start earning. The sales staff was friendly
and knowledgeable, helping us pick out the perfect tv and reminding
us to take advantage of the Geek Squad who could come help us set
up the tv and mount it in its place of honor just in time for kickoff.
Online shopping was just as easy. The website features articles and
reviews from technology experts at CNet and allows you to instant-
ly compare items the way a sales associate could in the store. The
website also features community forums where you can ask ques-
tions from other members and chat on forums about music, movies,
games—whatever your interest.
With my home theater all set up and ready for the big games and
cozy movie nights, fall just got much more exciting. And who knows,
with all my Reward Zone certificates rolling in, winter might be a good
time to sharpen my photography skills or get that new laptop. Hint,
hint Santa! L

Two Thumbs Up!

Two thumbs up! Despite the points’ expiration dates, the program is quick and easy to use and with the
diverse product offerings both in-store, and through the online Reward Zone mall, you can always find a
way to earn rewards.

54 Loyalty Management™ • LOYALTY360.ORG

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interested in speaking or exhibiting?
contact Erin Raese:
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