Tuesday 29 December 2009

2010 Loyalty Marketing Predictions

janus Technology moves ever quicker with a new set of doors opening at an increasing pace.

It would make sense then as we enter January - named after Janus, the Roman god of gates and doors - to look forward to the new year and consider the possible trends which might make it into our marketing programmes.

There is a theme in these predictions (which wasn’t intentional) and it all ties to this first one…

#1 - A stitch in time…

The web is moving real-time. As more and more people get immersed in social networks like Twitter and Facebook they are getting used to information having a best before date. Witness the latest deals that both Google and Bing have done to bring real time search to the masses. Now typing in “snow UK” in Google brings up results which are actually useful – a weather report (and twitter reports from seconds ago) of the current snow conditions.

What does this mean for marketing programmes? Well it means that monthly emails or quarterly newsletters are going to be perceived as quaint at best. In 2010 you’ll need to make sure you have something to say and say it fast. Better still get someone else to say it for you…

#2 – Many hands make [profitable] work

Loyalty programmes still see individuals when in fact individuals actually see groups. Whether that group is you and your partner or your family, your friends or co-workers, we are all part of many different groups which we interact with in different ways.

Opening up the programmes to allow interaction within these groups will provide additional word of mouth opportunities as well as increased loyalty. Indeed, a recent white paper by Colloquy entitled The New Champion Customers found that heavy users of loyalty programmes are over 50% more likely to be word of mouth champions (meaning they are both willing and able to recommend).

What was also interesting from the research was that 2 of the top 5 reasons for WOM participation were “to be first” and “to share my opinion” – both of which become more empowered by real-time communications – whether this is the brand sharing the latest information with the member or the member sharing it with friends.

Expect to see this utilised more in programmes in 2010 as brands truly look to unlock the social value within their loyalty membership.

#3 – What goes around, comes around

I find it interesting that everyone is now talking about real-time information and the “push” based services to deliver them. I’ve been around a while so I remember back in the heady days of the “information super high-way” companies like PointCast were going to deliver this dream – but then ultimately failed due to the technology of the time not being quite as good as the idea.

The same was true of net computers (NCs). Essentially a device for doing not much more than browsing – they were much feted when the idea was first announced by Oracle CEO Larry Ellison back in 1995 – only to disappear in 2000 and then reappear as the popular gadget of 2009 in the form of the Net Book. We’re likely to see further interest in these in 2010 with the (possible) launch of the much hyped Apple Tablet.

From a marketers perspective you could say the same thing about 1 to 1 marketing. Much hyped when it was first published back in 1993, both technology and available data didn’t really allow it to be fully supported. This has changed though and personalised one to one communications are possible – not just in terms of content but also delivery channel and frequency with providers like Silverpop gaining increasing accolades.

Might be time to take the book back off the shelf - expect to see more programmes bringing this onboard in 2010.

#4 – It’s the taking part that counts

I’ve blogged about it for most of this year and was writing about it back in 2006 - but interaction is the new transaction in loyalty. Wrapping it up under “Engagement” with the 4i’s of involvement, interaction, intimacy and influence – Forrester consider this the new Marketing Metric. As they say in their white paper:-

“Companies also need to track individuals who influence
others to buy. For example, a customer who buys very little from you but always rates and reviews what she buys can be just as valuable as someone who buys a lot — her reviews might influence 100 other people to buy your product. Tracking only transactions and loyalty at the end of the funnel misses this significant element of influence”.

I know this is only going to get bigger in 2010 and don’t be surprised to see reward programmes giving out points and miles just for the taking part.

#5 – Bird in the hand is worth two in the bush

In loyalty marketing it is well known that redeemers are the most active, loyal and generally profitable customers – so getting people to redeem is always key.

Digital redemptions can really help in this respect as an e-voucher for example can be despatched immediately, letting points in an account be translated into a reward in their hand within seconds. More and more merchants are beginning to see the value of these with many allowing e-voucher codes to be used both on and offline.

These are popular reward items not only because of the immediacy of them but also because of the cost effective fulfilment – no postage, no handling, no security storage. Loyalty programmes are clamouring for these and in 2010 I bet more merchants will be clamouring to provide them.

Agree, disagree – if you want to add more feel free to comment.

Ghost of Christmas Past… To see what I thought would be happening in 2009 – and whether I got any of them right, check out last years post.

Saturday 19 December 2009

‘Twas The Week Before Christmas

‘Twas the week before Christmas and the shelves were stocked high
With customers browsing and looking to buy
Tills ringing loudly with the sounds of each item
Staff smiling sweetly as they scan, charge and pack them

Customers searching for the latest new gadget
For some it’s a present for others a self gift
Filling their baskets with all that they sell
This holiday season is really going well

More customers coming at this holiday time
Than the retailer sees across months one to nine
But who are these customers, have I seen them before
The retailer wonders as they leave through the door

Wouldn’t it be great if I could know what they bought?
And send them some follow-up now there’s a good thought
We could tell them what works well with the item they’ve got
Encourage them to think of us when next they might shop

We’d know if this was their first little peak
Or whether the customer was in every week
If only we’d setup that loyalty scheme
We’d have all this data and more in-between

Having a programme would give us their details
We’d be able to tell them about our great sales
Alas, we don’t have one so we have no idea
We may as well just speak to Santa’s reindeer

But St Nicholas will know them, he stops by their house
Delivering presents as quiet as a mouse
So Santa we beg you when next coming to visit
For their names and addresses leave your naughty and nice list

Merry Christmas!


Saturday 12 December 2009

The element of surprise

wetfloor-fish2I know winter has arrived - it has finally changed from warm rain to cold rain – and in the last few weeks we’ve had a good drenching. 

This brought the inevitable wet floor underfoot and to my amusement there was a sign in my office saying “Wet Floor”. 

Apart from the fact that I’m obviously easily amused, the reason this entertained me was because the sign is there almost every day, and this was the first time I've actually seen the floor wet.

The problem is, the more the sign is used, or any communication for that matter - especially where it shouldn’t be used – the more people tune out of it and begin to ignore it. 

It fails to get cut through.

Whether the communication is for health and safety or customer loyalty it should have the same purpose - to change behaviour.

  • If your predominant form of loyalty communication is a points statement, showing points earned, redeemed and a closing balance
  • If your statement is sent every month or every quarter
  • If your statement is sent with un-targeted inserts or statement messages

Guess what – it’s going to fail to get cut through.

You need to shake thinks up a little and surprise people.

Saturday 5 December 2009

ASDA - Loyalty rejecters?

asda-350ASDA CEO Andy Bond reportedly said just a few weeks ago

"You can't buy loyalty with plastic points"

Going on to say about Tesco Clubcard “They're based on conditional selling and only reward people that spend the most. At ASDA we reward customers with the lowest-possible prices everyday. That's why more people than ever are choosing to shop at ASDA.”

On the first point he’s dead right, you can’t buy loyalty – plastic points or otherwise – you have to earn it.

On the second point I think he’s dead wrong and here’s why.

“Conditional Selling” – Unlike many US style grocery programmes which do actually have conditional selling - giving one price for card holders and one for none card holders - there is no tiering in the Clubcard model.  Everyone is equally rewarded and your reward is simply based on overall spend; assuming of course you join the programme

Obviously you have to spend enough to reach a minimum threshold for reward, but for a normal loyal customer this is not difficult.  In fact it is less about rewarding high spending customers and more about rewarding loyal customers – those who shop with you regularly.

“Lowest Possible Prices” – To fight on price you really have to be the cheapest.  I decided to try out ASDA by doing a monthly shop on ASDA online for exactly the same products (substituting where required) as my normal shop at Tesco.  At the end of it there was a few pence in it so hardly worth jumping up and down about – and I get Clubcard points at Tesco.

Maybe I’m not a typical ASDA customers and I’m also not a Tesco sycophant.  However I do believe that for a retailer like ASDA, understanding your customers is key – and interestingly so do ASDA to a point.

Reportedly gathering information from a pool of 18,000 shoppers that will be used to influence which products it sells and to drive the business around common themes that emerge – they are doing their level best to gain an understanding of their customers.

Whilst this may provide insight akin to what Tesco gets from Clubcard data, it will not allow for a feedback loop which would enable them to go back to individual customers to recognise, reward and influence. 

So are ASDA loyalty rejecters?

Well lowest prices do not reward or recognise customer loyalty – I get that price if it’s the first time I’ve shopped there or the 51st time.  What they will do however is maintain customer loyalty for that segment of customers who are price/promotionally sensitive – but only for as long as you have the best price.

However ASDA do have another trick up their sleeve and that’s transparency.  Andy states “My ambition for Asda is to actively involve customers in every aspect of the business, to lift the lid on how we do things, and enable our customers to help make decisions that have an impact on what we sell and how we sell it.”

It’s obviously early days for this initiative and whilst I’ve banged the drum for a while about it being less about the transaction and more about the interaction it remains to be seen how many customers will actually want to “lift the lid”.

Ultimately a good loyalty programme will allow you to have a two way dialogue with a customer about topics which are relevant and create a win-win for the customer and the retailer – in this respect ASDA are making positive moves with a non-points based mechanic.

Far from being loyalty rejecters I think ASDA are doing their best to embrace loyalty and to generate genuine customer engagement – the jury however is still out on how and whether this will actually work.