Saturday 28 August 2010

Loyalty Marketing - it's all a game. So play it.

Ted Turner famously said "Life is a game. Money is how we keep score."

How well you play it depends on understanding the rules and Albert Einstein said "You have to learn the rules of the game. And then you have to play better than anyone else."

In marketing it would be true to say "Loyalty is a game. Points are how we keep score."

Points are accumulated - the more points the better the prize. Points don't just mean prizes though, points can earn tiers and these open up additional benefits.

If a loyalty programme was a video game, then tiers would be like a new level - letting you unlock secret rooms like the "airport lounge" or giving you a new weapon such as "priority queuing". The monthly statement would be your end of level score sheet - letting you know how well you did by showing you your current and cumulative score, and on the better programmes, highlighting which puzzles you unlocked in the form of promotions achieved.

However, if loyalty was a game then in the words of Seth Priebatsch from SCVNGER - it would suck.

Seth makes a really interesting and inspirational speech at TEDtalks when he describes building the game layer on the real world - and how loyalty programmes are the forerunners to this.

What really interests me about this as a loyalty marketer is that we've been doing this for a long time - we just haven't recognised it as an industry - and haven't maximised it's benefits.

If you played a video game though which had no real direction, only recognised you when you happened to stumble upon something, had little or no challenges, took 12 months to get to the next level and 18 months before you got a reward - few but the most die-hards would play it.

Yet this is what many loyalty programmes are like.

For example, we know who's playing well. We have people tiered based on their frequency, value and recency. We have them segmented based on the products they buy, the promotions they use, the web pages they visit.

We know everything - and yet we hide it.

Foursquare on the other hand knows when I've visited a venue with a photo-booth 3 times and shouts about it, giving me a reward for it in the form of a badge. It knows if I'm out late, shopping locally or shopping with friends - and rewards me for it. It's a game for me and better still a competition with friends - creating social currency and influence - even if it's just a bit of fun.

When it comes to tiering, we make it very hard for a very small number of people to make it to each tier. This is for good reason as the benefits opened up at each tier cost a lot to fulfil.

However, if you take the monetary value out of a reward/benefit and replace this with social value, then you can emulate games like FarmVille and Mafia Wars which are engaging and influencing over 80m people with 40+ tiers/levels - something I wrote about previously saying:-

[They] create a really well designed journey which drives early engagement, rewards interaction, encourages peer comparison and recognises increased experience.

Adding a gaming layer to loyalty - or at least making the existing game play better - is probably the most important change to loyalty marketing since it moved from paper stamps to computerised points.

This is great for consumers, great for brands and great for loyalty.

Lets play.

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Sunday 22 August 2010

Digital Channels - The Hidden Dimension

We've all met someone who is over-familiar. Someone who just gets a little too close.

That feeling of uncomfortableness that arises is normally because they've invaded our personal space. However this raises the question, what is personal space?

Back in 1966, Edward T Hall wrote a book entitled The Hidden Dimension where he discussed the concept of personal space. Defined as:-

The region surrounding a person which they regard as psychologically theirs. Invasion of personal space often leads to discomfort, anger, or anxiety on the part of the victim.

The measurement of this space and the distances between people as they interact is known as proxemics. In a physical sense we all understand the concept of personal space, and whilst peoples tolerance levels in terms of distance vary, they can be broken down into 4 main zones which are:-

  • Intimate Space - For embracing, touching or whispering (= < 15cm)
  • Personal Space - For interactions among good friends or family members (46 to 76 cm)
  • Social Space - For interactions among acquaintances (1.2m to 2.1m)
  • Public Space - For interactions such as public speaking (3.7m to 7.6m)

In essence, the closeness of these interactions are based on the closeness of the relationship we have with the individual.

This is something we all understand in everyday life, but what happens when offline interactions move online and when interactions are not person-to-person but are instead person-to-brand.

It was recently reported that just under half (46%) of shoppers now feel they are "bombarded with irrelevant information and offers via a dizzying array of touchpoints." - so something obviously isn't working well.

Just because a brand has a customers contact details doesn't necessarily mean it has permission to talk to them across every channel. Not all channels are equal and some are considered more personal than others.

If a salesperson repeatedly invaded a customer's personal space, making them feel uncomfortable and causing them to walk away, you can bet they wouldn't be employed for very long.

Ok, not a great example as that's exactly what many salespeople do to try and cross that boundary from acquaintance to friend; from untrusted to trusted. However, brands risk customers switching off by doing similar things within digital channels.

In proxemics terms, my letter box is considered public - I expect mass marketing messages to be posted to it and re-act accordingly; which is probably why response rates are so low. My mobile phone however is far more personal and not a channel I'd welcome un-solicited messages on.

As an example, this is how I'd categorise interactions across the various digital channels in terms of proxemics.

  • Intimate Space = Telephone/Mobile Phone/SMS/IM
  • Personal Space = Facebook, Foursquare
  • Social Space = Email, Twitter
  • Public Space = Direct Mail

However these categorisations can also be affected by the relevance of the interaction.

Mobile can be a great channel when the message is very relevant and personal - almost when it could be a whisper in your ear. When Premiere Inn sent me a text message reminding me of my hotel booking and asking if I wanted SatNav directions (which I did), then this worked very well. It was like a friend quietly asking if I knew where I was going.

When my bank rings me up though on the pretense of a customer care call, loosely covering a sales call, then this isn't welcome as I consider this channel far too personal for that type of interaction. This is akin to the salesperson trying to establish trust and cross that boundary.

When I post my thoughts to Twitter - just because they are essentially public does not mean the channel is. I want friends on Twitter that have something relevant, entertaining, informative or witty to say - not a brand advertisement.

With the increasing growth of location based services including the new Facebook Places, this will add another level of complexity. Commentators are already discussing the potential of this channel for advertising revenue with the Telegraph recently saying:-

The business idea behind such applications is that all these individual check-ins can be used to drive advertising. [Adverts] can be targeted more specifically because a user's spending habits are known.

However, knowing this information is one thing, knowing how and when to use it is something else altogether.

Can a brand talk to me when it knows I'm in the area, but not in their store?

Do I expect it to talk to me when I check in at the store specifically?

Will it increasingly be a faux pas if a brand doesn't recognise me when I tell them I'm in-store - almost like refusing a handshake?

With the explosion of digital channels available to talk to customers on I think the principles of proxemics are more relevant than ever. Marketing messages should be looked at not just in terms of what channel do we have available but also in terms of what is the tone of the message and what is the relationship with the recipient.

The classic CRM mantra of Right Message, Right Channel, Right Time could be added to through the application of proxemics with Right Relationship.

Sunday 8 August 2010

Flipboard - Reinventing the advertorial

Imagine a magazine or newspaper which has articles you're really interested in. Whether it's the latest industry news - in your industry - or the latest news from your friends and family. Combine this with the best media content you like - don't want sport, remove it. Now make this near real-time, in a glossy, tactile, user friendly format.

This is Flipboard. The much hyped - and in my opinion deserving - new application for the iPad.

Building articles based on your social network content including Twitter and facebook, Flipboard presents a highly personalised and relevant experience. With the content you read being based on your network, it means that those who's opinions you trust, value or enjoy are literally building and collating the content for you.

More importantly though it provides a whole new way of interacting with social media. Using Flipboard makes traditional Twitter streams look more akin to reading news on Ceefax.

It obviously doesn't replace Twitter for two way interaction or posting of thoughts, but does provide a fantastic way to consume the information that flows by.

In a recent article Flipboard co-founder Evan Doll said:-
"With the information overload, people are doing more sharing and it is more difficult for the signal to get through the noise"
Although it is currently free and revenue streams are yet to be realised, it is clear that this will be revenue generating. CEO and co-founder Mike McCue says:-
"We think we can bring a totally new form of advertising to the table that will allow publishers to monetize their content by a factor of ten from what they’re currently doing with banner ads".
However, for brands there would appear to be two opportunities. The first is to use standard advertising, much as they would do within traditional media - although given McCue's comments I'd expect this to be a lot more intelligent and relevant.

The second though is really about leveraging the power of social media.

If you create content and opportunities which get people talking about your brand, linking to your brand and sharing your brand within their social networks this will translate into articles in Flipboard.

Essentially a modern day advertorial - except without the cost and with more credibility.

With server capacity reportedly reached within 20 minutes of launch, over 130 media companies contacting them within 4 days and riding on the back of the iPad which is breaking all sales records, it's clear that Flipboard is both the one to watch and the one to get watched by.