New Frontier:Unhosted Loyalty - Less big data, more my data

There's an intriguing new application available called Forever.

From a functional perspective it's not ground breaking - it simply provides address book functionality.  What is interesting however is that it does this without actually holding any data.

Of course it manages personal data - it has to so it can bring up a friends address details - but it doesn't persist it.  It keeps your address book in sync and up to date -  but it doesn't change anything.

Forever is a new breed of application known as an unhosted app and this has been defined by unhosted.org as:-

"Also known as "serverless", "client-side", or "static" web apps, unhosted web apps do not send your user data to their server. Either you connect your own server at runtime, or your data stays within the browser"

The application provides a service and works upon your own data, but it never actually "owns" the data.  Instead, you connect your own data store, such as that provided by a personal cloud, which the application can then work with.

In a world where everyone is talking about big data, this really is a breath of fresh air.

Rather than gathering data in bigger and bigger corporate repositories, the data is essentially always owned by the the customer.  Sure, it's probably still going to be hosted by a 3rd party for most people - the average consumer is not going to want to spin up their own homebrew hosting solution.
However, these 3rd party personal cloud suppliers are more akin to the 4th party concept spoken about within VRM - they work for the consumer.

Now, I'm a marketing technologist at heart, so I like customer data because I want to be able to market relevant products and services to that customer - and to be relevant, I need to know something about them - I need their data. However, I don't think that the 4th party personal cloud as utilised by the unhosted app concept precludes this from happening.

We just need to think differently.

If the data belongs to the customer, then we essentially need permission from the customer to access it.  This permission will be granted if the customer sees a worthwhile value exchange for their data and also feels in control of it.  They can grant access and they can revoke it - which side of the fence we're on will depend on what we provide back.

In reality though, as corporates, we don't need huge repositories of personal data despite our quest to build them.

Increasingly the battle field for relevant communications is real-time.  As I spoke about in my last post, technologies like Complex Event Processing and other solutions like collaborative filtering (people who bought x also bought y) are executing at the time a customer is carrying out a behaviour - on that behaviour.  At this point of interaction, we're working with the customer and will have access to their personal data and can use this within the application to make decisions.  Of course, we'll also need large amounts of historical data to support recommendations, but this doesn't need to be "a single customers data", it just needs to be aggregates of behaviours.

Imagine this within a loyalty programme context - one of the biggest aggregators and users of consumer behavioural data.

In an "unhosted loyalty app" context, when I swipe my identity card (4th party identity provider), the retailer would send my purchase information about the transaction to my 4th party personal cloud.  At this point, that data is mine to do with as I wish - it's basically an electronic till receipt.

• I could then choose to connect this data to a 3rd party application that analyses my nutritional intake
• I could connect it to the retailers loyalty programme which would then recognise my purchases and update my connected bank provider (cash or points)
• I could connect it to one or more FMCG/CPG manufacturers who could choose to recognise my purchase of their products (or my purchase of their competitors), and respond to me with relevant offers or rewards
• I could simply connect it to my shopping list app to tick off what I'd already purchased

It's my data, I get to choose who I let see it and for how long - but they don't need to hold it, process it, sell it or bombard me using it.

While this may seem like a step back for companies currently designing big data solutions which will increasingly sweep wider and wider customer interactions into larger and larger repositories, it's actually a giant leap forward.  I'm betting that Walmart would love to see detail on the transactions I've made with Costco.  Or Visa would love to see my spend with MasterCard.  Presently this data will never be shared between these competitors.

However, when it's my data, I can choose to share it with whom I like - my supermarket can have access to my credit card spend (and see who else I spend with) if I feel this provides value back to me.

Why though would a retailer simply give this data away in a format I can use electronically?

Well, ignoring the fact that this will likely be mandated soon by governments, it's also a customer retention mechanic.  When my data has value to me, then I'm more likely to frequent a retailer that can actually provide it.

In the last century, I gave my loyalty to a retailer so they could have my data; in this centuary I'll be giving my loyalty to the retailer so I can have my data back.

In my professional role I design and build loyalty solutions for clients including the backend systems to support these - I'm part of the machine that is gathering big data across wider interactions to help engage and retain customers.  I'm positive about this and it's an exciting place to be, both as a marketer and as a consumer.

I also understand however that consumer attitudes are shifting, government approaches are changing and technology is democratising data - looking out 5 to 10 years, I'm betting it's "My Data", not "Big Data" thats going to be the new frontier.

Rallying cry for innovation - and faith

I've spoken about VRM - Vendor Relationship Management before on this blog and it's one of the topics that I feel is currently mis-understood and undervalued in terms of its future impact on customer relationships and loyalty.  Like many new things, people think it irrelevant, unworkable or simply solving a problem that doesn't exist.  It was great then to see today on the ProjectVRM mailing list, Doc Searls, author, journalist, blogger and VRM evangalist, discuss these challenges and to put them into context.

I've repeated the majority of Doc's post here for those without access to the ProjectVRM list:-

[..] Nobody is ever interested in a new category before it is given shape by applications people want once they see them. Personal computing, starting in '76, was positioned as "a way to do your checkbook and keep recipes." Really. None of the early hardware makers were especially successful, with the conditional exception of Apple, thanks to Visicalc. IBM took a look at Visicalc and introduced the PC in '82. But even then the PC succeeded in business in part because Attachmate and other companies sold micro-to-mainframe cards that turned $2500 PCs into $1000 IBM 3270  and DEC VT-100 and -200 "dumb terminals." But by then Visicalc had a foothold, as did Wordstar and DOS. Lotus 123 picked up where Visicalc left off, and a wave of applications followed. The Mac succeeded in part because of Quicken, which really did, finally, eight years after PCs were born, make balancing a checkbook easy. Quicken was an invention that mothered necessity, as were the rest of the early programs. Still, business dismissed PCs from '76 to '82, and ordinary people dismissed them until at least '84.

Likewise the Internet was nowhere until graphical browsers showed up. We forget that Bill Gates saw no way the Net could make money for itself, or anybody, until it was clear that Netscape's browsers and Web servers would threaten Microsoft to the core. That was in '95, when the Net's protocols, which we still use today, were up to decades old. Smartphones were Palm's idea, but not many people took advantage of the apps on them, because they were too hard to get and use. Once Apple showed how it could be done, the market exploded. That was more than a decade after Palm began. I remember an early VRM meeting at Berkman where Paul Trevithick said "Nothing that requires a user install will succeed." That was true, then. But not long after that, Apple made user-install easy, Google followed, and now all of us install apps with ease all the time. Yet it would be easy to say there was no appetite for the Internet in '93, or smartphones in '05. All we needed were inventions to mother necessity.

So, likewise, it's easy to say nobody cares about managing relationships with vendors, because, obviously, they don't. Or, do they?

What about the stacks of loyalty cards people keep on keychains, in their wallets and purses, or in the armrests of their cars? That's a crude form of management. What about clipping and carrying coupons, or spending hours or days adding up "points" from credit cards to trade in for miles on airlines? (I have a friend who is obsessed with doing that.) What about going over stacks of receipts and trying to match them up with credit card bills — arduously reviewing old calendars to see what we did and when, so we can minimize our tax hit? Is there no management in that?

Think of all the pain points any one of us deals with in relating to vendors — or anybody. All those pain points are potential business opportunities. Not all of them will be pursued, but none of them are worth dismissing because nobody seems interested in dealing with them now. As Henry Ford said, "If I'd asked people what they wanted, they'd have said 'faster horses.'" To my Irish grandmother growing up in The Bronx, the biggest problems were horse manure piling up in the streets and the danger of fire from gas light. Neither problems were relieved by the industries of the time. Yet both horse-drawn wagons and gas light were obsoleted by new inventions. 

[..]Everybody manages data today already.

We do it with folders on our hard drives, with bookmarks and tabs in our browsers, with boxes in our mail programs, and with every online service that organizes files for us. Are all these in such a complete and final state that they are un-improvable? Or is there opportunity here for many kinds of new approaches? Again, it's easy to say "nobody is interested." But it's not wise to bet against relieving whatever causes people pain. Or what opens up new opportunity where almost nobody is looking.

[..]

And most of us don't care about advertising. (Though some do, and we respect that.)

Fixing advertising's problems, or pursuing its opportunities, is almost entirely a vendor-side issue. My own attitude toward advertising is kind of like Ford's toward horses and trains: those things will keep doing what they're best for, and we'll go invent something else. My guess is that, if VRM succeeds, it will help brand advertising and hurt adtech or alter it for the better. But VRM's purpose has nothing to do with any of that.

Still, business senses that we are on to something here, so we can't help talking about it, and, in some cases, getting invited to conclaves where advertising is a big issue.

For example, yesterday I attended one of those things here in New York. The word "intention" was used a lot. The context was using "big data" to "intuit" what customers "intend," without ever having to listen to what those customers want to say, directly, to the "brands" doing the advertising. So the talk was about "listening in" on "conversations" among "consumers" in "social spaces" so those consumers could be "delivered" a "better experience." It was the sound of one hand slapping, not two hands clapping. A few voices  from within the business were raised, saying "Are we listening to ourselves? Do we not realize that we're abusing people's privacy, and that this will have consequences?" As usual those voices were mostly not heard. But the wilderness from which those voices were raised is called the marketplace. 

Are those voices pointing toward actual requirements, as you suggest? Well, let's look at what the market is already doing.

Today the most popular browser extensions are ones that block advertising and turn off tracking. Governments (especially in Europe) want to switch off tracking altogether, because their citizens are tired of it. These are significant trends. Look up "privacy" on Google or Bing and see how many results you get, and the order in which they are prioritized. Is there no market for solutions here?

Personally, I don't want legislative relief. Anti-adtech laws today will protect yesterday from last Thursday with legal code that won't change for decades, or perhaps ever. On the whole that's not good in a vital and fast-changing marketplace. I'd rather come up with technic fixes that will take care of business without new laws. (Though perhaps with legal decisions based on standing laws. Those are likely to happen in any case.)

Finally, just because a glass is 1/Nth full doesn't mean that it's X/Nths empty, or can't be filled. Faith, St. Paul tells us, is "the evidence of things unseen." Without it we wouldn't have civilizations, or markets. There would be demand only for the hides of animals and sharpened rocks.

VRM isn't complicated. It's only about giving customers means toward two things: independence and engagement. To see how that can be done, one needs to stand on the side of the customer. So that's what we're doing. 

Intent casting shifts balance of power (and Facebook dips a toe)

Back in 1980, Prof. Allan Schnaiberg wrote about a theory he'd developed called "The Treadmill of Production" which was in part used to explain the drastic changes in US production quantities and/or qualities after the second World War.  It suggested how advances in technology, driven mainly by producers seeking increased profits allowed them to invest in new technologies which further increased production which was necessarily then matched by an increase in consumption.  This created an ever growing cycle as more efficient production required further economic growth to offset unemployment created by the previous mechanisation.

At a simple level it suggested that it is not demand from the consumer that drives supply but rather supply that creates the desire for demand.  In the paper "Interrogating the treadmill of Production" it went on to discuss  the focus of the theory on the production side rather than consumption side and the fact that consumers can only consume what is produced saying:-

"Consumers may opt not to consume specific produced items.  But they are not empowered by market processes to determine how such items will and will not be produced."

Ignoring the environmental aspects of this (as the ToP theory was focused on how this impacted the environment), it's interesting how this power play between producers and consumers may be changing in the sense that consumers are increasingly being given control of production.

Traditionally there was no way to access consumer needs in any formal way and so producers would create mass-market products based on limited market research studies.  However, technology is changing that allows consumers to provide feedback on products that don't yet exist, create demand for new product ideas and even to create their own products.

The concept of "Intent Casting" is one way this is manifesting itselt, with consumers able to create and issue their own personal RFP for a product or service they want and for producers/suppliers to be able to respond to this.  The website AskForIt for example allows consumers to ask for anything and through social sharing, to gain support for this from others.  Another website called OffersByMe allows you to indicate what activity/service you want and how much you're prepared to pay for it - offers are then shown/sourced based on this request.

It is probably home services which is the biggest growth area for intent casting however with services like Thumbtack allowing the consumer to indicate the service they want (plumber / electrician / etc.) and to then receive quotes from local tradesmen for the request.

Facebook has recently extended into the area of intent casting by extending it's "Like It" button to include a "Want It" button.  This allows consumers to indicate products they want which are then added to collections.  They, or more importantly friends can then reviews these and click through to actually buy then.  While at the moment this is more of a wish list function, I suspect it won't be long before Facebook are mining these "wants" (or essentially consumer intents) to provide relevant offers from other service providers.

Intent casting for existing products and services is just the start of it though.

Crowdfunding website Kickstarter is opening up to UK projects at the end of this month, allowing anyone with an idea to sell it to consumers before they've even produced it.  In this model, intent casting actually starts to drive production as users on Kickstarter essentially help to bring the product to the market through demand (and donations).

Consumers can also now take a step back even further and become producers in their own right.

CreateSpace by Amazon is one of a number of companies that allows consumers to create their own books and to have these professionally printed on demand.  Website Ponoko takes this even further, allowing consumers to become producers with physical materials.  The user submits 2D and 3D designs and can then have these custom manufactured in over 80 different materials.  These products can then be listed and sold via the Ponoko website and custom manufactured on demand based on each individual order.

Brands such as Nike have also experimented in this area, allowing consumers to design their own trainers and have these uniquely produced.

Finally, new technologies are letting the consumers actually manufacture their own uniques goods on demand, in their home.

3D printers are now becoming commercialised to the extent that early adopter consumers can now purchase them, with brands like MakerBot and Cubify leading the charge.  The BBC recently reported how Disney Research is looking into how toys can be designed that can only be produced with a 3D printer due to their unique characteristics and controversial file-sharing website Pirate Bay is starting to host what it terms "Physibiles", or 3D printable designs.

It doesn't take much to see how all of these trends may ultimately come together, allowing the consumer to find products that don't yet exist and express a preference for them to direct what ultimately gets produced or is simply produced on-demand, whether by a 3rd party or at home.

This won't slow down the treadmill of production (and it's environmental impact), but it may change the economics and dynamics of it.  Given that "a key dimension of power is the ability to influence, if not dictate, the choices of those less powerful.", giving consumers more direct choice and the ability to state their intent is certainly a step forward.

Balancing big data with a big voice

Back in the day, loyalty communications were pretty simple.

You got a Welcome Pack when you joined and then periodic points statements after that.  The statements may have contained some offers, and if you were really lucky, these may have been personalised in some way.  Some people really pushed the boat out and sent individual mailings with specific offers, normally in response to a lack of behaviour, trying to get you back in-store.

Then email arrived and it became much cheaper to be relevant - or so we thought.  In practice it just became much cheaper.  Emails were sent, even if there wasn't anything particularly relevant to say and if you didn't like it... well you could always opt-out.  So what happened to that dream of 1-2-1 marketing?


Quite simply, it's actually pretty hard to be relevant all the time.

Sure you can use analytical techniques to target customers who you think have a propensity to do something.  Or you can respond to customers with trigger marketing based on their behaviours (i.e. not purchased in a little while) and send an email to encourage them back.  However, for regular communications it's much harder to create customised content for each member based on their exhibited behaviours - for many programmes it's just too hard (or costly) to be relevant.


But there is a simpler way - just ask the customer what they'd like through the use of a preference centre.

With an increasing number of channels and ways of interacting with customers, a simple opt-in/out marketing permission doesn't really cut it any more.  Customers are being trained by social networks like Facebook that allow them to manage who can access their data and for what purpose.

For example, with a simple Facebook wall post I can choose whether to hide that post or not, increase or decrease further posts from that friend, unsubscribe from further communications from that friend or unfriend them completely.  With apps, I get further choices - deciding whether that app/partner can for example access my personal information, access my friends or post on my wall.

LinkedIn go one better and intelligently look to help you control preference.  If you subscribe to a group on LinkedIn and opt in to receive updates via email, LinkedIn will proactively dial-down the frequency of communications if you haven't visited the group for a while.


Preference centres essentially help to manage this by giving customers control over what communications they want to receive, about what topics, over what channels and at what frequency.  Email marketing specialist Adestra reports that preference centres can have a real impact on unsubscribe rates, suggesting that giving customers choice keeps them engaged.  Digital marketing specialists Smart Insights provide some advice on the use of preference centres suggesting that you don't offer what you can't deliver.  If you provide choice in terms of topic or frequency, make sure you have the content and capability to manage this.

If you google preference centres however, they seem to be a feature of email marketing but, little else.  This is I think needs to change.


Preference centres need to become a key feature of loyalty programmes to control preferences for all aspects of the programme and to help manage some of the innovations that are just around the corner.

• For gamification features, members are going to want control about what achievements are posted to which social channels and when.  This  "social currency" is where the key value is within gamification, but that value will only work if the member feels in control.  
• Vendor Relationship Management (VRM) functions will allow members to manage their loyalty data and which partners and/or applications can access this on their behalf.  Like Facebook, members will expect to be able to control both who has access to the data and what data is shared.  They'll also want to able to terminate these relationships at will.
• The "Internet of Things" will bring a host of interactions that can be recognised and rewarded, but members will want to be able to control what can be seen (and recorded) and what can't.  Just because my toothbrush can tweet it's usage, doesn't mean I want it to.

With an increased focus on "Big Data" and the headlong trend to get more and more data from more and more sources it can sometimes be easy to forget that there is a customer at the heart of that data and they'd actually like to be heard.

Sure, we can use the data to work out when someone might be pregnant based on their purchase patterns, and this can be really useful to both the retailer and the customer.

We could also just provide the customer with an easy way to tell us and to give them a big voice...

You and Yours (3 key loyalty trends for 2012)

At this time of year, thoughts tend to be about you and yours. This however may be a continuing theme going into 2012 as I think loyalty marketing is going to become a lot more interested in "you".

This is more than just mass personalisation or segmented communications. I believe 2012 will be about individual engagement and empowerment as consumers provide more and more data, expecting increased control over it and better experiences being delivered because it.

You (and your data)

Back in 2006, Time Magazine named the Person of the Year as "You". Pointing out the cultural shift that social media had begun to bring, they recognised that it was democratising communications, with people sharing with each other and big institutions and governments beginning to lose control. They described it as:-

"[The] founding and framing [of] the new digital democracy. It's [..] about community and collaboration on a scale never seen before [..] about the many wresting power from the few."

It's unbelievable to think that this was 5 years ago now and Facebook was just starting out and MySpace was king. Whilst the tools we use may have changed, the pace itself hasn't. Social media has indeed wrestled power from the few leading to Time Magazine nominating the Person of the Year in 2011 as "The Protester". Highlighting the role of social media in showing injustice and gathering support they said:-

"One of the unequivocal generational virtues of these movements has been their use of the Internet and social media."

It's not just in politics that we're seeing this democratisation however. Consumers are also gaining more and more power with the UK government for example recently announcing that they plan to give consumers more control over their data by releasing it back to them. In describing this they say:-

"[It] will give consumers increasing access to their personal data in a portable, electronic format. [..] Individuals will then be able to use this data to gain insights into their own behaviour, make more informed choices about products and services, and manage their lives more efficiently."

Outside of government, some of the biggest collectors of personal data are loyalty programmes and so I'd fully expect them to begin taking part in these kinds of initiatives, allowing members to use their data to better understand their buying habits, but also to unlock more relevant offers and promotions on their terms. Indeed, many of the companies signing up to the UK midata initiative are companies with their own loyalty programmes. Generically termed VRM (Vendor Relationship Management) or PIDM (Personal Identity Management), I think 2012 will be the year when we start to see this trend gaining ground.

Your Behaviours

Increasingly, as you carry out an activity you leave a trail of bread-crumbs which others can use to follow you. Whether its location information that your smart-phone tracks, items you view but don't purchase or the TV programmes you watch (and then discuss on Twitter), all of this information is out there waiting to be collected and used.

This data is providing insight into previously hidden behaviours. Bricks and mortar retailers will start to get the same visibility as that enjoyed by online retailers, seeing those customers who have visited, but not bought or which items they viewed before purchasing. TV advertisers will have more visibility of which adverts were seen by which individual customers, allowing them to create a true ROI from awareness to purchase.

This is all being made possible by a combination of smart-phone/tablet penetration, innovative new apps and an established social graph. Using tools like twitter and Facebook as identity management, companies can collect together and refine this raw information from apparently disparate sources.

People are already using twitter for example to comment in real-time on TV programmes and this experience is being enhanced through new applications like Zeebox in the UK and IntoNow from Yahoo in the US. Zeebox co-founder Ernesto Schmitt says:-

The emergence of net-connected TVs; the mass proliferation of companion devices like smartphones, laptops and tablets; and people's expectations that entertainment will be socially connected felt like a perfect storm. The time was right to revolutionise TV

Increasingly using "fingerprinting" technology, these applications can automatically detect what TV programmes you're watching and any associated advertising. Linking this to your loyalty purchase transactions is simply the obvious next step and something i'd expect to see appearing in loyalty programmes in 2012.

Your Experiences

Apple changed the face of electronics retail. By combining great looking products with a great in-store experience they managed to make the electrical stores more of a destination than a retail outlet. Others have quickly followed, most notably Dixons in the UK with their pilot store Dixons Black in Birmingham. As offline retail increasingly struggles against online, especially where the products are more commodatised like in electrical, then the focus is shifting to the in-store experience. Using a combination of knowledgeable staff and well presented products, retailers are fighting back.

As retail expert Clare Rayner of Retail Acumen says:-

When you don’t offer anything special then the only thing you can do is compete on price… and that’s a downward spiral where the retailer with the deepest pockets to “buy their customers” is going to be the winner.

Retailers like Apple, Dixons, Game and Disney are starting to offer something special to turn the shopping experience from a physical one to an experiential one.

Apple do more however. They have turned the purchase process into a relationship. Making the stores also a centre for servicing and support through the "Genius Bar" as well as running seminars and training, they actually want customers to return. Whilst this isn't a loyalty programme in the traditional sense, i think it indicates how retail loyalty is changing. It can't simply be something stuck onto the side of the retail process and instead needs to be deeply embedded into the experience.

Expect to see more retailers upping the experience in-store and needing their loyalty programmes to help both support and drive this.

Conclusion

As these 3 key trends converge we're going to see a blurring of the lines between online and offline retail, with consumers having a more tailored and personalised in-store experience and with retailers gaining a better understanding of (and ability to influence) the end to end purchase process for each individual customer. Loyalty programmes play a key and central role in all of this as a means of proactively gathering consumer data in an opted-in manner and allowing appropriate reward and recognition to be given back.

This will result in "you and yours" - your data, your behaviours, your friends, your experiences - being a central theme for 2012.

I probably say this every year, but 2012 is going to be an exciting time in loyalty marketing!

Image credit:♫muxu's photostream

Millennials - More open, but no less private

Well if you have any association with loyalty marketing, you can't fail to have noticed the new brand on the block, Aimia.

Whilst exciting news (full disclosure - I work for Aimia), it was also great to see some new research released at the same time which we've just carried out on the loyalty market. Part of an ongoing strategy for loyalty thought-leadership, the new research entitled "Born this way - the US Millennial Loyalty Survey" focused on the growing importance of the Millennial generation. Numbering over 1.7bn globally, this generation is bigger than the Baby Boomers and three times the size of Generation X - they are also coming of age and so will be increasingly important to brands who want to connect with them.

Whilst the research focussed on many different areas, a really interesting aspect was the Millennials opinion of data privacy.

Interesting because for many, including Facebook chief, Mark Zuckerberg there is a feeling that younger people don't care about privacy and will share anything and everything. Zuckerberg was quoted as saying:-

People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people

For a generation growing up in a connected world with internet access, mobile phones and social networks it's probably no surprise that they have a different take on privacy, openness and the sharing of data - but does this mean they are any less concerned about their privacy?

The Aimia research does indicate that they have higher levels of openness than non-Millennials being more likely to share personal information with websites (36% vs 22%) and more likely to share information with a reward programme (50% vs 37%).

However what doesn't seem to change with age and is consistent across the generations is the desire around data to be both informed and to inform. Consumers overwhelmingly want to know why data is being collected (84% Milllennials / 86% None) and want to be able to opt in to sharing it with with over 77% preferring to opt-in when sharing location information or online behaviour.

There is however a higher level of trust with reward programmes, with Millennials trusting these even more. It seems when the value exchange is explicit and the consumer knows why their data is being collected they are much more comfortable with sharing it. Highlighting this within the report, it says:-

Millennials expect the Value Exchange to be transparent and permission-based. [they] are willing to grant you a measure of trust—but will quickly end the relationship if you violate that trust.

Social network privacy is also important to all consumers with Millennials valuing this even more (40% vs 38%), indicating both the value they put on social networks and the value they put on their data. This is backed up by new research from Forrester in a report entitled "Personal Identity Management". The report discussed findings from Gigya which highlighted how consumers tend to use different social network identities to log into different types of web content, stating:-

Users are most likely to log on to entertainment sites via Facebook Connect, for example, but prefer to log in to news sites via their Twitter handles. Each option shares a different set of data with the authorized site, so the fact that consumers are making an active choice highlights how they differentiate among the various sites with which they engage.

The Forrester report goes on to highlight a growing trend for consumers taking more control of their personal information, something they term PIDM (Personal Identity Management) but which is also similar to the growing movement around VRM (Vendor Relationship Management). This is something which is backed up in the Aimia research where the consumers desire for more control of their data is expressed with a strong preference (76%+) for being able to create a portable "privacy profile".

Forrester go on to discuss the implications of this for marketers, highlighting five main areas that need to be addressed in order to "unlock" consumer information and which echo the Aimia research around the consumers desire for privacy, security, value exchange, transparency and portability.

In conclusion, Forrester articulates what they feel a value exchange looks like for consumer personal information saying:-

[..] Two factors will come into play when it comes to the notion of value. First, consumers will need to receive highly targeted and relevant content, offers, discounts, and rewards for sharing their data. Second, we envision a rewards-based system wherein individuals will accumulate points across a closed ecosystem of marketers, services, and vendors that wish to retain maximum access to consumer data

This sounds a lot like a loyalty programme to me and given the increased likilihood for consumers to provide this information to reward programmes as highlighted within the Aimia research, it would suggest that the future of loyalty is very bright indeed. Wrapping this up the Aimia research concludes by saying:-

[..] The tools of loyalty management can make the difference. By facilitating the value exchange through targeted applications of reward and recognition, you’ll gain customer data that provides insight into Millennials as individuals. You’ll learn to deliver offers that focus their attention. They’ll respond to your efforts with increased loyalty, profitable behavior and word-of-mouth advocacy.



Pizza Express app - a glimpse into the future of VRM?

Pizza Express have launched a new iPhone app which redefines the space for retailers and at the same time provides a possible glimpse into both the future of payments and CRM (but more on that later).

The application includes a number of clever features such as allowing customers to view their past receipts (great if you need to expense something), create "favourite" restaurant locations and pre-book a table. The really interesting part however is a deal with PayPal that also allows a customer to pay their bill directly via their mobile by entering a unique 12 digit code printed on their receipt - letting the customer then simply get up and walk out as it's seamlessly integrated into the restaurants POS.

This in itself is an interesting loyalty play as Pizza Express get to know who the customer is, what they purchased and how often they come and there is not a loyalty point in sight. It's a compelling application that smooths the purchase process, making the next purchase more likely.

Whilst this is a really innovative app for Pizza Express it's actually part of a wider trend to disintermediate the payment eco-system and the functionality is quite similar to that offered by payment start-up Square.

Jack Dorsey, Square's founder is quoted as saying that they want to replace cash registers, wallets and loyalty cards. Rather than simply trying to replace a specific part of the existing process - exchanging the plastic card for the mobile phone - Square are actively trying to join the whole process up with Mr Dorsey saying:-

"We think it should be one system"

One really interesting innovation within Square is their application Card Case. This allows a customer to create a list of their favourite places and to setup a tab with them, simply paying by giving their name - no swipe of the card necessary. Like the Pizza Express app it also provides access to your receipts; in essence centralising your payment and purchase history and making it accessible.

This is a really interesting feature that both Pizza Express and Square have in common - the provision of customer data back to the customer - and it is becoming increasingly common as customers begin to expect their data to be collected, but increasingly consider it "their" data. When I shop at Tesco I know they are tracking my purchases, however when I go online and see new products added to my favourites list it begins to actually feel like my data.

This trend of providing information back to customers and giving them access to and ownership of it is also gathering pace.

Within websites and applications for example you are increasingly given the option to login via social networks such as Facebook or Twitter. While you still login, connecting via a social network provides a subtle change. You are actually granting permission to that application to connect to you rather than the other way round. At any time, I can review my relationships with different applications and simply close them down by removing the authorisation. I can also look at the permissions I've granted to those applications and change what information they can see.

There has been a transfer of power within identity management. It's now my identity and I can choose who has access to it, how much access they have and when I want to end it.

Imagine this trend being extended to all your interactions.

Within a supermarket loyalty programme for example you could link your purchase history to an app from a CPG manufacture like Unilever. You'd be doing this in the full knowledge that Unilever could then access your purchases and provide you with relevant offers (or reward points). You'd be choosing how to use your information for your benefit.

This is a really amazing thought and something that has been termed VRM or Vendor Relationship Management by Doc Searls, a veteran technology journalist and key founder of ProjectVRM which he describes, saying:-

Since the dawn of the Industrial Age, large companies have been working to "capture" and "lock" customers inside what we today call "silos" and "walled gardens."... ProjectVRM is a new Berkman Center research and development effort that is working to provide customers with tools that provide both independence from vendor lock-in and better ways of engaging with vendors -- on terms and by means that work better for both sides.

I love the idea of this - letting customers engage with brands on their terms with their data - and can see many applications across different industries.

How far this can go will be interesting to see (and to define), but the principle of making customer's data accessible to customers is a key trend. Facebook, Twitter et al. have already proved that making their systems open and giving customers control has only made their service more compelling.

Brands and loyalty programmes collecting customer data and interactions may have to take a leap of faith and empower the customer for the greater benefit of both the customer and the brand.

As Doc Searls said in his earlier thinking within the Cluetrain Manifesto:-

We are not seats or eyeballs or end users or consumers. We are human beings—and our reach exceeds your grasp. Deal with it."