To infinity and beyond - Engaging consumers through immersive discovery

Have you noticed a subtle change in how you browse some content online?

For many sites, you no longer have pages of content that you need to navigate with "next" and "previous" buttons.  Instead as you browse the content and start to reach the end, new content is simply loaded in underneath.  Social networks like Twitter and Facebook are big users of this technique, as is Google if you're searching for images.

Infinite scrolling as it's technically known is also being used by some commercial sites.  Amazon for example is trialling a version of it with it's Windowshop offering which is still in beta.  Although it works on standard PC browsers, it comes into its own on a touch based tablet such as the iPad where the Windowshop app allows you to simply explore the store by navigating what appears to be a borderless page jammed full of visual eye candy.

And it's this eye candy that really works well, enabling us to scan through hundreds of images until something catches the eye.  There is no purpose to it - sure you can search, but that kinda misses the point.  This is all about the browse experience.  You're supposed to just sit back and window shop, literally.

Amazon describe this as "[a] new experience [..] designed to make exploring everything from books and toys, to video games and gym equipment easy, fun, fast and convenient for iPad owners"

It would be wrong though to see this as simply another way to view content; instead, this immersive discovery moves the user experience from a functional activity to a leisure activity.

Whereas you would normally go to Amazon to make a purchase and would use it's search functions to find the item you were looking for, the Windowshop is instead  something you do with almost no purpose - like watching TV, browsing a magazine or watching the sun set - it's about filling time with something enjoyable.

This is a really interesting difference and something I think could be leveraged by anyone with a large amount of content, whether retailers, publishers or even loyalty programmes with rewards.  Moving the users mindset from "doing" to "enjoying" has the opportunity to create greater engagement and give you a slice of if that finite resource - attention.

One of the leaders in this area has to be Pinterest.  It has turned immersive discovery through its infinite scrolling from a convenience feature into a real engagement mechanic.

At over 97 minutes on average per month spent on the site by each visitor, Pinterest is a highly sticky user experience - and all it does is let you browse images.  This compares to just 21 minutes for users on twitter and 3 minutes for those on google. Only the behemouth that is Facebook exceeds this  time - by a mile -at 405 minutes per month per visitor.  When viewed per visit though, Pinterest does even better, clocking up 15.8 minutes per visitor on average compared with just 12.3 minutes for Facebook.

So what's different?

Well Pinterest have taken infinite scrolling to the next level by using different image heights and laying these out with what is known as the masonry layout.  This essentially allows them to show images in a more natural, engaging layout that doesn't feel like a fixed grid.  The real benefit though of the masonry layout is the fact that there is no clean cut line - no easy place for the user to abandon from.  By showing the following images just peaking out from below the fold, the user is more likely to be intrigued by something they can't quite see and will scroll down a little more - and so the process repeats.

Another thing that works for Pinterest is the fact that there is essentially no ordering from good to bad.  In a traditional search result, the returned set is ordered by something such as ratings, value, recency, etc.  This means that after a few pages, if you see results that you're not sure about you'll feel like you've hit the bottom, even if there is more content to go.  With Pinterest however, the pictures are all mixed, some good, some bad, some intriguing, some boring.

You don't know what you'll find on the next page, but you get a peak of it thanks to the masonary layout.

This is the difference between searching and browsing; between doing and enjoying.

With search, you want to bring back the minimum amount of results matching the search criteria - it's about pinpointing exactly what the user is looking for.  With browsing however, the user experience is very different.  The user is simply looking for something that catches their attention and so if you put all the good stuff at the top, they are unlikely to keep browsing.  However, if you seed the good stuff, the most popular items throughout the browsing set then the user will continue to be surprised.  They won't know what's coming next but they'll want to find out more, to browse more - to engage more.

Sure, let the customer find exactly what they want when they want it - but also just let them explore and have fun.  Its the immersive discovery experience you're looking for and it fills a different need for consumers.

I think Pinterest has set the bar high on immersive discovery using its clean design, masonry layout and infinite scrolling - but it has also shown a new way engaging people and engaging with content.  Changing the user experience from one of "doing" to one of "enjoying" and gaining a greater share of attention makes this something really worth exploring more.

Give and ye shall receive (it's guaranteed)

Visa Europe reckons we'll be spending nearly £14,000 per second this Christmas Eve - and it might be even more than that based on the disruption the snow has caused to peoples plans.

All that money ringing through the tills just so that we can give.

For the most part that's giving without any expectations of getting something back; buying presents for the kids or close family and friends. However for others you may give simply because you previously got given - returning the favour year on year.

What if though, rather than giving gifts as a selfless act, you instead gave gifts specifically for what you could get back. What if you knew before hand that buying a certain gift for a certain person would guarantee an even better gift in return.

Would you be more tempted to buy them a gift?

Well hopefully this isn't a scenario you'll experience this year at Christmas, but it's certainly one you might be experience in the near future - as a consumer.

Recently reported by AdAge, the Palms Hotel in Las Vegas is giving away access to specific services and amenities to customers they feel have influence. As Palms' chief marketing officer, Jason Gastwirth puts it "allow[ing] high-ranking influencers to experience Palms' impressive set of amenities in hopes that these influencers will want to communicate their positive experience to their followers."

In essence, "giving" not in return for what they have already been given. Nor even "giving" based on what they think a customer may be able to give back. Instead they are "giving" so that a customer will tell others about it, increasing everyone's value.

This is no longer a "Random Act of Kindness" so beloved of loyalty marketing - this is a highly engineered act of bribery, sugar coated as a gift.

Whether you feel this is right or wrong though - this will surely work, and the reason for this is all to do with the customers clout.

More specifically, this is the customers Klout score as measured based on their online social activity. Described by Klout as :-

The Klout Score is the measurement of your overall online influence. The scores range from 1 to 100 with higher scores representing a wider and stronger sphere of influence. Klout uses over 35 variables on Facebook and Twitter to measure True Reach, Amplification Probability, and Network Score.

With the Klout score a brand can be more assured that a member has the capability to make some noise - they just to give them the reason to do so. (Or in the case of a customer service issue, even more reason to get it resolved well)

While it is easy to be cynical about this, it does add another dimension to loyalty programme design. Traditionally programmes have been very insular, rewarding individual customers for their individual behaviour, but only after they have demonstrated it.

Some have become a little smarter, looking at an individual customers behaviours and rewarding them based on predictions on their future behaviour - many frequent flyer programmes for example will now "fast track" new members who appear to look like top tier members.

It's a natural extension then to begin rewarding customers based not only on their predicted ability to be advocates, but also based on their actual capability. This is fine line between "rewarding the behaviours you seek" and blatant bribery, but used well, I think this becomes a key tool within an overall loyalty offering.

Maybe the saying in loyalty should now be:-

[Before you] give, [checkout their ability to give] and ye shall [be guaranteed] to receive.

Not quite the Christmas Spirit, but possibly a more prosperous New Year.

Merry Christmas. ;o)

3 reasons why 3x Tesco Clubcard Deals will work

Just over a year ago I wrote about how Tesco had introduced double points to the hugely popular Clubcard scheme, making it far more rewarding and really capturing peoples attention at a time when they were increasingly evaluating their retail choices.

Those in the industry questioned how long they could continue to offer double points given the cost of it and so thought it a short term promotional campaign rather than a longer term programme change. Now, 12 months later, we have the answer - it was both.

From the 6th December the Clubcard scheme is changing again, however it's not double points which are going, it's the 4x Clubcard Deals. Tescos state:-

We've decided to keep double points going, because it has been so popular and has made a real difference to how much value we've given to customers. So, your shopping will earn you twice as many points (especially useful when you do your Christmas shopping!) which means twice as much value back in your next statement.

It would be easy to be cynical about this and suggest that as they give with one hand they take with another. However while the scheme value will drop from the current high that the double points promotion brings, this is not a scheme devaluation. By keeping double points going and at the same time dropping the Clubcard Deals from 4x to 3x value, the scheme is still more rewarding than it was 12 months ago - but only just.

The table below shows example spend levels for a customer who earns points across a number of different areas. Assuming they also use their Tesco Credit Card to buy their Tesco shopping and Fuel, they are still 15% better off under the new rules than before double points were introduced.

Category	Monthly Spend	Original Scheme	Dbl Pnts Promo	3x Deals
Supermarket	£600	£24.00	£48.00	£36.00
Fuel	£240	£9.60	£9.60	£7.20
Car Insurance	£25	£1.00	£1.00	£0.75
Credit Card	£1,000	£10.00	£10.00	£7.50
Total Reward		£44.60	£68.60	£51.45

Of course, the current double points promotion has significantly increased the reward value for customers so there will inevitably be a big drop for many. If you look at this as just a promotion however, the Clubcard scheme still appears to be more rewarding.

So what is going on. Why have Tescos complicated things by essentially devaluing rewards and increasing earning simply for the scheme value to stand still?

My guess is this has been done for 3 reasons.

1. Rewards too good to be true - Customers don't trust promotions that give too much value. When testing points rewards, you typically get no additional lift moving from double to triple points and increasingly, as you lift the points value, you decrease participation. This is basically because customers begin to see the offer as being too good to be true and feel there is some other objective at play and so shy away. Ironically, in order to increase the take-up of Deals, Tesco may have had to reduce the offer to make it appear less appealing.

2. Partner Participation - The Clubcard Deals are fantastic value, but it is rumored that partners have to fund 50% of the value. With some partners like Legoland seeing an increasing number of customers using Deals vouchers to gain entry, I suspect it is becoming harder for Tesco to keep these partners engaged and to keep the offers open and free from restrictions. There is probably a gain in this programme change for partners as well, lowering their participation costs.

3. Two points is better than one - Customers don't "do the math" when looking at loyalty schemes, they simply compare one scheme to another based on the earning rate. If they get 2 points per £1 on Clubcard and only 1 point elsewhere it immediately feels more rewarding, regardless of the ultimate exchange rate. Tesco had previously tested giving 2% rather than 1% when first launching Clubcard and had seen no uplift in spend with the higher return. However, in a competitive market, this increased earn rate is probably doing a better job of attracting and retaining customers, even if it doesn't actually result in any more uplift. This was evidenced by Tesco managing to hold and slightly increase it's market share in a tough economic climate and taking share from ASDA who was fighting on everyday low prices and had previously shown signs of growth at the expense of Tesco.

It takes a lot to communicate changes like this to customers and causes potential confusion and re-evaluation. You can bet Tesco wouldn't be doing this if it wasn't going to result in a return.

What I think is great is that Tesco is not content to sit back and just go through the motions. They really want to sweat their loyalty scheme to get the most from it, even if this means making bold changes to keep it on track.

Loyalty is far from a commodity for Tesco - it still has the power to change the playing field.

What we (and Guns N' Roses) can learn from Google Instant

Google Instant has launched amongst mixed reviews. However, love it or hate it - it's part of an increasing trend amongst consumers to have have everything now. In the launch PR, the main selling point for Google instant was that it saved the worlds internet users the equivalent of 11 hours per second or 111 years per day.

On an individual basis this is just 2-5 seconds per user, and yet this is the main selling point.

It's easy to see why Google would want to minimise any possible wait time; in a recent survey, two-thirds of us have stated that we've walked away from buying something because we were fed up of queuing and 51% of us wouldn't even enter a store if we spied a queue.

This apparent impatience at having to wait for things also seems to be increasing. In the same research it was reported that British consumers are now only prepared to queue for up to two minutes - down from five minutes just six years ago. (At that rate we'd expect instant service by 2014)

This isn't necessarily just an impatience with queuing though - it's an impatience with anything that stands in the way of getting something now.

In a recent Experian survey it was noted that young people tend to use offline channels for purchases, despite researching them online simply because they "want it now" and don't want to wait for it to be delivered.

Even our leisure time doesn't escape this level of impatience as the legendary band Guns N' Roses recently experienced. At a concert in Dublin they were booed and bottled off stage after only performing four songs due to a late start to the concert. Keeping fans waiting for over an hour, they were shown peoples impatience when they did finally arrive on stage.

So with an increasingly impatient consumer, how do loyalty programmes fit which require a longer term commitment.

Many loyalty programmes work around annual timelines, with quarterly statements, annual tiering and rewards which take at least 12 months to make viable. This can make it hard to engage consumers early on when they are impatient for recognition from the programme they've joined, leading to disengagement.

For loyalty programmes to engage an impatient consumer they need, like Google Instant, to provide faster and more relevant recognition.

The standard response to this is to give more value more quickly. Giving double points, welcome point bonuses, hero rewards, instant discounts, merchant offers - anything which can bring the loyalty value exchange forward.

However, while I'd agree we need to make recognition faster and more relevant, I'd argue that the rewards tied to this recognition don't need to have a tangible value.

You don't need to give discounts, priority queuing or a £10 voucher to MAKE a customer feel special - you just need to make them LOOK special.

Giving someone a Black credit card might make them feel special - letting them show it to others makes them look special - and this in turn really makes them feel special. This is known as "Social Currency" and is defined as:-

• Things that help me belong
• Things that make me significant

Making loyalty programmes social so that peoples achievements can be shared allows this social currency to be leveraged. Using different achievement mechanics which have their roots in gaming dynamics, such as unlocking badges/levels or the use of leader-boards allows for many options to recognise and engage customers quickly and early on, without the need for monetary rewards.

Seth Priebatsch, CEO of SCVNGR recently wrote about some of the gaming dynamics which help form this social currency saying:-

Game dynamics are fast becoming a critical currency of motivation. Their power lies not in connecting us to our friends, but in directly influencing our individual behavior. Smart companies will take this time to look at their product portfolios and community behaviors through the lens of game dynamics.

Google is a smart company and is constantly looking at ways to improve its products and services to further engage consumers and stay one step ahead. If we don't want to be booed and bottled off the loyalty stage, then we also need to learn the same lessons; recognising and engaging consumers more quickly and more relevantly.

The use of social currency is one way to do this and is set to become the "Google Instant" for loyalty.

What is iPad?

Creating a new category can be hard. People know what a phone is so the fact that actually making calls from a smart phone is now a secondary function for many people doesn't stop it being marketed as a phone.

The iPad is different though.

It's not a phone, but is has 3G.
It's not a laptop, but it has a web browser.
It's not a TV but it plays and streams videos.
It's not a games machine, but it has thousands of games.

It's something new.

People will buy it because it looks beautiful, is intriguing and has an Apple badge. People will use it because it fills a need.

So as the owner of a new shiny iPad I was intrigued as to how I would use it.

What I've noticed is I use it differently to a laptop. Sure I web browse on it, check my email on it, access Facebook on it - even read my work email on it and review attached documents on it.

But I don't use it in the same way.

Whereas previously I'd have spent longer in my social networks on a laptop, I find the apps get a greater share of use on the iPad.

On the laptop, the browser was the centre of the entertainment, on the iPad though the machine itself is the entertainment. If my usage is in any way indicative of how others use it then I think this is important for brands and how information and access is provided for customers.

Brands are used to providing websites and micro sites for consumers and increasingly have been integrating into social networks like Facebook because, frankly, this is where consumers actually spend their time. However with the iPad, I think consumers will expect more interaction through the applications - providing quick, easy access to information.

When they want to track the status of an order, the number of points they've accumulated or even browse a product or reward catalogue, increasingly I think consumers will want these as applications. It's likely that as with all things, consumers will have limited space for individual brands in a given category, so those providing a great application experience will probably get increased loyalty and that front of page position.

One great example of this is Pizza Hut. They saw online orders increase exponentially when they introduced an iPhone app for ordering pizza. As with all pizza brands, they already had an online website, but the introduction of a specific application increased engagement within their key 18-34 demographic. Its popularity was confirmed with over 1m downloads and a number-two free app position.

Like the Pizza hut app though, applications available today tend to have been designed for the iPhone. It's about information on the move or in the moment. Accessing my loyalty card, reviewing my friends statuses, ordering pizza or searching for a new contact in LinkedIn.

The iPad though is different. It's a more sit back and browse experience - time is available and users will want experiences. They will want entertaining. Brands providing a compelling innovative experience will be rewarded with increased dwell time leading to greater engagement. The Financial Times application for example is a much more engaging experience on the iPad than the website version - it's tactile and draws you in.

In the end though what the iPad "is" may take a little more time to define and Apple is certainly hedging its bets with it's latest advert saying :-

What is iPad?
iPad is thin,
iPad is beautiful,
iPad goes anywhere,
and lasts all day,
there’s no right way,
or wrong way,
it’s crazy powerful,
it’s magical,
you already know how to use it,
it’s 200,000 apps and counting,
all the world’s websites in your hands,
it’s video, photos,
more books than you could read in a lifetime,
it’s already a revolution,
and it’s only just begun.

I think the last two lines sum it up perfectly - the iPad is a revolution that has only just begun and ultimately, what brands choose to do with it will be as interesting as the consumers.

Pay peanuts, get monkeys. Pay too much and create them.

The old adage about "pay peanuts, get monkeys" suggests that the quality of work - and in fact products / services - is directly related to the amount we pay. If we pay more for something then logic would say we are getting better materials, more expertise (who can command a higher day rate) and more time - all of which combine to provide a superior result.

But where does this end - when is more money too much money.

Well it would seem there can be a limit. In research carried out by Dan Ariely - professor of behavioural economics at Duke and author of Predictably Irrational: The Hidden Forces That Shape Our Decisions - it was found that offering more money to individuals to complete a task can actually decrease performance.

In a number of tests which were designed to replicate everyday work - requiring attention, memory, concentration and creativity - those offered a large financial incentive for completion fared consistently worse than those with medium or low incentives.

This research has been reported upon in conjunction with discussions around the benefits (or not) that large bonuses provide for bankers - suggesting that the size of the bonus may have little effect on their delivery and in fact may ultimately be detrimental. Counter arguments have put forth that these astronomical bonuses are less about performance and more about recruitment and retention of top talent.

Whatever the reason for the bonuses and their impact on actual performance, what interested me is that we see this type of effect within loyalty programmes as well - but possibly for different reasons.

It is well known and documented in the book Scoring Points: How Tesco Continues to Win Customer Loyalty that Tesco originally trialled 1% and 2% back in value and found no real difference in the loyalty effect - so opted for 1%. This suggests that at these relatively low values, consumers aren't additionally motivated. However, when they were researching Club Card deals, which effectively gives 4 times the reward value at partners, a lot of time was spent getting the wording right as consumers initially felt this was too good to be true.

This "too good to be true" effect is also visible in other programmes. In recent tests we carried out offering varying bonus point values for the same behaviours we actually saw a drop off in responses with a larger bonus point value. It would appear that customers felt the reward value was too much - maybe thinking that there was a hidden agenda and so was too good to be true.

All programmes need to be tuned to ensure the best value is being achieved, both in terms of how much value is given back and what behaviour change is exhibited. Too little and the value is simply wasted on little or no change - however too much and you'll see the same effect. This is mirrored in rewards with rewards which are too low in value - too easy to reach - risking a decrease in ongoing participation.

Whilst it may be right to say pay peanuts and get monkeys - and there is actually research to prove this - it would appear that this can equally apply if you pay too much, with the recent banking crisis seeming to back this up.

Whether it is money or points however, the same rules would appear to apply - under rewarding may simply recruit monkeys, but over rewarding could actually be helping to create them.

By focusing on the reward they're not confused.com

Confused.com has had some interesting advertising over the last few years - and this despite (or possibly because of) a past trend of making their own adverts internally.

Their campaign in 2009 featured apparently real users who reviewed the site commenting on it's usability. Whilst many considered the adverts annoying, there is no denying that they tapped into the trend on user generated content - looking like they'd been made for youtube and so came across as possibly more authentic than competitors.

In the comparison site space however the show has been stolen recently by the Meerkat.

Apparently dreamt up as a way to reduce the reliance on expensive google keywords such as "compare" and "market" (rated at £12 and £5 per click respectively), it was a real coup to get people looking for "meerkat" instead (at just 5p per click). In the process however it has also created a real character which itself attracts over 700k Facebook fans and was made into a sell out toy at Harrods.

Not to be outdone, Go Compare created it's own character, the really annoying tenor - however I suspect this won't attract anywhere near the same kind of following or fan base.

So if you're a brand like Confused.com, what do you do to fight back?

Well what they have done is refocus the discussion back onto the task in hand - namely saving money by comparing products. However this is nothing knew, many comparison sites highlight the typical savings you can make.

What Confused.com have done which is clever though is to make these savings tangible. Rather than simply saying you can save £150, they have highlighted a product/purchase which you could have achieved with the saving - such as a new guitar or a pair of jeans.

The strategy works because people have less emotional attachment to cash. We see this in reward programmes all the time - cash based incentives and rewards are less motivating and under perform in comparison to tangible products.

By utilising products such as a new pair of designer jeans or a new guitar, Confused.com are hoping to get deeper emotional engagement from the audience - letting them focus on something they want (which they will change behaviour for) rather than something they save.

Carlton Hood, Confused.com's chief executive highlighted this when he said:-

"What we have decided to do is to focus on bringing customers back to the site." going on to say "[This campaign] plays on this moment of regret, a character missing out on something – we have put in an emotion that we felt was very real and put humour in."

There is a real battle going on with comparison sites. In an industry which has grown quickly, the focus will now increasingly be on attracting back previous customers or taking them from competitors.

This can be fought to some degree by shouting the loudest - spending more on above the line - however increasingly it will require more retention marketing techniques and I think Confused.com have done well to start this process.

Still not getting the logo though...

Is Barclaycard Freedom for merchants?

It’s been discussed and talked about in the industry for months – whispers and rumours about how it will work and a recruitment programme no one could have failed to have missed – and finally it has launched.

Welcome to Barclaycard Freedom.  A game changing credit card loyalty programme that is sure to shake up the industry.

Maybe.

On the surface this programme is different for a couple of reasons. 

Firstly, it is one of the only programmes in the UK to unite all stakeholders in the card value chain – the holy trinity of cards including the merchant, the acquirer and the issuer.  Utilising the Welcome Real-Time solution, this loyalty programme will execute at POS via Barclays Merchant Services, providing Barclaycard via the merchant the ability to communicate directly and in real-time with consumers.

The consumer will be able to see value earned, represented in cash during each purchase and will be given the option to utilise this cash to offset any future purchase .  Essentially providing earn and burn all at POS – in real time.

This inclusion of acquiring within the loyalty scheme is a real coup – allowing Barclaycard to not only promote the scheme to consumers but also to prospective merchants – providing an acquisition and retention solution in the highly competitive acquiring market.

The second differentiator for this programme is the fact that it is engaging smaller merchants.  Many card programmes include merchant partners or offers in one way or another, but these are normally large high street names and are increasingly for many programmes the same brands.

In contrast Barclaycard have apparently invited over 30,000 smaller merchants to take part and have stated that any card holder will have over 200 merchants participating within a 5 mile radius.  Although not explicitly stated in the press releases, it is understood that merchants will be able to run and fund their own promotions and campaigns, providing additional earning opportunities for card holders.

In this way it is for all intents and purposes a coalition programme.  For these smaller merchants this brings one of the main benefits of a shared earning model which is that the scheme can still be attractive to consumers and merchants even if no single merchant can provide enough value to be motivating on its own. 

This wide reach of merchants may however also be its Achilles heel.

With so many potential merchants on board, it may not be behaviour changing enough and simply reward customers for existing purchases.  There is no doubt that Barclaycard will still benefit from an increased share of wallet as customers centre transactions onto that single card, but the retailer may not actually get any additional spend.

Worse still the retailer may also see an increased cost to taking part as consumers move payments from cash/debit to more costly credit cards – and for smaller merchants these fees will be higher in comparison to the larger national brands.

There are also question marks over how well it will work from a loyalty marketing point of view.

In theory it would be possible to make one purchase and then immediately use the reward value from this on the next, allowing for very quick, but small redemptions.  There is research available however which indicates that where customers can earn and burn at relatively low levels that this can severely limit propensity to purchase ongoing – or essentially remain engaged in the programme.

Barclaycard will need to be very careful about how this scheme is “geared” to ensure there are relevant controls in place which encourage members to save and hence chase reward value. Only in this way will it also change behaviour.

The other issue is around the intangibility of the reward. Tesco Clubcard – recognised as a leading loyalty programme – issues paper vouchers via DM for a reason. They could easily integrate earn and burn at POS but choose to send the reward value out quarterly as this provides the highest engagement. Customers get to see an aggregated cash value almost as money in their hand – Tesco branded money – and there is no doubt in the customer’s mind that their activity with Tesco resulted in a tangible reward.

There is a risk with the Barclaycard programme however that a cash value which is earned and redeemed solely via POS will have lower engagement and be viewed more as a product right than a product benefit. Again, this perception may lower scheme engagement and impact the ability to change behaviour for both Barclaycard and the merchants taking part.

And this is where it all gets interesting…

This whole programme essentially hangs on merchant participation.  If it doesn’t ultimately work for them then it doesn’t work at all.

These concerns can be easily mitigated however through loyalty communications. This scheme will need huge awareness and I've no doubt there is an equally huge ATL budget to support this. However it is more than this, the scheme will need ongoing communications, both in store with participating merchants as well as personalised and relevant communications for card holders.

With so many merchants on board, getting cut through to the merchants which are relevant for each card holder will be one of the big challenges.

I certainly think it's an interesting proposition and it will be one to watch in 2010, both to see how many merchants get engaged in the scheme but also how well it actually works for them.

Nudge Nudge, Wink Wink. Know what I mean?

There was an interesting addition to the urinals at work this week – each one had a small red bulls eye stuck onto it.

Now bear with me on this blog post before you run off thinking I’ll be discussing the men's cloakroom – I will however be linking that addition to the urinal to loyalty marketing…

The bulls eye was in fact trying to achieve the same effect as the image of the fly that was famously etched into the urinals at Schiphol airport – and that is to improve the aim of men and hence reduce spillages – and it works, reducing spillages by up to 80%.

Men weren’t asked to change their behaviour, instead the addition of the fly image caused men to automatically try to hit it.

This type of solution has been termed a “Nudge”, documented in the book of the same name as:-

Knowing how people think, we can design choice environments that make it easier for people to choose what is best for themselves, their families, and their society

Whilst this is a very noble thought, many companies have been using this type of solution for many years – not to help people (explicitly) but to sell products. Retailers (and brands) for example know the effect of product positioning on shelves and overall store layout on the sale of products.

One of the interesting examples from the book however is the story of a School Food Services Director, responsible for school meals across a large city school system. She found that by moving around how food was positioned – where desserts, french fries or carrot sticks were placed – it was possible to increase or decrease consumption of certain foods by up to 25%.

This is stark contrast to the large scale public campaigns there have been in the UK to encourage healthy school meals by restricting choice – and the backlash this has caused in some cases.

This is in essence the point of the Nudge approach – it’s not about taking away things but instead making subtle changes to the environment to encourage the desired behaviour – termed “choice architecture”.

Obviously this can work in positive and negative ways. If required, the schools could easily have promoted unhealthy options as much as healthy options through the positioning.

An example more related to loyalty marketing is what I presented in my last blog post where I discussed how when visibly reassuring people about the security of their information, people provided less personal information than when this was hidden away more. This security information (or lack of) is in essence a form of “choice architecture” or a nudge.

Within loyalty marketing there are a number of key behaviours that many programmes are looking for. This may include initial programme acquisition, usage of cost effective online channels, or getting members to redeem - and a Nudge could help in these areas.

We’ve used Nudges across a number of loyalty programmes and indeed built whole programmes around them.

For a card network, we ran a programme which rewarded retailers for simply asking customers “Can I put that on your <card network> card” – and the results were impressive. Simply asking for a particular brand of card resulted in people picking that card type out of the wallet in preference to their normal card.

In another programme we provided “concierge” style rewards which allowed people to redeem their points for anything they wanted. These types of rewards are typically aimed at high value/premium customers but the issues with them can be two fold. Firstly, giving ultimate choice can actually limit redemption; as Nudge discusses:-

More choice isn't actually in keeping with human nature - in fact people can be overwhelmed by choice and either choose to do nothing or choose poorly when presented by many options.

The second issue can be around sourcing and fulfilment; whilst being able to source anything can be a great “sell” for the programme, in practice this can take time if each request is unique and individual. Instead, we used Nudges to to help “prime” members by presenting ideas for rewards they could use their points against.

In line within priming theory, if we make suggestions for something and then ask what people want, the original stimulus in the form of the reward ideas results in more requests within these categories.

Nudging is an interesting concept and whilst we probably use many of the techniques currently through a combination of common sense and experience, explicitly considering how we can Nudge members along a defined customer journey can help keep programme costs down and increase member engagement.

So next time you see a fly in the urinal, think about your customers – or maybe wait until you’re at least out of the bathroom ;o)

PS. The title was just an excuse to link to the classic Monty Python sketch.

Too good to be true

A phrase i’ve heard a few times this week is “it’s too good to be true” – and I’ve not just heard it, I’ve said it.

When speaking with a potential supplier of kiosks we we’re discussing the business model. Basically, the model was defined as “you pay a monthly rental and we pay you a guaranteed monthly ad income which is more than the rental”. My first reaction was “why isn’t the UK plastered in these kiosks if they are essentially free” and secondly “it sounds too good to be true”.

Another occasion where this phrase raised it’s head was at some consumer focus groups we were doing. In the groups the proposition was presented and there was an obvious positive reaction, even a “wow” from one or two and then the dreaded phrase - “its too good to be true”.

Why is it that when presented with a fantastic offer we sometimes actually push it away. Well to answer this question it may be good to look at it from the other way – why do people fall for offers that are too good to be true – or scams. The Office of Fair Trading in the UK published a report recently looking at this.

In the report they point out a number of techniques that scammers use.

Scarcity Cues - whereby scammers make the offer seem in some way personalised to the consumer – making them feel as if they have done something special (or need to do something) to obtain it.

Induction of behavioural commitment - which uses small types of compliance to draw the consumer in - thereby causing victims to feel committed.

Visceral triggers – focusing on basic human desires and needs - using triggers that make potential victims focus on the huge prizes or benefits on offer.

Whilst I’m not suggesting we should be acting as scammers, it interesting that the report states “A successful scam involves all the standard elements of the 'marketing mix' and the building of a relationship between marketer and customer – that is, between scammer and victim.”

Unlike scammers, loyalty marketing does actually have a genuine offer and benefit – however it still needs to break through to consumers who may be wary of anything that looks like something for nothing.

When designing a loyalty proposition it’s important to balance innovation and generosity with what is perceived as realistic and appropriate. There are ways however to “soften” the programme.

Get people involved with small steps that introduce a “commitment”

Nunes and Dreze showed in their now famous loyalty marketing research on “Endowed Progress” that giving people a points bonus upfront – even where these points didn’t take them any closer to a reward in real terms – made consumers more motivated.

Essentially the consumer feels they have already committed to the programme and have invested value and so are more likely to want to complete the process. A small step that makes the “too good to be true” offer suddenly seem achievable.

It’s because of you…

What the Endowed Progress report also showed was that, at least for initial programme participation, people were more motivated when they we given a reason for any initial points bonus.

Even where this reason was “seemingly arbitrary” (i.e. “because you came to the store today"), it made them feel they had in some way earned it; that it was in a sense “because of them”.

Allow people to feel they are “gaming” the scheme

People like to feel like that are out-smarting “the system” – this illusion of control was found within Casinos when people were playing craps and it was shown that people tended to throw harder for high numbers and softer for low numbers - feeling they could in some way outsmart the randomness of the dice.

Letting people feel they have control over acheiving the rewards, whether this is reality or not can help turn it from something that is “too good to be true” into something which can be earned or acheived.

Avoid visual clues which might cause people to think something is too good to be true

Blogger Rowan Wilde discusses the issue of using an asterix when marketing a product or service saying “nothing else quite says ’serious strings attached’ like an asterisk…Instantly your offer is too good to be true”.

Obviously when an offer is presented it may have restrictions attached, either due to legislation or simply to balance supply and demand.

Consumers aren’t however fools - they understand that if the promotion seems to offer more value than the product itself can support, then a restriction like “1 per household” is “fair”. However as Rowans points out, it is better to be open and honest about these restrictions rather than trying to hide them away in the small print, going on to say:-

Loyalty only comes through trust > trust is only gained by honesty > honesty can only be built by being as open as possible. Being as open as possible means that sometimes you need to display things the way the consumer really wants them.

To ensure that your marketing programme is not dismissed out of hand as being “too good to be true” you need to consider how consumers will position it and provide perceived hurdles and positive validation to ensure they see it as accessible and deserved.

In psychology there is a term known as “confirmation bias” which is essentially the tendency to interpret new information based on preconceptions and to avoid conclusions which contradict prior understanding.

In essence, if consumers already have an understanding of what a loyalty programme is, how it operates and what the value exchange is, they will look at any new proposition through this lens. This means that if you have a significantly new approach, you need to consider how this is communicated in the context of existing programmes otherwise it is likely to be written off as too good to be true. In the words of Tolstoy:-

The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him.

Do you agree? ;o)

Loyalty Lifebuoy

I was reading a new white paper from Carlson Marketing about loyalty rewards entitled “The Role of Merchandise and Gift Cards Rewards in Loyalty Programs”. Whilst the report itself has some great stats and best practice around the selection and usage of rewards within a loyalty programme, the part that really peaked my interest was how redemption has changed in the recession.

Anecdotally I’d expected this – just looking at my own pattern of redemption, I’ve shifted from redeeming for a holiday to redeeming for more everyday rewards such as cinema and restaurant vouchers. This isn’t because I’m any worse off than before the recession, but there is a tendency to just “pull back” a little – just in case.

So given my personal experience, I was wondering if this was reflective of wider programme usage, and the report from Carlson suggests it is.

When looking at gift card rewards, the pattern of usage has changed with a increase of 168% within everyday expenses of fuel and groceries, suggesting people are increasingly using the cash based loyalty reward to pay for immediate needs rather than treats.

It’s also interesting that at least part of this shift came from restaurant usage, with a drop of 3% for redemptions in this category. The restaurant trade is one of the hardest hit industries in the recession as people cut back on unnecessary expense – choosing instead to cook or buy in to eat of home. In a recent PWC survey, 25% of consumers stated that the first thing to be cut if spending had to be reduced was eating out/fast food.

Loyalty programmes are however becoming more attractive as part of the recession with consumers reappraising the value exchange. What may have seemed like too much effort 12 months ago now seems like a great way to get something for nothing. In a recent article on Smart Money, it stated that consumer participation in loyalty is up 20% since 2007 and a third of shoppers have indicated that they are relying more on loyalty programmes to find value in these tough economic times – essentially using loyalty to help them stay afloat.

However, even though consumer needs are changing and reward programmes should take account of this – the rules of the game haven’t changed. As the Carlson report points out, rewards are remembered longer than cash – making reference to a report by the Incentive Federation in 2005 where 4 out of 5 respondents made this point.

If programmes go too far out of their way to accommodate everyday expenses in the short term - providing cash to make them more flexible or lowering the redemption threshold to make them easier to attain - it could simply lead to less loyalty and motivation in the long term.

Some brands however are not just “tipping their hat” to recession hit customers, some are going full out to recognise and support them. As detailed in a recent blog by Marketing Week Associate Editor Ruth Mortimer, brands like Pfizer and TalkTalk have put in place specific measures to deal with hard hard hit customers. TalkTalk for example provides a 6 month grace period for customers in difficulty, giving them a basic service for free.

Brands which can retain their customers by helping them to make ends meet - providing that extra little lift or helping hand – are surely more likely to be looked on favourably as things improve - the trick will be getting the balance right so that short term help doesn’t erode long term loyalty.

Remember… Primum non nocere

Primum non nocere is Latin for “Do no harm” and is a traditionally used within the medical profession to mean “given an existing problem, it may be better to do nothing than to do something that risks causing more harm than good”.

This thought came to mind when I saw the recent campaign from McCoys crisps. Not because it was an instant win sales promotion but rather because of the targeting of the campaign. It’s clear from the advertising and the campaign website that this is squarely aimed at men. Obviously the strapline “McCoys : Man Crisps” gives this away in a less than subtle way, but the whole digital experience is also clearly designed to appeal to men.

Helen Warren-Piper, Snacks Director at United Biscuits is quoted as saying “McCoy’s are unashamedly for men. We want to celebrate all that’s great about them, by giving them a crisp they deserve and can share with their mates when they’re enjoying being blokey.”

However, I’m a man, I eat McCoys and the campaign seemed a little too “obvious” for my liking. It seemed to come across as more Loaded and Nuts, appealing to a laddish segment. This I’ve no doubt is the intention, but if you’ve just rejected 50% of the population it’s a fine line to walk to pick up your core customers exactly. I’m guessing I’m not their core customer given the campaign, but it does raise an interesting question:-

How can you create a campaign or programme which can appeal to your core base whilst not alienating your other, smaller customer segments. Essentially Primum non nocere.

When creating a loyalty programme, one of the key aspects of attracting, motivating and retaining your key customers is the reward selection. If this doesn’t appeal then it’s unlikely to factor into a customers decision - whether conscious or subconscious – to make that next purchase.

However, where a product or service has a wide appeal, then selecting these rewards and the overall creative proposition for the programme can be a challenge. Do you go down the mass route like Nectar and provide a wide variety of rewards or position the programme to a particular segment using rewards like Travel (Airmiles), Money Can’t Buy (HMV) or Gadgets (McCoys) and risk ignoring some of your customers.

There is no right answer here as it will really depend on how focused you want the programme or campaign to be, but there are ways of achieving both successfully.

Two schemes stand out for me and the first is Tesco Clubcard. If any programme wraps up the principle of Primum non nocere it is Tesco Clubcard.

Schemes like Nectar and Tesco Clubcard need to appeal to a wide audience – with penetration of around 50% of households there is no room for a specific reward segmentation - these schemes need something for everyone.

I think Clubcard though has the edge here and this is due to their clever programme design. At it’s most basic level, it’s a cash based reward which can be spent back in store and so has the mass appeal. However, providing up to 4 times the cash value when the reward is used against the Clubcard Deals ensures that customers are drawn to these non-cash options.

Non-cash rewards are known to be more motivating and engaging for customers so this combination of cash leading to non-cash within Clubcard works well.

The other element that Clubcard does well is how it uses comms channels. It would be cheaper to simply use POS and online to communicate to customers, yet they still do a huge amount of DM. Whilst posting the reward value quarterly ensures over 95% redemption, the deals are also made available within a paper catalogue.

I think this mix of online and offline is key to continued engagement as it allows people to browse rewards quickly and easily at different occasions. Sometimes presenting rewards purely online, whilst cost effective may not be the most engaging way.

The second brand that stands out to me is Walkers - which is probably no surprise given I have written about them a number of times – but they are really innovating at the moment within loyalty and sales promotion.

Although Walkers have a mass product, what they are using is a combination of focused promotions - each having a different appeal - rolled out in a dial-up / dial-down fashion to ensure a continued presence. Using this mechanism allows them to continually engage and re-engage customer segments.

Those who liked Brit Trips, may not have been as engaged with Do us a Flavour, however with the launch of Gary’s Great Trip’s these customers can be re-engaged. This is a clever strategy and at no point does it specifically push away any customers – it will just be less interesting – doing no harm.

Contrast this with competitor brand McCoys which has not only gone for a specific gender, but has also aimed its campaign at a very focused sub-segment within this. Although not a bad strategy if they believe this market is profitable and underserved, it will make it more difficult to retain customers outside of this today and ultimately to acquire outside of this at a later stage.

There is more to loyalty than a case of wine or a toaster and the whole proposition - from how the programme is promoted and communicated through to the selection of rewards - will ultimately dictate who is attracted to the scheme and how successful this is in changing behaviour.

When designing a programme to attract and appeal to a given customer segment, it would be wise to remember the phrase Primum non nocere - making sure that your other customer segments are not turned off by the campaign as you may ultimately do more harm than good.

Money can't buy loyalty

I was intrigued by an article yesterday on plans UK entertainment retailer HMV has for a new loyalty programme. Matt Button, Head of CRM at HMV was quoted as saying "Rather than simply offering discounts on future purchases, which is how the vast majority of loyalty programs work, the aim of our rewards scheme is to more fully engage with our customers by giving them the opportunity to earn and redeem points against 'money-can't-buy' items, such as signed products, back-stage passes or invitations to special events. We believe this would make our scheme unique…"

Now the reason this peaked my interest was the inclusion of the phrase "money can't buy" and how it was felt this was a unique offering. Anyone who has worked in loyalty marketing will know the phrase "money can't buy" as its typically used by brands when they want to create a point of difference – offering rewards that only their brand can leverage rather than "me too" rewards you may get on other loyalty programmes or a simple discount off future purchases.

There are however a number of potential flaws with this approach. In a previous post I spoke about the three criteria any reward selection should meet which are that they should be Achievable, Desirable and Brandable:-

1. Achievable - Contrary to popular opinion, money can buy almost anything you want. If I wanted a signed CD or access to an event, there is a good chance with the right amount of money I would get it. The laws of supply and demand state that where supply is short and demand is high, the price will go up – so I may have to pay a lot, but I'll get it. Let's take the example of a Girls Aloud CD – a quick search on Google tells me I can buy a mounted gold record with signed cover art for £159 – not cheap, but hardly money can't buy if I'm a fan – also not overly expensive suggesting not exceptionally high demand. However within a rewards programme this is either going to have to be expensive in points terms, limited in supply or made available as part of a prize draw. All options mean the reward is out of reach for the vast majority of customers and so won't be seen as achievable. Sure customers will have a punt initially in a prize draw – but watch that participation plummet like a stone when they constantly don't win.
   
2. Desirable – Although back-stage passes and meet the star rewards sound great on paper, in reality they only appeal to a small segment of a brands customer base. Firstly I have to be a good customer – capable of buying/winning it, then I have to like the brand/celebrity/event, then I have to actually like meeting them. This is where it typically falls down… sure I like the band, I like the idea of seeing them – do I really want to have dinner with them? If the answer is yes I'm probably 14 or have stalker tendencies.
   
3. Brandable – Is this type of rewards selection on brand? Well yes, they are an entertainment company and these types of rewards tie in well with the products they sell. However so do lots of other reward options such as pre-release access to new albums, having input on console game design (think Lego User Groups), selection of entertainment related merchandise or integrating my purchases offline with my use online (buy physical album have access to download it for free).
   

I've no doubt there will be more to the HMV loyalty programme than just money-can't-buy rewards – there will be options for the masses. However if you look at the Coke Zone programme in the UK currently, they appear to have taken a slightly different approach. Sure they've had signed merchandise - and if any brand can deliver money can't buy, Coca Cola is going to be somewhere near the top of the list - however what they seem to be using at the moment is the concept of a "leader" reward. A leader reward is an item which has mass appeal and tremendous pull to drive loyalty programme acquisition and usage. The idea is the same as what supermarkets call a loss leader or leader product such as selling milk or bread at below cost to attract customers into store.

For example the recent Coke Zone Christmas promotion used amongst other rewards an iPod Touch as a leader reward and the promotion appeared to work in two ways. Firstly they offered iPods at a quite obviously discounted points rate based on the number required - you still needed a large amount of points to purchase them, but no where near what would have been the equivalent retail price. At the same time they offered the same iPods as part of a prize draw so that for those customers without enough points to purchase the iPod, they could still take part in trying to win it.

This looks like an excellent approach as it would seem to provide a reward option which is very on brand – think mycokemusic.com – very desirable to consumers and actually achievable or perceived as achievable for a large number of customers. For those customers with high balances but not enough to redeem at this time, it would also send out the message to keep saving to take advantage of the next promotion.

I don't doubt that HMV will create a successful programme, but it won't be because of money-can't-buy rewards – it will be because they create a reward portfolio which appeals to the masses, is achievable by all good customers and is very on brand.

As an aside, money off future purchases also works pretty well – Tesco hasn't done bad on this score with over 95% redemption and recognised as a world leader in loyalty programmes – to misquote "money can't buy [loyalty] – but it improves your bargaining position" - however that's a whole different discussion.

Air Miles is on the right track

It's certainly a sign of the times that when traditional brands are cutting back on their above the line activity it's the loyalty schemes which are bucking the trend and spending on it.

The new Air Miles TV advert is exactly the right thing for a loyalty scheme to be doing at this time when customers are looking for ways to make their money go further.

Air Miles as a brand has been around for over 20 years and although it has a loyal following, in reality it's been resting on its laurels for quite some time. Now it's back and it's recruiting!



Obviously the strap line "Make your money fly" fits in nicely with the current climate, but it's the other messages in the advert which interest me. The advert has 3 main themes which are:-

• Reassurance - Everybody is doing it / you don't need to do anything different
• Everyday Spend - Earning miles on your grocery and fuel spend (encouraging frequency usage)
• No Hidden Extras - All flight taxes/fees included (previously an issue for many collectors)

The Air Miles member base is ageing and it needs to inject some new blood and this advertisement is designed to do just that by using messages you would typically see when on-boarding or looking to recruit new members to a loyalty scheme. The focus shouldn't be on the rewards but on how you get to the rewards and re-assurance that you're making the right decision.

Focusing on rewards day 1 works well in terms of attracting interest in a scheme, but very quickly consumers want to know how to get that reward today - working out the effort it will take (and the amount they need to spend) - and then thinking that this will be unachievable. Instead, hinting at rewards but focusing on earning allows members to begin to build up a balance initially and they can then see how far they have progressed - allowing rewards to be introduced later.

The no hidden extras message is also about re-activation - anyone who has been part of Air Miles previously will have experienced the extra charges that used to be levied - this is saying "we've changed - come try us again".

This can be contrasted with the Air Miles scheme in Canada which although a younger scheme (started in 1992) it is a much more mature scheme in membership terms. In Canada 2/3 of all households are active collectors and the scheme has 97% awareness - making it one of the top 3 coalition schemes worldwide.

Due to the popularity of the scheme, people who want it are already in it and they all understand how it works. The focus for this scheme then is not reassurance and education, but is instead aspirational, focusing on the rewards and benefits the scheme brings and more importantly, reminding people to carry the card.



However, that said, I have no explanation for the Yummiest Mummy promotion by Air Miles Canada... there are obviously still some cultural differences between us but one look at the "related" videos on YouTube tells it's own story.

2009 – Year of loyalty?

Well it seems customary at this time of year to look forward into the next to think about what may be round the corner. 2009 promises to be a good year for loyalty marketing as now is most definitely the time to be concentrating on existing customers. That said, it will also be a year of increased focus on marketing budgets and all marketing disciplines will need to deliver the goods - loyalty will be no exception.

#1 – Loyalty marketing will become more accountable

2009 will be the year of accountable marketing - Group M, the media buying subsidiary of WPP is projecting that traditional above the line advertising will be down 9% in 2009 and Business Week reported just last week that US advertising spend is projected to be down 10%. This is not in itself unexpected, as the President and CEO of the Interactive Advertising Bureau (IAB) said recently "It's a normal recession trend: Above-the-line dollars are moving below-the-line".

As the blog Note to CMO puts it "What happens to a poorly led company when the economy goes south? The marketing budget gets cut. What happens to a well led company when the economy goes south? The marketing budget gets cut, as well; but in a well led company, the budget doesn't just get axed -- it gets reallocated…You see more channel promotion, more marketing development funding, more sales incentives."

When times are hard, marketers will be expected to get the best value for every pound spent, as a Marketing Week survey showed, 71% of UK marketers said they felt more pressurised than usual to demonstrate the impact of every marketing activity. This means all forms of accountable marketing will benefit, with online marketing projected to grow by 6%-10% but I'd also expect most below the line disciplines to benefit including loyalty marketing.

Loyalty programmes will have to work harder though – moving from a "points = prizes" mentality to one which looks to utilise all available behavioural information to target customers at every point with relevant messages and offers – recognising and rewarding the interaction not just the transaction.

#2 – Coalition schemes will expand

Coalition programmes will have an increased focus in 2009.

The coalition programme makes sense for many companies – not only are costs shared but companies that don't have enough frequency or margin to make a compelling programme can still participate and benefit from loyalty within the programme as a whole. I think we'll see more emphasis in 2009 from coalition programme providers such as Nectar and Airmiles as well the widening of existing standalone programmes and the creation of new programmes containing a number of partners. This makes sense as loyalty is going to be the watch word in 2009 and with more companies wanting to have the benefits of a loyalty scheme without the cost or long lead times of establishing one - any way of short cutting this will be taken.

Coalition programmes also make a lot of sense for consumers as it allows them to accumulate points from a larger share of their spend with a single provider. Airmiles are already reporting increases recently in new members and increased usage of the programme and have recently launched a £3.5m TV campaign to drive awareness.

#3 – Physical rewards will be back in vogue

I think rewards requirements may be a little different in 2009. Recent changes in the strength of the Pound versus the Dollar and Euro have made international travel more expensive at a time when people are also watching their spending. Vouchers or gift certificates, another popular reward choice have also taken a knock recently - with retailers such as Woolworths and Zavvi going into administration many of the vouchers issued cannot be used and also weren't being accepted by the other solvent partners such as Comet and B&Q. With predications of 10-15 other UK retailers going to the wall in 2009, people will be wary of choosing a voucher which may not be worth the paper it's printed on. Merchandise including durables such as home-wares and electrical goods as well as entertainment products like downloads, CDs/DVDs will become more popular as people stop spending money easily and so items that were simply purchased on a whim are now saved for or put off.

It's also in the programme operators interest to move rewards towards merchandise as there is very little margin in either travel of voucher based rewards and with many companies looking to reign in their marketing budgets, one simple way to do this is to offer merchandise rewards. When introducing rewards though it will be key that these don't cheapen the programme through the introduction of low value brands and items – instead as Rachel Deacon, Client Partner as Carlson Marketing puts it "With house prices deflating, people are not so interested in moving and are starting to put down roots - this is reflected in more colour being used in houses and more furnishings rather than just stark, basic furnishing. This focus on and pride in the home means people will put more premium on quality items than has been the case in the Ikea world of the past decade."

#4 – Loyalty will get more social

I've written previously about how I feel loyalty and social media can work together well – however convincing many brands of the value this could bring to their loyalty programmes has been more challenging. Social media can provide customers with reassurance that they have made the right choice through recommendations and reviews – whether this is the choice of their purchase or the choice of their loyalty redemption. It can also make it easier to sell additional products and services to other customers, once the relationships between them is understood as friends of friends are up to 3-5 times more likely to purchase a service that a friend already has.

It has however been seen as a new, disruptive technology – something that is hard to control once the genie is out of the bottle. 2009 though may be the year when we see its use within loyalty programmes as marketers look for more creative ways to utilise their budget. As Ann Handley, blogger and Chief Content Office of MarketingProfs puts it, "Dwindling budgets suddenly make low-cost social media look like the pretty girl at the ball".

#5 – Consistency

The final prediction is simply more of the same - consistency – don't rock the boat too much and make sure that any changes made work well within existing marketing efforts. Doug Burton says in Progressive Marketer "When faced with an economic downturn, some companies shoot from the hip, jumping into new mediums with no real plan for integrating their brand message or measuring the return on the investment..As consumers become more cautious and contemplative with regards to their spending, it's simply going to require a more consistency and persistence to move the needle"

Well those are my thoughts – feel free to chip in with your own thoughts and suggestions and have a Happy New Year!