Is there a Loyalty Marketing Generation Gap?
filed in Brand, Communications, Conference, Social Media, Thought Leadership on Apr.25, 2009
The promise of social media to Loyalty Marketers should be clear. We’ve been advocates of establishing two-way dialogue with program members for the past 20 years, touting that only within the trusted environment of a loyalty program will customers share their preferences, aspirations, and concerns relating to your brand.
Don Peppers and Martha Rogers coined the term “1 to 1″ marketing in what seems an ice-age ago. While the concept was right, execution was too costly for most companies to absorb. It is one thing to craft promotions, offers, and communications by segments, but to drive personalization to the individual account level was not financially sustainable. After the first wave of failed CRM installations, the ambitions of “1 to 1″ marketing were softened to a more practical “Mass Customization”.
With CRM’s legacy of unfulfilled potential, one would think that Loyalty Marketers would be tearing apart the box labeled “Social Media” like a child on Christmas morning to see what’s inside.
I’m not sure it’s happening and here’s why:
Attending Card Forum & Expo in Marco Island last week, I heard a great keynote from Joshua Peirez, MasterCard Worldwide. His topic was innovation and he took an informal poll in the room of 200 bankers:
- Who’s on Twitter? – less than 5% raised their hand
- Who has a MySpace? – no one raised their hand
- Who has a Facebook page? – 25% said “yes”
- Who knows what a Kindle is? – 10% positive response
Given the median age in the room, I was almost relieved with the MySpace answer, but noticed the uncomfortable murmuring that waved through the room upon the mention of Twitter and Facebook. Mr. Peirez had made his point that “we” in the banking and card issuing industry need to understand, if not embrace, these new communications tools if we are to stay current in the market.
Listening to other sessions, my suspicions that all things social media were regarded as distractions to be enjoyed by the younger generation but not to be taken seriously by business, were reinforced.
There was a fascinating panel of “Retail Loyalty Leaders” facilitated by my friend and colleague, Rick Ferguson, Editorial Director Colloquy. Executives from Best Buy, Macy’s, and Saks shared how it was their most loyalty customers who continued to shop even after the economic downturn last fall, but made no mention of social media until an attendee posed a question at the end of the session. Responses from the panelists were general and non-committal, indicating that social media was “interesting and deserved study” while not citing any ongoing programs.
Imagine you are standing on the crest of a ridge with the entirety of loyalty marketing knowledge under your arm. Across a deep ravine on the next ridge is Generation Y, all 80 Million of them. You can’t just walk over and engage them in what you have to say as there is a river running swiftly through the bottom of the ravine. You’ve got to build a bridge to reach the other side or you will miss the opportunity to engage this massive consumer audience.
Social Media could be the bridge. Read carefully, as I am not telling you that Social Media is THE answer or the ONLY answer. But, it is the best opportunity we have ever had to fulfill the promises of 1 to 1 Marketing. The technology allows business to tailor messages to small groups if not individuals and the Millennial Generation is the first ever to be so forthcoming with personal insights and opinions.
There is evidence of experimentation in the space, with AirMiles Canada adding a community to its web site. It’s purpose is clear as the landing page advises “Now there’s a place where you and other collectors can swap tips, experiences, and chat about anything and everything Air Miles”.
And there are a few active Loyalty Marketers with a presence on Twitter. If you open your own account and wonder who you should follow, you could start with @andrewkinnear, @barrykirk, @Phil_Rubin, @Kobie_Marketing, @LoyaltyLab, @Loyalty 360 and don’t forget @billhanifin.
One of Hanifin Loyalty’s rules for engaging Generation Y is this:
- Don’t rationalize the need – you don’t have to like it or even fully understand it, you just have to do it.
Meeting the Millennials where they are sets the stage for engagement. How you present your brand from there is a topic for another day.
Follow me …….
April 25th, 2009 on 9:26 pm
Bill- Great post. The Air Miles Community has been getting some great uptake. The avid Collectors are now able to help the moderate Collectors with program tricks/promotions/mechanics which ultimately helps everyone (business and Collector).
Still very early in the life of the Community, but I expect we’ll see some great results back to the business in the coming months.
Cheers,
Andrew
@andrewkinnear @airmiles
April 27th, 2009 on 11:46 am
Aahh, yes, you ARE the sly one, aren’t you? Well, I agree, absolutely. There is a gap. I’m not sure the uncomfortable nature of the response from the banking community had to do with a generational difference, however. I believe that discomfort would be attributable both to a literacy issue, in the form of inability to relate to the need for an online persona, and, the fact that there would likely be no value to the industry for that prescribed presence. The industry is one built upon a theory of maximum benefit to minimum energy output, correct? It’s a best ratio scenario, and they already know their audience, especially in this economy. My take, is that if they are on Twitter and Facebook, it’s strictly a personal decision to stay in some sort of contact with a community of interest. MySpace has more of a creative audience & appeals to a more artistic community. These are not necessarily generational differences. The Kindle ‘response’ was an interesting one. I’m glad to see that at least 10% view it as positive, I suppose.
The need to establish on online presence is a personal decision, based upon a critical review of your lifestyle, your work habits, friendships… what triggers an interest in your own life? I believe if you are to effectively be on social media sites, in order to elevate standards in the form of a business philosophy & to account for and communicate best practices in your industry or professional life, you need to deliver accurate & interesting information, & to be accountable for everything you deliver.
April 27th, 2009 on 4:45 pm
Great stuff, Bill. I’m admittedly an evangelist for social media, but may I suggest an alternate analogy to your idea of building a bridge across the river to Gen Y: Gen Y is busy building boats and sailing off down the river — whatever their choice of flotation device, you can call it “social media.” Forget building the bridge — they aren’t going to wait for it, nor do they want it. What we need to do is figure out what kind of boat we’re going to use and join them in the water. We won’t control the river, but we can be part of the journey.
Lisa, I appreciate your perspective. Most of my adult friends and marketing peers definitely view social media as a choice, and sometimes see establishing an online presence as interesting, but unnecessary. It seems clear that younger consumers don’t have the same hesitation — to them having a social media presence is as natural as having a phone number — its part of being a social person and a consumer.
April 27th, 2009 on 4:49 pm
Bill -
Sadly you are absolutely right in your characterization of loyalty marketers(the banking and card industries especially).
While you were at CardForum I was at the Freddie Awards where the same lack of innovation was apparent. The travel industry, whose frequent flyer programs really pioneered the “modern” loyalty marketing movement, really have made little progress in over 20 years.
Hmmm, a generation is about 20 years or so, right?!?
Let’s keep this discussion going – we’re just the ones to drive this innovation.
Thanks!
Phil
@phil_rubin