Carrabba’s Italian Grill stands apart from many of its chain restaurant competitors. Sure, the food is freshly prepared, the wood-burning grill adds ambiance to the setting, and the service is excellent, but I was thinking about their approach to building customer loyalty.

Looking at several national competitors in quick-serve (QSR) and white-table restaurant chains, I found that Starbucks, TGI Fridays, Dunkin’ Donuts, Tasti D-Lite all had rewards programs offering points for dollars spent in the location. Crate & Barrel as well as a host of national specialty retailers are partnered with Shopkick, offering Kick Rewards for purchase transactions as well as checking-in at the store and scanning selected product bar codes.

Carrabba’s has selected a different path, one that is principally communication driven, using direct mail, SMS and location based services to deliver offers, promotions and – just this week (see graphic) – money off coupons.

The Amici Club was launched in 2010 with enrollment available both on-line and in restaurants. I encountered the program as I suspect many people did – by filling out a 3×5 card placed on the dinner table. Talk about old school, but Carrabba’s says it has enrolled over 1 Million people to date.

Since my enrollment, Carrabba’s has been a cautious new friend, treating me with respect. I’ve received mostly emails and a few direct mail pieces offering something special related to a holiday or inviting me to a cause related fund-raising dinner. I’ve been paying attention to their mailings because they are not beating me to death, assuming that just because I signed up that I’m their newest “best friend”.

The parsing of the direct and email invitations I have received is a good example of how to manage a customer communication stream. Smartly coordinated communications can move people from enrollment to purchase to survey, leading to additional visits and a willingness to recommend the restaurant to others. In sum, Carrabba’s is effectively managing the customer loyalty lifecycle.

Carrabba’s has also encouraged check-ins with Foursquare and has used both the location based marketing channel and SMS to communicate offers when customers are ready to dine. That’s a great example of social loyalty at work – creating an exchange with a customer near the point of purchase, hopefully presenting an offer that will influence subsequent purchase behavior.

Now, Carrabba’s has taken the Amici Club a step further, sending a direct mail offer for $10 off specific appetizers or a complementary appetizer or dessert with purchase of an entrée.

Carrabba’s has been building its relationship with customers through the Amici Club thoughtfully and gradually, and is presenting a good example of how to engage with Consumer 2.0 using Social Loyalty tactics.

I’m going to continue to pay attention to Amici Club. Let me know what you think.

Aeropostale, Inc. is a specialty retailer fighting for the attention of a client base exhibiting limited or no attention span. I’m not mean, just the father of three children, so let’s just say that I’m experienced.

No matter how you describe it, today’s consumers are distracted and its not easy to engage them for long. That’s been the dilemma of marketers trying to reach Consumer 2.0, the always-on, always-connected generation of shoppers who seem to give as much attention to their mobile handsets and touchpads as they do the person next to them in line.

If it’s a challenge to engage and maintain dialogue with Millennials and those of us in older generations who have adopted the electronic life, think of the orders-of-magnitude greater challenge that exists when targeting 14 to 17 year-old young women and men (Aeropostale®) and 7 to 12 year-olds (P.S. from Aeropostale®). By the way, marketers need to find another verb than “targeting”. It’s mildly offensive for most people and somehow really doesn’t fit when talking about elementary and middle school kids.

To break through the clutter of this noisy and competitive retail world, Aeropostale® announced the introduction of P.S. Rewards, a multi-channel rewards program designed to benefit customers whether they shop in-store or online. According to the press release dated July 19, Scott Birnbaum, Senior Vice President of Marketing and E-Commerce at Aeropostale, Inc. stated “P.S. Rewards formalizes this (strong following) relationship and allows us to recognize our best customers with special privileges and activities.”

P.S. Rewards is free to join and members can earn 1 point for every dollar they spend in-store or online.  Once members accumulate 75 points, they receive a $5 certificate towards a future purchase, equating to just over a 6% funding rate. To balance reward with recognition, P.S. Rewards members receive “exclusive” benefits including access to VIP sales and events and birthday gifts.

The P.S. Rewards program is enabled by Smart Button, a technology savvy company that is making headway in the specialty retail segment. When asked about the new program, Trevor Edwards, Director of Business Development and Sales, told me “P.S. Rewards is an example of a new breed of loyalty execution that can help retailers enhance brand affinity, increase sales, and deliver a superior customer experience”.

I have no idea what’s planned next for P.S. Rewards, but given the fact that both the kids who love the brand and the parents who are paying the bills need to remain engaged, Aeropostale needs to invoke true creativity to deliver messaging for each group in the channel they most prefer to communicate. It will be interesting to see what comes next.

A couple of years ago, I wrote a post about Atlantic City and its prolonged losing streak—and I’m sorry to report, things aren’t looking a whole lot better today. After a rocky 2009, revenues in AC fell again in 2010 by nearly 10%. And forecasters say 2011 could be even worse.

In an attempt to rejuvenate the fading gambling mecca, NJ governor Chris Christie, citing the “complete incompetence and corruption in Atlantic City”, recently pushed through legislation that makes him the city’s de facto mayor. (Which led actual Atlantic City mayor Lorenzo Langford to complain “the state is treating Atlantic City like a pimp treats a prostitute.”)

One of Christie’s first moves was to spearhead the formation of an Atlantic City tourism district, which covers a large portion of the resort city. The state will take over responsibility for public safety, cleanliness and business development. Not a bad idea, given the seamy vibe that permeates AC once you set foot outside a casino.

With that backdrop, let me tell you about a recent trip I made to the Trump Marina casino and hotel.

First thing you should know about Trump Marina is that the Donald is nowhere to be found. A few years ago, the three Trump casinos in Atlantic City were about to go broke, and he sold off all but 10% of the properties. So it’s really Trump in name only—and at Trump Marina, soon even that will be gone. Houston-based Landry’s Restaurants, owners of the Golden Nugget in Vegas, are buying the casino and will reportedly rebrand it with the Golden Nugget name.

My trip to the casino occurred during a recent boys’ night out to attend the Atlantic City Beer Fest, followed by some obligatory late night gambling. With my trusty Trump One player’s club loyalty card in hand, I hit the casino floor late on a Friday night into Saturday morning. The place was half-dead and I mean that literally, as half the casino floor was shut down due to a lack of business.

It’s not a bad place, actually a welcome break from the more glitzy and more crowded Borgata—and it wasn’t a bad night either, which for me means I walked out with the same amount of money I walked in with, while enjoying a few cold beverages on the house. (My buddy Jim fared a bit better clearing over $400 from a four-hour session at the poker tables.)

Now, I don’t expect much from my Trump One loyalty card while I’m at the place—I’m a lower tier member—but I do expect a little recognition and better customer experience when I go to the Web site, which I did a few days later to make sure my playing was being tracked. It was, but I felt a little less than welcome.

A few notes on my Web experience:

• I had trouble remembering my password—I had selected it late one night with a code word that probably made sense at the time, but was now totally lost to me. I sent a message asking for help, but received a canned e-mail reply telling me the only way I could retrieve my password was to go to the casino. No password reset function. No one to call.
• After 50 or so tries, I did remember the password to my Trump One account—let me tell you, it was pretty obscure—only to find little relevant information for me on the site. I click to view my “Statement”—it’s not there, I need to call to get the info. I click on “Rooms” and a blank screen appears.
• Even if I hadn’t hit the threshold to receive an offer or room reward, the site needs to engage me. Give me a few dollars off on my next stay. Offer me a free app if I eat at the restaurant. Tell me you can’t wait for me to come back. Show me some love!

But it looks like I’ll have to wait for the new regime to get some personalized attention. A NY-based management company is now running the Trump casinos, and according to a company exec quoted in the press, they’re “focused on cutting costs, including marketing programs that were deemed to be too expensive…we were over-incentivizing our customers…it was not a sustainable model.”

Granted the house needs to make money, but cutting back on “incentivizing our customers” seems like the wrong way to go about it—and a good way to lose an ever decreasing pool of loyal customers that is opting to go to the more glamorous Borgata—or other, newer casinos that have popped up in Philly, Delaware and New York.

But my guess is now that the Trump Marina has been sold, the caretakers have packed their bags and are waiting for the new owners to arrive so they can turn over the keys. Soon the Trump Marina will be history—and the Golden Nugget will take its place.

It’ll be interesting to see if they bring new vim and vigor in the attempt to attract—and more importantly, retain—customers.

Technology Enables, but Imagination Wins

Tasti D-Lite not only rolled up its sleeves to take advantage of open API’s from Twitter, Foursquare & Facebook to integrate them with its point-of-sale system – it used its imagination to make an otherwise familiar loyalty program structure become the first and most widely executed example of “Social Loyalty” in the restaurant category.

Imagination Wins, but Flawless Execution Keeps Your Job!

All the hard work invested by Tasti D-Lite and its POS vendor, PC America, in integrating the SNAP Social Loyalty application would go for naught if the resulting customer experience didn’t work. Last night I took my family to visit a newly opened store in Boca Raton.

I did the unthinkable – I had forgotten my TastiTreat loyalty card and had no idea of my number or how to connect with Tasti Rewards – so I simply asked the cashier to help. She asked my last name and within seconds said, “oh, you’re Bill”. Nothing more needed to be done. We enjoyed our tasti treats and had some fun looking at the social posts resulting from the transaction.

No Loyalty Asterisk™ Here

Everything worked, the customer experience was put ahead of any policies or procedures, and the interaction between customer and the rewards program was nearly invisible.

This is a great example of how loyalty program execution should take place, and there are big lessons to be learned from the simple purchase of a tasti frozen dessert.

Note: In helping clients take the first steps towards new Social Loyalty models, Hanifin Loyalty is a SNAP agency partner. Affiliations aside, the desserts at Tasti D-Lite are great and SNAP works!

While Tom Rapsas was in New Jersey buying wiper blades at Pep Boys, I was buying shoes for my son at DSW.

The difference in our experience with the respective rewards programs at each company boils down to an essential and often overlooked element of the loyalty marketing value chain – associate training.

You can read about Tom’s experience here and see that he was drilled into signing up for Pep Boys Rewards by a front-line associate probably just doing their job and striving to meet an assigned quota. The story reminded me of the “old days” when retailers instructed their people to ask for customer telephone numbers during the check out process, a tactic made famous by Radio Shack and eventually neutralized when the rules around “reverse append” of telephone numbers were changed.

I used to enjoy answering the question with “sure, if you let me know what you need it for”.  Way too many associates had no idea why they were asking for phone numbers, and were left to mutter something about offers while uncomfortably trying to wrap up the transaction. None of this is meant to ping associates, who are generally asked to multi-task (before it became popular) while residing near the lower end of the pay bands.

The responsibility falls to the business and marketing people who design rewards programs. After investing heavily in planning, data segmentation, technology, and marketing materials, the last mile of associate training can be seen as “whatever”. Failing to educate and equip the associate with enough information to enthusiastically promote the program creates a potentially monstrous pothole on the road to success.

How was my experience with DSW Rewards?  Surprisingly fantastic, as a matter of fact.

I was taken off guard when asked if I was a member of the program, but before I was able to fully respond, the energetic cashier outlined the simple way the program functions and made it clear to me that “if my wife ever shops at DSW”, the program is a no-brainer to pay back. I didn’t need to hear much else.

The associate quickly entered a few data points (not my email, you get a bonus for that) into the ePOS screen and I was off with a follow-up marketing piece in my hand.  DSW’s program was easy to understand, showed good value, and even if it’s not “my” store, I knew that our family would benefit. I gave up the same information as Tom did in the Pep Boys store but left feeling like I just made a good deal.

Isn’t that the way loyalty marketing is supposed to work?

I’m not a car guy.

So why does Pep Boys want me in their loyalty program?

I was standing in line at my local Pep Boys auto parts store the other day. Not that I’m a car guy. I usually pay my trusty neighborhood mechanic Larry to do everything car-related.But the wife needed some new windshield wipers, and I figured this was something I could handle.

Anyway, the guy in front of me in line was buying a roof rack and the cashier asked him if he was in the Pep Boys rewards program. My quick read: this guy wasn’t a car guy either, just a guy going on vacation. His response, as expected, was “no”.

Figuring the cashier would just move on, or hand him a “take one”, she instead asked him for a bunch of personal info on the spot - name, address, phone #, e-mail address – handed him a membership pamphlet and viola, he was enrolled in the program.

I’m next up in line and she goes through the same routine:

“Are you in the Pep Boys rewards program?”

“No.”

“Can I have your name…address…telephone number…”

There was no asking me if I wanted to join the program, which I didn’t – I mean I go into an auto parts store about once a year at best. There was also no concern that with only one cashier on duty, the line behind me was now a good five-deep.

The Pep Boys program? Well, it seems okay, with some nice added benefits like free flat repair and discount towing. But I could quibble. The program is a straight cash back rewards program with funding at a fair but flat 5% for all customers.

Pep Boys might consider:

• A mix of rewards, so the program isn’t all about the money
• A tiered approach that offers incremental rewards when I hit a specific spend level
• Special bonuses and perks for its very best customers
• Customer Engagement is the new focus of loyalty sponsors. Too many programs enroll, but don’t engage.

My bigger concern though is the auto-enroll aspect of the program, whereby you’re enrolled whether you want to be in the program or not. The long-term effect of auto-enrollment is detrimental. Because I didn’t raise my hand to join, the chances of my actual participation are greatly diminished. And ultimately, when the program participation numbers come in, it won’t reflect well on the results.

As you might have surmised, I’m a prime example of a customer who should not have been auto-enrolled. Loyalty program or not, I may never set foot into a Pep Boys again. You see, those windshield wipers I bought—they’re still sitting in the trunk of my car. They need a special adapter to be installed, and I’d just as soon have Larry the mechanic do it.

Like I said, I’m not a car guy.

Editor’s note: Tom Rapsas may not be a “car guy”, but he knows his way around the mechanics of a good loyalty program. After visiting the Pep Boys home page, I had to scroll below the fold to find a small logo directing visitors to the program.  Not sure why they want to enroll eveyone at POS and then make it tough to find the goodies online. If you’ve got it (a loyalty program), you might as well flaunt it!

Relationship Banking is making a comeback with the launch of Regions Relationship Rewards this  past summer. The $137 Billion asset bank ranked #3 among 11 banks in the Southeast region of a JD Power survey on customer satisfaction, but was facing some challenges as the survey footnoted their ranking this way; “customer loyalty and perceptions of brand image among retail banking customers continue to decline, while satisfaction has leveled off.”

Seeking to engage customers and encourage them to consolidate their banking relationship with Regions, Relationship Rewards was announced in June 2010 with the brand promise “To thank customers for their business” and the tagline “the more you bank, the more you earn”.

Anyone with one of three checking accounts (business or personal) is eligible to enroll in the program as long as they also have an active Regions Visa CheckCard to boot. Customers can enroll across multiple channels including toll-free call center, program website, or via the online banking application. Interestingly, the branch was not used to enroll customers.

Points are earned by making signature based purchases with a Regions CheckCard and, as is the norm in debit card rewards schemes, no credit is given for PIN based purchases. The earning rate per dollar spent on the check card varies by type of customer with Consumer checking holders earning 4 points/$ while Business customers earn 2 Points/$ and Private Banking customers earn 1 Point/$.

Bonus points are awarded based on how many products are owned by the customer and the level of average balances held in deposit accounts.

Program rules are simple and reasonable. There’s no annual fee to join Relationship Rewards and no cap on points earning per year. Points expire 36 months from the date earned and customers which close accounts in good standing have 90 days to redeem their points.

Based on two sample customer scenarios that I tested, the first a lighter debit card user with lower average balances ($250/month and Avg Bal $2,000) and the second a heavier debit card user with high average balances ($2,000/month and $50K), annual reward value could be accumulated between $90 – $385.

Considering that points are valued between 50 – 100 basis points, the light user could redeem for a one free wire transfer fee, a $100 Visa gift card, or a Wet/Dry Shop Vac. The higher earner could walk away with a bicycle, $500 gift card, or a Bose Sound Dock.

Rewards are available in four categories, merchandise, gift cards, bank rebates and travel.  There is no lack of reward choice and it appears the most value can be found by redeeming for free bank services.

A few observations from my review:

• Even though this program is created to encourage broader relationships and higher account penetration per customer, most of the value that can potentially be accumulated by customers comes from the debit card spend.
• The highest reward value can be found through reduced fees on bank services. Whether customers will find compelling reason to consolidate their banking with Regions to earn a free wire transfer fee, or pay for a safe deposit box is questionable.
• Including a redemption option for NSF (returned check) fees is bad form. I know bad things can happen to good people, but who wants to cash in points to pay for an overdraft?
• The travel rewards offer no-blackouts, and cash and points can be combined to earn rewards. Both are good features for travel rewards in today’s market.

Regions Bank Relationship Rewards is a solid entry into the retail banking market and follows TRB best practices closely. I’ll look for any results published and update those in Loyalty Truth when available.

Evidence of the health of the loyalty marketing business is that my list of subjects to write about grows faster than I can type.

Yesterday, as I picked up the USA Today slipped under the door in my NY hotel room, a glossy 8 1/2 x 11 flyer fell in my lap and changed my blogging plans for the day.

“It’s Like Joining EVERY Hotel Loyalty Program. Except, it’s only one.” was the message. Flipping the piece over, the offer was clear: book  and stay 10 nights using Hotels.com and earn 1 free night at any of the 60,000 hotels offered through the site worldwide. Better yet, signing up for the WelcomeRewards™ challenge offered the chance to win 2 bonus nights over the course of 30 total nights booked.

The punch card might be the oldest loyalty tactic in town, but it works well for Southwest Airlines and for Hotels.com. I did a quick comparison and the simplified approach is not too far away from the basic value promised by traditional hotel loyalty providers Marriott and Intercontinental Hotels Group. For example, if a member of Marriott Rewards or Priority Club stays 10 nights at one of their respective properties with average room rate of $100, a free night is on the radar.

I know that Marriott and IHC offer multiple ways to boost earnings and have much more sophisticated programs overall, but for the budget driven traveler, joining WelcomeRewards™ is not a bad deal.

Interesting to me is that the program was launched in July 2008 but has had low visibility in the consumer eye. Also, given that Hotels.com is an operating company of Expedia, I wonder why the ThankYou! Rewards currency that Expedia uses wasn’t extended over to this brand.

WelcomeRewards™ comes with a few conditions (a/k/a the Loyalty Asterisk™), specifically:

• Rewards may be redeemed at “eligible” hotels, but I could not find that term defined on the web site
• The maximum value of a free night can’t exceed the average daily rate of the 10 nights used to earn the reward. You can however, choose to pay the difference if you really want to stay at a higher priced property
• Taxes, fees, meals, incidentals and any “other costs associated with the booking” are not covered by the free night
• Each loyalty credit is valid for three (3) years from date earned
• The program may be terminated by Hotels.com at any time

Summing it up, the flyer that dropped in my lap reminded me why brands continue to choose data-driven incentive (Loyalty) programs to engage and retain customers. Far too many people that I have heard from are using travel aggregator sites like Hotels.com and Expedia to shop around and then login to their frequent guest account at the airline or hotel chain of their choice to book reservations.

To break the habit, Hotels.com had to do something and WelcomeRewards™ is an easy to understand program that delivers sufficient value change a few consumer minds.

Evidence of the health of the loyalty marketing business is that my list of subjects to write about grows faster than I can type.

Yesterday, as I picked up the USA Today slipped under the door in my NY hotel room, a glossy 8 1/2 x 11 flyer fell in my lap and changed my blogging plans for the day.

“It’s Like Joining EVERY Hotel Loyalty Program. Except, it’s only one.” was the message. Flipping the piece over, the offer was clear: book  and stay 10 nights using Hotels.com and earn 1 free night at any of the 60,000 hotels offered through the site worldwide. Better yet, signing up for the WelcomeRewards™ challenge offered the chance to win 2 bonus nights over the course of 30 total nights booked.

The punch card might be the oldest loyalty tactic in town, but it works well for Southwest Airlines and for Hotels.com. I did a quick comparison and the simplified approach is not too far away from the basic value promised by traditional hotel loyalty providers Marriott and Intercontinental Hotels Group. For example, if a member of Marriott Rewards or Priority Club stays 10 nights at one of their respective properties with average room rate of $100, a free night is on the radar.

I know that Marriott and IHC offer multiple ways to boost earnings and have much more sophisticated programs overall, but for the budget driven traveler, joining WelcomeRewards™ is not a bad deal.

Interesting to me is that the program was launched in July 2008 but has had low visibility in the consumer eye. Also, given that Hotels.com is an operating company of Expedia, I wonder why the ThankYou! Rewards currency that Expedia uses wasn’t extended over to this brand.

WelcomeRewards™ comes with a few conditions (a/k/a the Loyalty Asterisk™), specifically:

• Rewards may be redeemed at “eligible” hotels, but I could not find that term defined on the web site
• The maximum value of a free night can’t exceed the average daily rate of the 10 nights used to earn the reward. You can however, choose to pay the difference if you really want to stay at a higher priced property
• Taxes, fees, meals, incidentals and any “other costs associated with the booking” are not covered by the free night
• Each loyalty credit is valid for three (3) years from date earned
• The program may be terminated by Hotels.com at any time

Summing it up, the flyer that dropped in my lap reminded me why brands continue to choose data-driven incentive (Loyalty) programs to engage and retain customers. Far too many people that I have heard from are using travel aggregator sites like Hotels.com and Expedia to shop around and then login to their frequent guest account at the airline or hotel chain of their choice to book reservations.

To break the habit, Hotels.com had to do something and WelcomeRewards™ is an easy to understand program that delivers sufficient value change a few consumer minds.

Josh Stevens is the Groupawn, striving to live off Groupons for one year. If he’s successful, Groupon gains additional publicity in extreme fashion, all for the cost of $100,000 – the carrot in front of Josh until May 2011.

I’m neither a “WegPawn” or eligible for any incentive from Wegman’s, but I am considering moving in for the summer.

The Western New York grocery chain is ranked 28th largest in the US and # 3 on Fortune magazine’s list of “100 Best Companies to Work For” in 2010. In real terms they combine the best that Starbucks, Barnes & Noble, Panera Bread, and a host of QSR restaurants have to offer and provide a learning platform for any retailer hoping to drive brand loyalty and customer engagement.

And, Wegman’s seems to be creating its momentum absent of the typical array of grocery rewards programs used by competitors.

The interesting thing from a In the 2010 United States of America, there is an expanding group of people working independently and in collaborative teams to deliver high value at reasonable cost to Corporate America across a spectrum of service offers. I co-founded the Customer Strategy Network with this in mind and believe these consciously organized networks can be the tip of spear to drive innovation and efficiency in our economy over the next ten years. Chris Brogan shares an interesting post today on the meaning of independence in today’s business world which you might want to read to stimulate more thought on this subject.

With or without permanent office space, there is always the occasional need to get work done on the fly – whether on the road or in between business meetings. I don’t think Coworking was part of Wegman’s original business plan, but they offer an ideal platform for people on the move and in the process create customer loyalty for their core business.

Having just toured the East Coast of the US, I’ve had the opportunity to experience the merchandising approach of several grocery chains including Publix, Trader Joe’s, Whole Foods, Harris Teeter, and a few other smaller players. In my opinion, Wegman’s sits above them all in creating grocery loyalty, with beautifully organized stores, reasonable prices, a fantastic array of prepared foods, and a comfortable coffee shop and dining loft where customers can relax over a meal or pound away on their laptops using the free wireless Internet.

Wegman’s is not treating customer loyalty as a fad and as a result has been on the “Best Companies to Work For” list every year since it began in 1998. The company’s mission statement outlines three beliefs that define their viewpoint on what it takes to build customer loyalty and increase intrinsic business value over time. Some excerpts:

• “We believe that good people, working toward a common goal, can accomplish anything they set out to do”
• “We set our goal to be the very best at serving the needs of our customers. Every action we take should be made with this in mind”
• “We also believe that we can achieve our goal only if we fulfill the needs of our own people. To our customers and our people we pledge continuous improvement, and we make the commitment: “Every Day You Get Our Best”"

And the absence of rewards programs?

Wegman’s discontinued a punch-card style Coffee Club in 2007 (but still offers refills for $.50) and has de-emphasized its Shoppers Club, at least in practice. Jo Natale, Director of Media Relations, shared that Shoppers Club “is still very much active”, but “since we moved to consistent, low prices several years ago (in place of short-term sales), there are fewer discounts overall, because our prices don’t fluctuate as they once did”.

Am I a Wegman’s family member? No.

Is Wegman’s perfect? No.

Could Wegman’s be more creative in collecting and using customer data & reinvigorate a fading two-tier customer club? Yes.

Despite areas of potential improvement, is Wegman’s the best example I have seen of a grocery chain delivering on its brand promise & creating grocery loyalty through merchandising and store design? Yes!

Am I really moving in this summer? No, I really like my family and will save Wegman’s visits for those on-the-fly email check ups and when I want some really great food!