Online retailers have a uniquely difficult challenge in building relationships and creating customer loyalty. Without a store-front to rely upon, most online retailers lead with product selection and price to attract first time buyers.

This leaves many to rely on ad words and keyword search as their only acquisition funnel. Generating repeat business, building trusted relationships, and retaining valuable customers? Those three goals can become esoteric concepts to the marketing department as they  continually focus resources on acquisition for fear of muffling the principal sales driver that works.

The first wave of internet business placed the hurdle for marketing very low. Building traffic and gathering eyeballs was all that mattered and it seemed that selling this portfolio of traffic was more the goal than creating a business model on fundamental business principles.

Web 2.0 is different. The online stores that are working operate like a traditional retailer in the sense that they have to provide product choice, quality, and good service as a minimum to succeed. The business models adopted are generally sound and the achilles heel for those single channel, pure online, retailers remains price. Price as in LOW price.

Hammer Nutrition is one pure online retailer that caught my eye. The company caters to a well defined passionate customer group, endurance athletes. But they are not allowed the privilege to compete in a vacuum as many of their supplement and fueling products (electrolyte drinks, energy bars, joint formulas) are sold by larger, heavily branded, and more widely marketed companies from GNC to Power Bar (owned by Nestle) and Clif Bar (distributed through major grocery chains, Costco, and specialty shops).

How does Hammer Nutrition compete? It stays true to the values of its founder, Brian Frank. Brian grew up in California in a progressively-minded household and caught the action sport bug early on, riding bikes, skateboards, swimming, and racing BMX and motocross bikes to the point where he won Montana State Motocross Championships in the late 90’s. Frustrated by the sparsity of quality, naturally formulated products to meet the needs of endurance athletes, he founded Hammer Nutrition during the 80’s.

His mantra from those days has survived the passage of time:  Deliver naturally formulated quality products and cement customers for life with product knowledge and trust.

A little guerrilla marketing was at the core of the Hammer strategy: provide “Race Bags” at events around the country as a cost effective way to meet the core audience for Hammer products at their moment of highest interest. If you’ve participated in any organized athletic event from a local 5K walk to an Ironman, one of the “bennies” received for your entry fee is the race day bag. The bag itself carries branding on the outside and is kind of like the athlete’s version of an Easter basket – lots of product samples and surprises inside. When I spoke with Brian a few months ago, he told me that the program now distributes over 750,000 bags across 2,200 events in North America. That’s some powerful grass roots marketing – Word of Mouth advertising at its best before the term was coined.

The impressive part of the marketing strategy at Hammer Nutrition is its constant flow of educational and product information materials, part of an overall communication stream designed to build engagement and increase customer retention. A first order will usually trigger sending of the “Little Red Book” (product descriptions and usage instructions) and a “Welcome to the Family” letter signed by Brian Frank or one of his guru partners Steve Born or Dr. William Misner.

Triggered by an array of qualifying metrics, new customers receive monthly product-focused brochures, quarterly Endurance News magazines with articles highlighting athletes of all types who have competed successfully using Hammer products, and reminder post cards with previous orders outlined to facilitate easy reorder. Invitation to join the Autoship program is packed with benefits and discounts and the Referral program has a dual benefit feature where both existing and new customer earn a discount.

An open call to any athlete to use Hammer products is made via the HammerBuck$ program which challenges customers to “Turn race day into Payday”. Over $36,000 in cash and credit was awarded to 36 winners during 2009. The program is simple, race in Hammer gear, place highly in your race, and win some cash or credits for future purchase. Talk about crowdsourcing, just think about motivating gobs of your best customers who fit your ideal profile to wear your logo on race day and give it their all to stand on the podium at the end of the day!

Granted that I may have lost some of you who hate to run, or for whom the idea of an open water swim, adventure race or ultra-marathon is greeted with a wry smile while muttering “they’re nuts!”

Look past the issue of endurance sports and you will see a sophisticated, if not home grown, communication stream that delivers on the company’s brand promise while driving business goals. There are lots of good lessons for any pure online retailer to take away from a visit to the Hammer Nutrition web site.

A small firestorm over the efficacy of Loyalty Marketing programs broke out over this past weekend thanks in large part to an article written by Joanne Kaufman for the Wall Street Journal.

Ms. Kaufman recounts a telling tale of how her own household purchase behavior adapted to take advantage of rewards programs from Duane Reade to Starbucks to the local pizzeria and shoe store, only to be thoroughly disillusioned by an in-store experience at Duane Reade.

It seems that her son was shopping at the store and had his rewards card rejected with a less than satisfactory explanation from the cashier that Duane Reade was in a “blackout” period prior to launching a new and improved customer loyalty program. According to Ms. Kaufman, worse than the blackout message was the discovery that points previously earned in Duane Reade’s Dollar Rewards™ program would not be honored in the new program.

There are several lessons to be learned here and a few questions raised as well.

First, some background: On Jan. 15, Duane Reade announced it was launching FlexRewards™, a replacement program to Dollar Rewards™, the Company’s previous customer rewards program. The new program was to be in effect on Jan. 16. On Feb. 17, Walgreens announced that it was acquiring Duane Reade, the largest drug store chain in New York City.

The Questions:

1. What influenced the timing of Duane Reade’s launch of a new program when they were (presumably) deep into the final negotiations of the sale?
2. Regardless of the answer to #1, how could someone within Duane Reade, a company recently complimented for its customer facing marketing efforts, have been lulled into allowing the “your old points don’t count” feature to come into play? Have a look at the message on the graphic here “The old card works (just not in our store). I clicked everywhere I could on the program website and could not find an explanation for this disconcerting message.
3. Could Duane Reade have found a better way to communicate the program transition to its members? Why, oh why, does business place the burden of communications on cashiers at the point of sale? It’s an unfair burden on the position with highest turnover in the store and one that does not serve the corporation well.
4. Walgreens has a lightly advertised rewards program “Walgreens Rewards“. Will they do away with this program or will they launch something that allows consumers to earn and accumulate points at any Walgreens-owned property?

Some answers are easier to guess at than others.

The announcement by Walgreens regarding Duane Reade mentioned specifically that it would allow the chain to continue to operate under its own name. That said, launching an upgraded program might have seemed business as usual to Duane Reade marketers. Needless to say, there needs to be some damage control from Duane Reade as an operational faux pas of this nature intensifies consumer ire towards consumer rewards programs.

The most interesting question to speculate about has to do with the future of the Walgreens customer strategy.

The current program “Walgreens Rewards” offers rewards on specified products purchased using a Walgreens Card®. The value proposition does not seem clear or particularly strong and there are many product restrictions which limit earning power for members. One strong program feature is the ability to pass the Walgreens Card at the point-of-sale and instantly be credited for rewards.

As far the new Duane Reade program itself, it seems that the earning power from its predecessor has been reduced. The current offer is for customers to spend $250 to receive a $5 cash back offer. This equates to a 2% earn rate, less than the 5% offered by the previous plan according to the WSJ.

FlexRewards™ offers members lower prices on many items and rewards that can be spent on the spot at point-of-sale or can be saved up for larger rewards. Clumsy paper coupons which could be easily lost by consumers have been traded in for electronic points tracking online. Points issued never expire provided a purchase is made every 26 weeks, a generous definition of an “active” customer in the pharmacy space to be sure.

According to Joe Jackman, Acting Chief Marketing Officer, Duane Reade “customers had spoken and wanted more easily attainable rewards”, adding “half of customers in our old program didn’t even redeem their reward coupons because there were too many restrictions”.

It certainly seems that the strategy cooked up by Duane Reade is headed in the right direction and had increased customer engagement as a key objective. The company even introduced a new “Super Saver” tier to reward higher spending customers at a faster pace and with more flexible rewards.

Contrast the two programs at Walgreens and Duane Reade and you should not be surprised to see either the Duane Reade program extended (in structure if not by name) to include Walgreens stores or some new program from Walgreens that would at least improve upon the current offer. The more inclusive, the better as customers will respond well to a program that allows points accumulation at both Duane Reade and Walgreens stores.

Lessons:

1. Execution nearly trumps strategy these days.  My old boss, Pat LaPointe, coined the phrase “Technology enables, but imagination wins”. Based on what clients are telling me today, I have modified the mantra this way: “Technology enables, imagination wins, but flawless execution will save your job!”.

2. Expectations for Customer Communication are higher than ever. Consumers have access to more information than ever and expect clear, transparent messaging. Anything less sets you up for what Ms. Kaufman called “Loyalty Betrayal”.

3. Staff training and incentives will trigger better program results. Turnover at the point-of-sale is difficult to control but an effort can be made to provide front line personnel with sales aids, inexpensive “take-me’s” and similar POS material to make the job easier for overburdened staff. Offering incentives for those that learn and deliver the message would help also.

Just a few months ago, on these very Loyalty Truth pages, I gave kudos to Caesars Atlantic City and its Total Rewards loyalty program.

During some trying times for the economy in general, and Atlantic City in particular, Caesars AC was making some smart moves to get its loyalty program members back to the casino.

Last week, Caesars AC got my attention again. But not in a good way. You see, they ran a rather bizarre full-page ad in the Sunday NYTimes magazine.

Let’s start with the image in the ad: a well-dressed 30-something guy has a pretty woman to his right. She has one hand on his shoulder and another wrapped tightly around his arm. It looks like they’re at a show. Okay so far, except our guy seems more interested in another woman to his left. He has his lips to her ear and her extended arm appears to be resting on his thigh.

Under the headline “The Life You Were Meant to Live“, the stilted copy reads:

Who is that in Section A, Row 1, Seat 5, having the time of your life? That’s Todd. Flanked by your fiery vixens. Paying no attention to your favorite band on stage. But give credit where it’s due. Todd is an escape artist. And when it’s time for a getaway, he get it’s right.

What!?!

Putting aside the confusing use of the possessive “your”, who are the fiery vixens with Todd? Am I supposed to pretend I’m Todd…on some kind of a three-way tryst? Is this what they mean by “he gets it right?” More importantly, did Caesars’ market research show the ménage a trois market to be a growing demographic?

Personally, I can only think of one word for the ad – Stupid.

Instead of creating a scenario that the largely upscale readership of the NYTimes magazine might be able to imagine themselves in, they’ve come up with a fictional character in a contrived situation that’s a non-starter for anyone not in the “swinger” category.

It of course begs the question, what were they thinking? The only thing I can come up with is that Caesars AC is trying to out Vegas-Vegas.

Sorry Caesars, as much as I like you and your loyalty program, you’re no Vegas. And there are better ways to spend your precious marketing dollars.

Tom Rapsas is a 20 year direct and loyalty marketing veteran and heads up Creative Services at Hanifin Loyalty.  He can be reached on Twitter @tomrapsas

Trendy business buzzwords aren’t any fun until you form an opinion and seek feedback to get to the substance of the issue.

Customer Engagement is one of those terms that is being mentioned more frequently than Kim Kardashian was during the Super Bowl. It’s the 2010 version of “what’s hot, what’s new, what’s next?”

The question is, should Customer Engagement be treated as a new marketing sub-set, on par with Loyalty and Word of Mouth Marketing, or is it a concept that’s been around for quite some time and just happens to be a point of pain in the Relationship Value Chain (RVP) for marketers today?

Relationship Value Chain? That’s the term that my good friend and former Colloquy colleague, Kelly Hlavinka, coined almost 10 years ago. The experience of many at the once proud Frequency Marketing was that customer value increased across a spectrum of customer interaction. Link the points of interaction and you had a value chain that loyalty marketers could use to influence communication plans and allocate marketing budget dollars to encourage specific behaviors.

The RVP is similar to the “acquisition – activation – usage – retention” lifecycle marketing that credit card issuers have been using for years, but takes objectives down to a more granular level.

One example of a flow that constitutes a RVP:

• Awareness
• Response to Invitation
• Program Enrollment
• First purchase
• Multiple purchases in response to offers
• Redemption for Reward
• Response to Survey
• Response to Future Bonus
• Multiple Redemptions

No one has a lock on defining the steps in the chain as they should be customized to the business situation under review. Going to back to Customer Engagement, just where does it live in the value chain used as an example here?

Let’s look at a few steps in the RVP and see where, if accused of being “Engaged”, there would be enough evidence to gain a conviction!

Program Enrollment – Doesn’t everyone enroll in programs without much care for future interactions? I enroll in just about every program where I know the odds are that I’ll be back (by choice or force) and the offer looks worthy enough to give it a whirl. The only caveat is that I won’t sign up if the data collection hurdle is too high at the outset.

First Purchase – You’ve got my attention, but what makes you think I’m “Engaged”? I may be a cherry-picking consumer or have just satisfied a one-time need for your product or service. Not enough evidence to convict me as engaged at this point in time.

First Redemption – I’ve stayed around long enough to make multiple purchases over time – how else would I have qualified to redeem? But did you catch me in a cycle of life that won’t soon be repeated, or can you count on me to do it again? Engagement? We’re getting closer, some say “yes”.

Survey Response – I’ve transacted, collected, redeemed, and now I am willing to actually have a conversation. You’ve got my attention, but I am skeptical of what you will do with the information and if I will hear from you again. Does this sound akin to dating? Conversation is certainly an accelerator to engagement, but does not constitute the end goal itself.

Multiple Redemptions – Once I’ve completed the purchase/collection/redemption cycle more than once, I think you can count me as “Engaged”. The focus shifts now to retaining my interest, expanding the conversation, and developing more business as a result.

My take on Customer Engagement is that it describes an end objective that marketers hope to achieve through smart execution of a well designed data-driven Customer Strategy. If you try to define engagement as one of the individual steps, take Enrollment as an example, then what you are truly talking about is more tactical ala “how to create awareness for a program and convert interest to enrollment”.

It’s a step along the way, not engagement itself.

The Loyalty Truth on Customer Engagement is that it has been around for quite a while. The reason the topic has been deserving of the spotlight lately is that customers are increasing difficult to engage, not to mention retain.

What’s your take?

In the past week, business has taken me to Vancouver, BC and San Jose, Costa Rica with a pit stop in South Florida for a day or so at home. None of that was a big deal until my colleague Mike Atkin noted at dinner that we’ve been hitting these spots in conjunction with some pretty big events.

We arrived in Vancouver exactly one week before the start of the 2010 Winter Olympics, landed in South Florida the day before Super Bowl XLIV, and arrived in San Jose on election day as the country was electing the first female President in its history. I’m not sure how I can top that although I have noticed that I arrive back in SoFla just in time to make Valentine’s day special for my wife. Better pull that one off!

I’ve also been using Foursquare for a while and, like a lot of social media waves, I engaged knowing that it would cost me a little time without being sure of a return. I’ve been having some fun with it around my local haunts and have been thinking about how something like Foursquare could intersect with location based offers as part of a loyalty marketing program. My first eye-opener was the blending of Foursquare and Twitter into the Tasti D-Lite rewards program which I talked about in a recent post.

This last jaunt across the continent and back connected a few dots. Checking in to my hotel in Vancouver, I saw a pop-up on my iPhone that said “Special Nearby”. Clicking through, I read “Welcome to the Mill Marine Bistro & Bar. Mayor receives a free beer. Show your server to redeem.”

I wasn’t the Mayor and didn’t get a free beer, but Mike and I did visit the nearby pub to have a quick dinner. The point made was that promotions relevant to someone’s stay could be delivered via this little iPhone application. Better yet, these offers are made to people who have opted-in to receive the offer. in this case, the Mayor might game the offer to get lots of free beer and over time I hope the restaurant will become more creative in the offers made, possibly targeting guests at the hotel next door.

Landing in FLL a day or so later, I switched on the phone and “checked in” to Fort Lauderdale – Hollywood International Airport and received a tip from a local attorney, Leland Garvin. On the verge of the Super Bowl weekend in SoFla, what better message could an attorney send than (paraphrased) “Have fun while in town, but if anything happens from arrest to a speeding ticket, call Leland Garvin, attorney at law.” A phone number was included and if I was a “Who Dat” ready to tear it up for the Super weekend, I would have written it down and tucked it somewhere safe.

With lots of minds grinding on how to incorporate mobile marketing, location based promotions, and social media into loyalty program communication streams, these two “pops” from Foursquare got my attention and sparked some good ideas.

Consider the possibilities. What’s it make you think about?

After spending the last few weeks thinking through reasonable responses to my new favorite question for 2010 “Do you think Social Media is here to stay?“, I’ve recently been re-directed to my “old” favorite question that I have been answering for 12 years “Do loyalty programs work?“

Without disappearing completely down that gopher-hole, I’ll just say that there is enough discomfort in using the “L” word that industry insiders are redirecting the conversation to new labels. Is it any wonder why Customer Engagement has been the buzzword of the year?

Lifecycle marketing in the credit card business has always hinged on the “Activation, Usage Retention” triad. In retail, there is a similar flow with “Awareness, Visit, Purchase, Return“.

I believe that within these lifecycle flows, Customer Engagement has always existed. Activation can be broken down into Awareness & Engagement leading to Activation. You get the idea.

So why is Customer Engagement being given so much attention these days? Maybe because marketers have always found it one of the toughest steps to effectively manage in the relationship value chain. And, maybe it is because in 2010 the job is increasingly difficult as consumer attention spans are shrinking each day.

Not too long ago, I went to see the end-times movie “2012″ and the challenge of customer engagement was made crystal clear. As the final scene faded out, the entire theater full of patrons jumped to their feet and headed to the exits. As I sat comfortably watching the credits scroll by, I noticed that I was literally one of three people still in my seat. I had noticed this behavior before, but finally connected some dots.

You see, consumer attention spans have been shrinking for several years and the pace of shrinkage shows no sign of slowing down. The question is: how do marketers hope to create and maintain “customer engagement” when “customers” (us) can barely pay attention long enough to change the channel?

With tongue only slightly in-cheek, I believe the slide in customer attention span all started with USA Today. The snippet-based paper lowered the bar for people to gather their news, requiring them only to read a paragraph or two and then turn the page. After a while, reading a news story in the New York Times seemed like sitting down to crack War and Peace.

The die was cast and a new standard was set for how consumers gather their news – short entertainment-driven sound bytes that could be absorbed while multi-tasking negated the requirement for thought or analysis. Now we have a “crawler” on everything from CNN to ESPN to summarize our news for us, and we are sharing our subjects of interest with friends through quick SMS messages and IM blasts. Even the outflow of natural disasters as recently occurred in Haiti are threatened by our short attention span.

Compress the communication further by limiting our messages to 140 characters on Twitter and it is clear that there is more emphasis on the announcement than the content inside. In the business world, we are increasingly asked to summarize key thoughts and initiatives into “one pagers”.  Weeks & months of work on strategic plans are being distilled into executive summaries that are shorter by the day. It almost seems as though even a brilliant business plan or strategy is doomed unless there is an effective elevator speech to go with it.

The trends we have seen in Loyalty Marketing include members who want to achieve award status quicker and redeem more often for smaller “attainable” rewards. Converting points for cash back certificates at the point of sale is high on the list for many program operators.

If you agree that attention spans are compressing daily and our own internal communications are being driven by 3 PowerPoint slides and a “one pager”, what tactics can we hope to successfully employ to engage our customers?

I think the answer is two-fold:

• First, we can go back to social media – as we might just have to meet people “where they are” rather than hoping to bring them into our web, our way.
• The second is to never forget that every house has a kitchen table or something akin to it. People still gather and enjoy each other’s company in informal settings. Putting a catalog or brochure on their kitchen table gives them something to talk about – YOU. Personalizing that catalog based on known behaviors makes it even more of a conversation piece, once opened.

Pairing these two unlikely partners – Social Media and Direct Mail – might just work. Give it a try.

In case you’ve been going to sleep early these days and you’ve been missing all the buzz on both Facebook and Twitter about what’s going on in the late night TV world,  NBC “Promoted” Conan O’Brien to the big chair of late night, The Tonight Show.  But for some reason, they wanted to keep Jay Leno in the NBC fold and put him in a prime time 10 PM slot before the local news.  The reasoning for this is very simple.  Producing one show with one star is 100 times cheaper than producing five quality prime-time shows with multiple casts, crews, directors and teamsters for five 10 PM prime time slots.

After a very short run, a simple domino effect is in play.  Leno “failed” in the 10PM time slot which led to lower ratings for the local news and lower ratings for The Tonight Show. NBC Failed to provide good shows before the local news. And now, it seems that rather than accept responsibility, the NBC execs have thrown the blame on Conan.

Was this Conan’s fault?  Maybe a little.  He didn’t ask about the prime-time line up and his lawyers didn’t go through his contract with a fine tooth comb.  Conan has a pretty iron clad contract BUT they missed the detail of what time the new Tonight Show was supposed to start.

“I believe that delaying The Tonight Show into the next day to accommodate another comedy program will seriously damage what I consider to be the greatest franchise in the history of broadcasting. The Tonight Show at 12:05 simply isn’t the Tonight Show.”  - Conan O’Brien

“I left NBC prime-time the same way I found it: a complete disaster.” – Jay Leno

Considering what happened when Johnny Carson left the Tonight Show and the fallout between Letterman and Leno and now with the flip flop between Leno and Conan and back to Leno again, NBC is losing trust within the industry and Loyalty with its viewers.  And if NBC screws over Conan after what they did to Letterman the last go around, who’s going to want replace Leno AGAIN?  If Leno failed in a prime time slot why is NBC giving him a 30 min show at 11:35 going to help the Tonight Show or NBC?  What’s the point?  Carson didn’t do anything to compete directly with the Tonight Show when he left.  Why let Leno compete at all?

I'm with Coco

This can either go down as the biggest disaster in TV history; bigger than when NBC passed Letterman over for the Tonight Show gig, bigger than when NBC Let Star Trek the original series die in 60s, or it’s a fiendishly brilliant viral marketing plan to boost NBC’s lagging ratings (wishful thinking on my part, but we can hope right?).

Where is everyone’s Brand Loyalty?  Is it with NBC, Leno or Conan?  There’s no apparent popular effort to bring Leno back to the Tonight Show – but there is a whole lot of buzz on the Social Media web sites in support of Conan.  Simply put, NBC would be stupid to let Conan go. He would most likely end up on either Fox, ABC or, even worse CBS, where he could team up with Letterman and later on replace him on his show.  Everyone in Late Night is getting a leg up except for Leno and NBC.  Needless to say, I’m with Coco.

Dean Bairaktaris – The Greatest Living American Dude: Evil Power Digger, SEO Consultant, Social Media Maverick, Web Developer and Elite Space Monkey in Fort Lauderdale, FL. Think Green.

I read some really great year end posts during the week leading up to New Year’s Day. Amidst the “Top 10/50/100″ lists, there were thoughtful, humorous, and motivational takes on how to evaluate 2009 and approach 2010 with energy and enthusiasm.

One or two that caused me to take my finger off the mouse and pause for a second read-through had to do with the pace at which we work.  The net-net message was that those people who work around the clock, never take their eye off the ball, and keep their energy switch constantly in the “On” position, will achieve the highest level of success in today’s always-connected world. One post went further, bragging about the pace they were keeping and implying that if the reader isn’t doing the same, you could count on falling, not only out of the race, but off the competitive map.

While there have always been overachievers and workaholics in our midst (and I admit to being in at least the first category), this year’s version of the “never take your foot off the pedal” message was heavily influenced by our steady adoption of social media. After two solid years (or 3?) of absorbing social media serum into our blood stream, we are a people possessed. Possessed by activity, by multi-tasking, by to-do lists, and by immediacy.

My take on how we interact with social media and other technologies – and how we advise our clients to interact with them – is that we have to remain constantly vigilant about who is in charge.

• Do we own the blackberry/iPhone, or does it own us?
• Does a ringing phone cause us to drop eye contact with a prospective customer to see who’s calling?
• Can we manage our social media presence as part of our work day, or does social media become our day?
• Are we creating another reason to procrastinate on tasks more closely correlated with revenue generation than SM so-far?

Don’t get excited, I’m not walking away from continuing to build social media communication strategies as part of my client’s customer strategies, but I am advising people to keep things in balance. If you’re not convinced, I have two resources to share with you, one older and more current.

The more time that goes by, the more I applaud the brilliance of Stephen Covey’s 7 Habits of Highly Successful People. Covey encourages people to prioritize the “critical” tasks of the day ahead of the “important”. In plain English, I am always going to complete and deliver a promised deliverable for a paying client before catching up on my Twitter email or posting to this blog.

The second resource is evidence of a growing body of evidence that multi-tasking is just not good for us as human beings.

• I saw the first commercial from a wireless company discouraging texting while driving over the holidays. Congratulations to Verizon on that ad which you can see here.
• The Harvard Business Review published an article during 2009 on “The Dangers of Distraction” and I have read other summaries of research that indicates we humans do our best work in linear, not multi-threading style.

With all the attention given by Marketers today to Customer Engagement, the issue of attention spans is critical to understand, dissect, and integrate into our communication plans. Our success in reaching and building loyalty with Generation Y (the Millennial Generation) is highly dependent on our commitment to addressing this key issue.

In my opinion, we need to build some space into our own lives if we are to successfully design and execute effective strategies for our clients. Building space into our lives means that we need to create some “margin” in the day. You know the one inch or so of white space around the typical page full of copy? Well, we need to put a version of that into our calendars, drop the to-do list to the ground, and reside peacefully there for enough time that it takes to refocus on the strategic, the critical, and the longer term view.

I’ve got lots more to share on how to drive Customer Engagement in an over-stimulated consumer environment.

Stay tuned.

Atlantic City, the famed gambling Mecca about an hour down the coast from me, is on a nasty losing streak. A recent story in the NY Times quoted a top gambling executive as saying “the city is in a death spiral.” Few disagreed.

It seems that after a rough couple of years, 2009 is looking even worse. Every Atlantic City casino but one is seeing a double-digit drop in revenue. The lone exception being the glitzy, feels-like-you’re-in-Vegas Borgata, which is down about 5 percent this year.

The reasons for the decline are many: the rotten economy, competition from newly opened gambling operations in nearby states, and the fact that Atlantic City, like the dwindling number of day-tripping seniors who bus into the city each day, is feeling old and tired.

The most-talked about solution: a cash infusion of a few billion dollars to build new hotels, new attractions, new anything that can start pulling in people again. Which, with the current economic environment, is as likely as me filling a double inside straight flush at the poker table. Or not very likely.

Harrah’s Entertainment ups the ante

In years past, I’ve frequented the Borgata where I’m a member of the My Borgata Rewards program. But on my last two trips into Atlantic City, I ventured to the swanky but hip Caesars, where I joined Total Rewards–the casino loyalty program from  Harrah’s Entertainment, the company behind the Harrahs, Caesars, Bally’s and Showboat casinos.

It appears that Total Rewards has upped the ante over the My Borgata program, by rolling out the red carpet for program members. My evidence here is strictly anecdotal, but I (and a good friend) recently received a bump up not one, but two tier levels to Diamond status. I also received a pair of free weekday hotel stays. (Surprising because, trust me, a high roller I am not.)

It’s obviously a play by Harrah’s Entertainment to get past customers back to Atlantic City and it’s either a smart move or a desperate move, depending on your perspective. I say smart—because rather than gamble on an expensive, and to my thinking, ultimately wasteful mass media campaign, Harrah’s is appealing directly to its customer base for more business.

Granted, they’re digging deep into the base by giving a two-time visitor like me special favors, but my guess is they’re mining the data for a few things: the recency of my visits, my perceived spend level, and my zip code, which tells them I live nearby and should be at a certain income level.

So can Total Rewards really save Atlantic City? It’s a lot to ask of a loyalty program, but it strikes me that Harrah Entertainment is playing the hand it was dealt—and reaching out to its customer base may be its last, best hope. I, for one, hope it works. In fact, I’m about to book a free night for my wife and I right now.

Now, a few words about the Total Rewards communications

The first good thing I can say about Total Rewards is that they actually have a communications program in place. As a member of the My Borgata program, who opted in for e-mail, I cannot recall receiving the first piece of communications from them, digital or otherwise. (It’s good to be King!)

While the Total Rewards postcard and e-mail creative is perfunctory, they do some small but important things right. They recognize me by name and tier level, and occasionally by the casino I visit, Caesars. They’ve also made attempts to cross-sell me into other areas of the property, including their dining and entertainment venues.

But the Total Rewards communications could go even further. A few thoughts, for the people behind the program:

1. Pump up the engagement: I checked and Total Rewards has a presence on both Facebook and Twitter. Why not add these links to every e-mail? And while you’re at it, add an “invite a friend to join” link to each e-mail, as well.
2. Talk to my preferences: I know your part of the Harrah’s empire, but frankly I only joined the program because I like and visit Caesars. So more info on Caesars and less on Vegas and the other brands please.
3. Leverage the community: I know starting your own online community may be a hassle you don’t want to contemplate, but why not use some of the glowing testimonials found on social travel sites like Kayak and Virtual Tourist. This both encourages loyal customers to return and invites them to join the conversation.

Tom Rapsas is a Creative Director/Writer/Strategist. He can be reached at tomrapsas@gmail.com and via Twitter @tomrapsas.

At times, Marketers can be real Bozos…….or is it BOGOS?

Striving for creativity can unleash the best and worst in marketers and while I’m not afraid to make mistakes, I try to avoid outsmarting myself as much as possible.

Folks working in the marketing space will agree that we have to be sharp as tacks to stay ahead of our customers. The possibility of successfully slinging out points or miles as a temporary bribe is declining by the day. Loyalty Marketing has to evolve beyond the idea that every customer has a price on her head and re-focus on a broader value proposition.

A critical element of delivering the value proposition is communications. We have to grab consumer attention and hold it just long enough to make our point. That forces marketers to reach further for something new and often the results don’t translate well.

The question: is it a good or bad idea to use our own lingo in the ads we create?

Driving down a crowded South Florida highway this week, I saw a huge billboard with an ad that shouted “Publix BOGO” and included the URL needed to find the deals of the week. The same day, I caught an ad on TV from Payless Shoes that touted their BOGO offers. A quick search online revealed that Kohl’s and a few others are running on the same track for the moment.

As a consumer, I don’t mind finding deals and saving money. And the billboard did grab  my attention. It just struck me that a little success in using “insider’s” verbiage could unleash a wave of awkward ad copy.

So, while it’s kind of cute-sy to adopt our trade lingo in customer facing ads, I don’t know how far we should go and, in particular, if the idea translates to Loyalty Marketing.

Imagine if we tried any of these in our promotional emails for our rewards program:

• Earn quick and enjoy the burn!
• We offer the  highest earn velocity around!
• Help us lower our CPA and we’ll give you more CVP!

It just doesn’t translate well, does it?

Ouch, was that my foot that I just shot?