Of all the email that fills my box during the Christmas season, a survey will always get my attention.

In a research project conducted by Hanifin Loyalty in 2009, we found that across 22 rewards programs in the Airline, Hotel, and Retail sectors, only 1.56% of total email sent was a survey. Considering that a stated objective of most loyalty programs is to create a dialogue to better understand customer preference, that figure seems low.

Tropicana sent me a survey this week in connection with its Juicy Rewards program. It was brief and focused on determining which rewards were most appealing to members.

Loyalty Truth reviewed Juicy Rewards in this post and we noted that the value proposition was strong given the value delivered for money spent. Looking under the “orange peel”, the value is made possible as most rewards are discounts on partner purchases, rather than hard dollars or merchandise.

My Loyalty Asterisk™ – sense tells me that Juicy Rewards members might have engaged by entering lots of codes, but redemption is either low or members have complained about lack of choice. Whatever the reason, Tropicana was smart to inquire if I was interested in using my points for a sweepstakes, donating to a charity, or for longer term saving to cash in for a more substantial reward.

They probed for my tolerance in accumulating points over time, asking what types of rewards I preferred over a 1,3, or 6 month period of time. Lastly they asked about specific charities and reward types I wanted to see in the program and even allowed space to write in my own preferred charity and reward item. I doubt that free entries to a sold out Ironman event got many votes, but I made my voice known.

Where the survey missed the mark was in not asking who they were talking with.

Let me explain: My wife does most of the shopping and probably didn’t even notice the on-carton information about Juicy Rewards. If she had, she would not have taken time to enroll as she would not be the type to enter codes online.

Only this Loyalty nerd would squint long enough to read the small-print codes on the carton and then take time to enter them online just to see what happens next. A consequence of this typical household scenario is that my wife changed juice brands without notice a few weeks ago. Probably there was a coupon or special on another brand and she went with the savings.

Suddenly our consumption of Tropicana came to a screeching halt and our participation in Juicy Rewards probably reflected the shift in behavior. If someone was looking at the data behind the scenes at Tropicana, they would notice this drop-off and could have sent me an email nicely reminding me that they are still on the shelves of my local grocer.

Just as important, they should have started the survey by asking if I was the one who did the grocery shopping in my house and, if not, request the contact info for the family member who did. Not everyone would volunteer this additional data, but its worth a try.

Congratulations to Tropicana for sending me a focused survey and allowing me to express my opinions to improve the program in my eyes. Knowing who you are talking to is absolutely fundamental to creating powerful insights from data and Tropicana missed the mark here.

To improve most loyalty programs today, we don’t have to come up with the next brilliant idea, we only need to execute fundamentals with greater discipline and attention to detail.

That’s how you can squeeze more juice out of any database.

One of the blogs I enjoy reading is written by Chris Brogan. He’s got some interesting takes on social media and a huge following.

Today he stepped in the Loyalty Marketing sandbox with his post The Myth of Brand Loyalty. I won’t recount the story here and encourage you to read it as well as take in the comment stream which follows. There are a few good ones and you can read my take as well in which I reference how Airlines Take Flight Without Data.

To be fair, the airlines and Apple (Chris’ example) aren’t alone. We see it all the time….companies that have accumulated tremendous stores of data and are not using it to market efficiently and effectively. Or, as I witnessed this week in client meetings, there are banks with reams of customer satisfaction research, customer profile information, and transaction history that have studied it all, developed recommendations, but inexplicably have not put into action a measurable marketing campaign based on this information.

It’s not about capacity, it’s all about willpower. Corporate commitment to Customer Loyalty from the top down is needed for success and, where I can identify that commitment, I would personally invest in the related equity issues. These will be the winners in the market over the next 10 years.

Deregulation of the US airline industry in 1978 was intended to create a competitive environment that would benefit the flying public and bring profitability to the airlines. With a number of bull and bear cycles under the belt, 2009 finds the airlines continuing to struggle for profits, and consumers once again being punished just for showing up at the gate.

The airlines pioneered the loyalty marketing business, linking customer data, profitability measures, and the reservation system to change the way all consumer facing companies viewed their customer policies. Since American’s AAdvantage program launched in 1981, the airlines have awarded zillions of miles to loyal frequent flyers and have collected untold terabytes of customer data.

It is astounding to see that the data collected remains largely under-utilized. My latest mailing from American congratulated me on my status with them and included some offers marked “specially for you”. I was disappointed to see that the offers had no connection to my preferences and looked like this:

• Offer to purchase additional frequent flyer miles
• Bose QuietComfort 2 headphones offer
• Directv – switch and receive 10,000 miles
• A credit card offer (actually two different ones)
• A sweepstakes offer in connection with MyCokeRewards.com

Not only are the airlines missing a significant opportunity to engage their best customers based on data they already possess, they are eroding their value proposition by adding fees to multiple aspects of the in-flight experience as well as their frequent flyer programs.

A struggling industry should leverage the lowest cost assets they own and use this low-hanging fruit to generate profitability as well as engender brand loyalty. Why not take steps to use the valuable data they have gathered over time.

The favorite subject for most humans to talk about is “me”. Flyers are waiting to spill the beans on their preferences and all the airlines have to do is ask.

Ever since man has been on earth, we’ve been running. In the beginning, our motivation was the need for food, shelter, and survival. By the mid-twentieth century, pursuit of fitness through sweaty activities had become the domain of oddballs. Given the outlaw nature of adult fitness only 50 years ago, the origins of the 70’s running boom are remarkable.

Bill Bowerman, the one-of-a-kind University of Oregon Track & Field Coach, is most well known as the guy who shaped Steve Prefontaine’s front-running style into record breaking performances, and for having a hand in the founding of Nike. Few know that his chance trip to New Zealand in 1962 would lead to the jogging craze that swept America in the early 70’s.

Ask most people about running and they have an opinion – usually resolute and often diametrically opposed. The phenomena is so pervasive that New Balance has adopted it as the theme of its “Love and Hate” advertising campaign. Since I’ve logged about 35 years of pavement pounding, I can attest to man’s Cybill-like relationship with the sport. Some days the endorphins kick in and feet seem to float across the pavement. Other days, it just plain hurts.

In my experience, the most reliable anesthesia to dull running agony is to think. Allowing my mind to wander may have contributed to slower race times, but that’s another story. Through it all I’ve found that a good long run will clear the mind, spawn new ideas, and root out the solution for the problem of the day.

Soldiering through a 10K run the other day, I pondered the many ways in which independent retailers strive to breed loyalty and combat big box merchants. Punch cards and cash back discounts are the most common tactics used today. Listening to one merchant talk about his program recently, I realized that it was purely tactical, without strategic foundation, and absent specific objectives except for the hope that “more sales” would result.

As the ten kilometers that add up to the 6.2 mile run passed by, I assembled a list of ten questions that every retailer should ask when seeking to improve repeat purchase behavior and increase customer loyalty. The answers can be blended with a bit of “secret sauce” in order to give their Customer Strategy new meaning.

The 10 K’s of Retail Loyalty:

1. Who do you really think is your competition?
2. What does your Brand stand for?
3. How are you identifying customers today?
4. What are you doing with any data collected?
5. What are the objectives of your marketing efforts?
6. Are your offers coordinated to meet these objectives?
7. How are you communicating with customers?
8. How do you measure results?
9. Are employees trained to understand and promote the program?
10. What are you going to do next?

Marketing resources are scarce and, in a tough economy, every penny counts. Working through these ten questions will lead to a simple, yet effective strategy that any independent retailer can employ to improve their business.

It’s no sweat!

Bill Hanifin

That’s the cry heard from an increasing number of frequent flyers today. When primary research is commissioned to help diagnose the complaint, it may be surprising to learn that the same program features are often reported as both a Key Complaint and Delight.

Three examples:

Program Feature	Delight or Complaint
Options to earn miles	Lots or not enough
Ability to redeem miles for desired travel	Satisfactory or Impossible
Value of miles beyond air travel	Wonderful or Nil

These consumer opinions form a classic two edged blade that slices for or against depending on your point of view. To a great extent, the airlines and issuers of cobranded airline cards could do more to relieve frequent flyer angst.

Let’s take the issues sequentially:

In defense of the airlines and their card issuing partners, options to earn miles have grown to the point of near saturation. Miles can be earned on activities as diverse as sending flowers or obtaining a mortgage. It is well publicized that many airline cobrand cardholders earn the majority of their miles without stepping on an airplane. As a consumer, the complaint that not enough options exist falls on deaf ears. By making this statement, you serve witness that either you are not paying attention to program communications, or that you are not the best candidate to benefit from a frequent flyer program. In this case, your failure to redeem can’t be blamed on the Loyalty Asterisk™.

Consider the options to redeem mileage beyond air travel and hotel stays. After nearly wearing out my calculator, I can’t make the math work in favor of swapping miles for merchandise and magazines. In fact, the only time I have gone the magazine route is when I was striving to beat an expiration date on mileage earned with an airline I no longer frequent. In that case, I was willing to ignore the value exchange and was satisfied to get something for what otherwise would have turned to dust.

The complaint that “I can’t use my miles when I want” is the most delicate to correct. The early premise of frequent flyer programs was “travel now and take your family to Hawaii next Christmas” (fill in your own dream destination). And over the years, the sense of entitlement created by loyalty program sponsors has created a difficult fan base to satisfy. Let’s face it, the air travel experience has changed and consumer expectations for using miles should change as well.

The perceived value of air travel rewards has always been measured in emotional terms. Redeeming to attend a family reunion or take a vacation increases value, while redeeming to attend yet another business meeting is evaluated through careful fare comparisons.

I have not experienced difficulty redeeming miles for my desired travel destinations. It’s not because I am lucky, just that I try to match the destination with the season and am flexible on dates. Applying common sense to the process would help consumers tremendously and reduce frustration, but the airlines can play a big role in the process.

The challenge for the airlines is to tone down the aspirational messaging that has driven demand for frequent flyer programs since their beginning, and subtly reposition with a more practical approach to mileage redemption. Flying the family to Cleveland to visit friends may not play well in full page advertisements, but in today’s economy it represents a valuable savings to a family of four.

I humbly suggest that the airlines limit their promotion of exotic destinations where obtaining a seat with miles carries the same odds as hitting the lottery. Traveler preferences can be refined through use of the massive data the airlines possess and would allow the suggestion of secondary destinations to meet the needs of frequent flyers, reduce frustration, and increase the perception of value across the flying base.

The change is subtle and not easy to execute, but will pay off through higher customer satisfaction over time. The airlines have contributed to the present frustration with their yield management systems and can just as directly relieve the pressure by changing the focus on what constitutes a worthwhile reward.

Bill Hanifin

Building a reliable database is fundamental to successfully executing any form of customer centric or loyalty marketing campaign. List rental is a historically reliable method of acquiring names used by direct marketers. Opt-in approaches are a potentially lower cost means of building a proprietary customer database. Product warranty cards, e-newsletter subscriptions and registration cards are examples of commonly used collection methods and can all yield good results.

Ever wonder what it costs to acquire this valuable information? Turn the question around and ask yourself what names and email addresses are worth? To make it personal, what is YOUR information worth to a typical retailer?

How about $.50. Yep, fifty cents is the bounty on your head – at least that’s what I discovered the other day in a national coffee chain.

Standing in line, the manager called an informal meeting among front line employees. She challenged each person to collect 20 names for a bounty of $10. One stunned cashier swallowed hard over the thought of getting out of the comfort zone. Suddenly her expression changed as she asked a colleague “so, if I get 1,000 names, do you think they’ll pay me $500?”

The cost of building databases is an accumulation of several cost layers, with list rental and processing of registration or warranty cards being only the beginning. Assembling the computer hardware and licensing database software are capital costs that have to be incurred before the collection process is ever engaged.

Involving employees to fuel such an effort is sensible and providing incentives is highly recommended to drive results. Just don’t have your “management” meetings in front of your customers. It’s never good to let them know there is a price on their heads.