In business, there are things we believe in, things we sell, and things that work.

In a post last week, David Slavick offered advice to retailers on how to prepare and manage a “deal of the day” offer with Groupon, Living Social and others assembling collective buying discounts. That great information will be followed in the next week with a concise go-forward planning methodology useful for any retailer.

Meanwhile, the daily deluge of deep discounts continues to flood our email inbox. I have noticed the range of offer sponsors to be widening, now including Chiropractors and other medical professionals as well as the local newspaper. National restaurant chain Quiznos has created a campaign with Groupon intended to blend the traditional punch card offer with the discounts expected from collective purchase.

The Quiznos campaign is positioned as a way to create repeat business via the Groupon model but let’s see how that goes. If I were privy to the data, I would be interested to understand how many single-use cherry-pickers are converted to multiple-use cherry-pickers.

I’d also like to know if the element of captured loyalty (I’ve paid for 8 subs and had better use them up) results in continued use after expiration of the Groupon or if brand boredom takes hold and these same customers don’t come back for months. It’s all entirely possible.

Amidst all the Groupon-like activity (the term has nearly assumed verb status in the same way as Kleenex, Xerox, FedEx), I received an email from Best Buy touting (gasp!) a 10% discount on a variety of products leading up to the Memorial Day weekend.

I have to wonder openly if a 10% discount, with restrictions by product category that require reading of the “smaller print” are still changing consumer behavior these days. There are a few possibilities:

1. Best Buy is smarter than the rest of us: If your numbers tell you that 10% works, why play the deep discounting game? Doing so would be akin to creating a Facebook Fan page with no idea why you are doing so.
2. Best Buy is weathering the deep discount storm: Hoping that collective buying is a fad that will go away soon, the company could be persevering with proven tactics hoping to preserve margins as long as possible.
3. Best Buy is asleep: Sure, they could be missing the boat, watching as the market moves away from them, but this is highly doubtful. The folks in Minneapolis are very good at their trade and the collective buying storm has mostly been directed at local merchants rather than national chains, Gap a notable exception.

For many retailers, 20% has been the magical number at which consumers give attention and reach for their wallets. 10% is just plain uninteresting in my book and the fact that I have to spend time to understand which products qualify is mildly annoying.

The attraction of coupons to me is clarity – WYSIWYG – but offering coupons is a mercenary game in which the bigger numbers get the most play. It’s also a highly destructive game – to profit margins that is.

Though collective buying is “something we sell” and “something that is working” these days, I’d rather advocate “something I believe in” which is integrated customer strategy that yields measurable results over the long term.

Let me know if agree or disagree. That’s why Wordpress includes a comment box!

On the same date of this post, two news items hit that are worthy of an update: Groupon filed for an IPO valued initially at US750 Million and also floated another offer with a national merchant chain, this time Old Navy.

When I’m working with any of my business partners in the Customer Strategy Network, whether from the UK or New Zealand, I’m used to being treated as a second class citizen.

There is something about the British-influenced accent and manner of speech that simply makes everything they say sound more intelligent than my best shot. At the least, we like to jab each other about this in fun, but the truth is, my foreign counterparts have a knack for getting their message across.

Yesterday as I opened white mail from Office Depot’s Worklife Rewards® and email from Best Buy’s Reward Zone®, I was struggling to put my finger on how the two programs contrasted in their management of member communications. My English friend cleared it up for me in one pithy phrase by saying “people don’t like fiddly things”.

When it comes to maintaining customer engagement with rewards and loyalty programs these days, nothing more telling could be said.

That day, I received a threefold brochure from Worklife Rewards informing me that I had earned a reward for $11 and included a plastic card that I could take to the store and use to redeem against purchase. The brochure provided a mini-statement of my account as well as some partner offers from 1-800 Flowers, Ameriprise Financial, Budget & National Car Rental, and LaQuinta.

The communications piece was easy to read, got to the point, and the delivery of the reward got my attention.

On the same day, I received an email from Reward Zone informing me that my account needed activation. This was strange to me as I have had an account with Best Buy since the program opened over 5 years ago. The next day I received an email from Best Buy offering me their cobrand credit card, but referencing a different reward account number. Strange as well.

I’ll save you the details by saying that a duplicate account had been created through one of my purchases and only after multiple attempts to login to both accounts and a phone call to the customer service center was I able to resolve the matter.

The good news is the matter was resolved. The bad news is that I don’t think many people would have taken the time and exercised my patience to endure the process. I’m a Loyalty Geek and had I not been looking into this for business reasons, would have disconnected with Reward Zone and given the program no further attention or energy.

Loyalty program sponsors and operators need to constantly seek out the “fiddly things” in the member experience and seek to streamline and simplify that experience with the objective of keeping consumers in love with their brand and their rewards program. Best Buy had a few too many Loyalty Asterisks in the process for my taste and I’m sure these Fiddly Things would have driven the average customer mad, causing them, in English parlance, to “bugger off”.

Don’t let that happen to your brand.

I’ve gotten into a bad habit with my children. Whenever they ask me about overzealous promises from a product advertisement, I just tell them “It’s probably not true, it’s just marketing stuff“.

The bad part is that I am instilling a degree of cynicism in the little ones, but then again “buyer beware” has served us well for decades. To get their money’s worth, consumers need to be cautious, if not skeptical, of claims made and should complement personal research with word of mouth recommendations where possible.

My broad-brush description of marketers can be justified simply by witnessing the lack of loyalty transparency in favored market practices today. I really don’t want to read an email telling me that I can earn a 10% rebate on “all purchases made” only to click through and see that there is a monthly dollar cap on my savings. I also don’t enjoy seeing items priced “less mail-in rebate” while I end up paying a higher price at the register and later struggle with paperwork to realize the savings.

To its credit, Best Buy has partially broken from the mail-in rebate habit as it offered 5 Android smartphones at an introductory price with no strings attached.

In the B2B world, the use of whitepapers as the bait in email solicitation is becoming highly annoying and merits a huge Loyalty Asterisk™.  Just this week, I filled out a form to receive a “Whitepaper” from Socialtext covering critical requirements of enterprise social software. Thinking I was going to learn something, I realized as I was reading the document that it was not much more than a capabilities document for their own product reformatted as a whitepaper.

It is a simple and often used formula – take the key features and benefits of the product you are selling and create an outline that proclaims the same key points as “best practices”. The Loyalty Asterisk™ remains prevalent in advertising and promotional circles today and marketers need to accept that building campaigns with roots in gently misleading the public does not breed long term customer or brand loyalty.

In the words of Generation Y (Millennials) it’s “annoying”! Translated, it means “I’m not buying your stuff!”

If marketers are selling quality, performance, and reliability as part of their product or brand promise, then they need to deliver the message with a higher degree of transparency than is seen today. I consistently advise my clients to deliver offers with accurate pricing and all conditions proclaimed up front rather than play the bait and switch game.

The beauty of Web 2.0 and social media in particular is that consumers have the tools and communications channels available to be able to research products, compare opinions, and provide feedback to friends in an almost instantaneous manner. Brands that market with a heavy dose of the Loyalty Asterisk™ will be skewered on Twitter, Facebook, and in the blogosphere.

Rather than play the game and suffer the penalty, marketers would be wise to play it straight, exercise some Loyalty Transparency, and enjoy the complements and adulation of consumers as they award the brand for delivering just as promised. If you are running your business without social media tools to monitor brand mentions and conversations, you need to step up your game.

Adopting the right tools and building a commitment to marketing transparency will yield improved results. I am here to help you with both endeavors.

The 21st Annual Card Forum took place last week in Marco Island, Florida. The conference synopsis which follows was originally published at www.TheWiseMarketer.com as filed by Bill Hanifin, North American Contributing Editor.

Register here for a free subscription to the Wise Marketer

The 21st Annual Card Forum and Expo has recently been held in Florida and, while the banking and card markets in the US might be reeling, the quality of presentations and attendees was superb.

Bill Hanifin, Managing Director of Hanifin Loyalty, reports that according to Bruce Kerr of Loyalty One USA and Laurence Booth of Amex Bank of Canada, the loyalty market in Canada is “holistically engaged”, with some nine in ten Canadian households actively engaged in a loyalty programme (the US figure is one in three). In order to break through the clutter, Amex has worked with Air Miles Canada to revamp and relaunch its Platinum Credit Card in 2008, breaking through the traditional co-brand model, with gratifying results.

According to Jim McCarthy, Head of North American Financial Institution Sales, Visa, payment cards are making inroads into cash and cheque payments which, in the US, have seen their share of annual Personal Consumption Expenditure fall from 61% to 47% over a few years. Consumers increasingly shop on value, are in control of their commercial relationships, and are tending toward more judicious use of credit cards.

According to McCarthy, the debit card will be the key product going forward for most issuers. He reaffirmed that rewards and loyalty programmes are here to stay and that providing value and control while encouraging responsible choices will contribute to overall card loyalty. McCarthy quoted a Wells Fargo study among university students which revealed that, as the result of a financial literacy campaign, late fees in the test group dropped 42%, overdraft charges were down 40%, and past due accounts declined 55%, while card volume spend increased by 22%. The results clearly indicate that banks offering solid financial guidance can separate themselves from the competition.

A panel of ‘Retail Loyalty Leaders’ including Best Buy, Macy’s and Saks Fifth Avenue, moderated by Colloquy’s Rick Ferguson, focused on the importance of loyal customers in a downturn, Aubyn Thomas of Macy’s said that loyal customers continued to shop during the downturn and fellow panelists agreed that it was their most loyal clients who saved the day when the economy worsened. As a result, none of the retailers were willing to reduce investment in their frequent shopping programmes. Instead, they recommended that better use of transactional and customer data would drive efficiency in communications and reduce programme operating costs. Saks has encouraged associates to work harder at building relationships with clients and to use the CRM tools already deployed.

At the best of times, there are challenges in predicting customer behaviour in any market, but the stakes are raised to do so accurately in a down market. According to Lightspeed Research’s Joel Stanton, to successfully understand and predict customer behaviour, a robust, holistic view of the customer is required and that simply focusing on one relationship or one product is not enough.

This article is copyright 2009 TheWiseMarketer.com

The 21st Annual Card Forum took place last week in Marco Island, Florida. The conference synopsis which follows was originally published at www.TheWiseMarketer.com as filed by Bill Hanifin, North American Contributing Editor.

Register here for a free subscription to the Wise Marketer

The 21st Annual Card Forum and Expo has recently been held in Florida and, while the banking and card markets in the US might be reeling, the quality of presentations and attendees was superb.

Bill Hanifin, Managing Director of Hanifin Loyalty, reports that according to Bruce Kerr of Loyalty One USA and Laurence Booth of Amex Bank of Canada, the loyalty market in Canada is “holistically engaged”, with some nine in ten Canadian households actively engaged in a loyalty programme (the US figure is one in three). In order to break through the clutter, Amex has worked with Air Miles Canada to revamp and relaunch its Platinum Credit Card in 2008, breaking through the traditional co-brand model, with gratifying results.

According to Jim McCarthy, Head of North American Financial Institution Sales, Visa, payment cards are making inroads into cash and cheque payments which, in the US, have seen their share of annual Personal Consumption Expenditure fall from 61% to 47% over a few years. Consumers increasingly shop on value, are in control of their commercial relationships, and are tending toward more judicious use of credit cards.

According to McCarthy, the debit card will be the key product going forward for most issuers. He reaffirmed that rewards and loyalty programmes are here to stay and that providing value and control while encouraging responsible choices will contribute to overall card loyalty. McCarthy quoted a Wells Fargo study among university students which revealed that, as the result of a financial literacy campaign, late fees in the test group dropped 42%, overdraft charges were down 40%, and past due accounts declined 55%, while card volume spend increased by 22%. The results clearly indicate that banks offering solid financial guidance can separate themselves from the competition.

A panel of ‘Retail Loyalty Leaders’ including Best Buy, Macy’s and Saks Fifth Avenue, moderated by Colloquy’s Rick Ferguson, focused on the importance of loyal customers in a downturn, Aubyn Thomas of Macy’s said that loyal customers continued to shop during the downturn and fellow panelists agreed that it was their most loyal clients who saved the day when the economy worsened. As a result, none of the retailers were willing to reduce investment in their frequent shopping programmes. Instead, they recommended that better use of transactional and customer data would drive efficiency in communications and reduce programme operating costs. Saks has encouraged associates to work harder at building relationships with clients and to use the CRM tools already deployed.

At the best of times, there are challenges in predicting customer behaviour in any market, but the stakes are raised to do so accurately in a down market. According to Lightspeed Research’s Joel Stanton, to successfully understand and predict customer behaviour, a robust, holistic view of the customer is required and that simply focusing on one relationship or one product is not enough.

This article is copyright 2009 TheWiseMarketer.com