A Mosaic is defined as a decorative art involving small pieces of glass, stone, or other material. It is an art form that represents the product of human creativity and captures the eye. Mosaics date back to AD 64 when In Rome, Nero and his architects used them to cover the walls and ceilings of the Domus Aurea. The size and color of each individual tessera, or small tile of stone or glass used to make a mosaic, is determined by the artist and it is unlikely that any two mosaics are exactly the same.

This aspect of singular design is shared by the proprietary planning methodology employed by Hanifin Loyalty to arrive at a Customer Loyalty Mosaic™ , a desperately needed and innovative approach to Loyalty Program design.  Any business with the will to listen to its customers and adapt its product or service offer to serve their needs is, in theory, on the road to success. To build long term brand loyalty and improve lifetime customer value however, a business must go further by matching transactional and qualitative customer data as the basis of a value proposition that is defensible and set apart from the competition.

Every business is capable of creating its own Customer Loyalty Mosaic™, the components of which range from brand message to operational efficiency, quality, and price. If you visualize the Customer Loyalty Mosaic™ (CLM) of familiar companies as a mix of shapes and colors, the idea takes shape.

Walmart’s CLM would emphasize tessera (elements) related to price and distribution, while Apple would have larger stones representing Innovation and Service. Federal Express might have larger components of Operational Efficiency and Distribution, while American Express would showcase Brand Message and Service.

In today’s difficult economy, it seems that the mosaic pieces of Service and Customer Satisfaction are increasingly in the spotlight. There is a unique challenge to consumer facing companies – do more with a diminished marketing budget and somehow meet the needs of customers who not only understand their value to the business, but carry a sense of entitlement about being recognized for their patronage. In other words, business is challenged to provide stellar service and more individual attention to customers when resources have never been more scarce, and work forces more skeptical about pitching in for the good of the enterprise.

Business Week recently chronicled this service phenomenon and noted that business resources are quietly being shifted to retain and delight more valuable (“best”) customers while deemphasizing acquisition plans. The magazine noted a renewed emphasis on segmenting customers by tiers and designing service and benefit packages customized to these tiers to improve retention. Business Week formed its own methodology to rank the top “Customer Service Champs” in 2009. Tops on the list was Amazon.com, followed by USAA, Jaguar, Lexus, and The Ritz Carlton in the top 5.

The trend towards customer retention and a more sincere approach to customer service is heartening as both are core elements of the Customer Loyalty Mosaic™. Loyalty Marketing is desperately in need of innovation. Let’s hope that the leadership exhibited by the companies on display in Business Week strike a chord for a more holistic approach towards building customer loyalty. Both consumers and business will benefit as these ideas filter throughout industry and, more importantly, have staying power as the economy improves.

Between the two political parties, the Democrats win the propeller-head award. In addition to their sophisticated use of social media to build a volunteer army and raise funds, they distributed a commemorative badge at their August convention that doubled as a prepaid card.

Using an RFID based technology known as GO-Tag and marketed by First Data Corp., each badge came loaded with $10 and was accepted for payment at over 100 POS terminals throughout the convention venue. Reports cited that the small buttons were distributed to over 5,000 journalists and delegates who happily tapped them at concession stands throughout Denver’s Pepsi Center to get free drinks and snacks.

The use of the cashless payment devices was covered by Business Week in their August 28, 2008 issue with the title “Go-Tags May Replace Cash and Credit Cards”. Reading the headline, I instantly blurted out “I need a new publicist” to anyone in my office who would listen. Similar payment devices and form factors have been around for over 10 years and I have been writing about them for nearly that long. I am surprised that a publication the stature of Business Week could be duped into giving a tired concept this much attention.

I can remember wearing a Java enabled ring from Sun Microsystems and paying for refreshments at a concession stand in 1998 at a CardTech SecurTech conference. For the next several years I worked on a number of smart card projects trying to transform the technology into a difference maker for loyalty marketing programs.

Chris Hughes, one of the founders of Facebook is quoted as saying “You can have the best technology in the world……but if you don’t have a community who wants to use it and who are excited about it, then it has no purpose.”

After many trials and pilots, mostly in Latin America, the consensus of people on the front lines was that smart cards were cool, but not powerful enough alone to improve the performance of a loyalty program. In addition, the Achilles heel of the technology was the need to invest heavily in new card acceptance devices at POS to read the smart cards. Producers of smart cards retrenched and have since found success in closed loop environments such as campus and large corporate settings.

The application of the Go-Tag by the Democratic party was perfect, however a cautionary note to Business Week is in order. If Go-Tags are to replace cash and credit cards anytime soon, a huge investment in POS infrastructure across North America will need to occur. I’ll cover this in full detail another time, but the slow ramp-up of contactless cards in the US despite heavy subsidization by major card issuers and associations supports this view.

The Business Week article highlighted that with GO-Tag, First Data is “placing a major bet on the fast-emerging world of mobile e-commerce”. To make these bets pay off, all constituents of the technology must realize benefits. In this case, the stakeholders are card issuers, retailers, and consumers.

Linda Gridley, President of Gridley & Co., a mergers and acquisitions advisory firm in New York voiced her doubts on behalf of the card issuers. “I’m all for innovation, but it’s tough when your customers don’t have the money to pay for it,” she stated.

Consumer demand is also in question. One would think that members of Generation Y (Millennials) would be twittering over this technology, and some industry pundits who used to beat the smart card drum are now postulating that the mobile phone will become the new uber-payment device. According to a recent study by Javelin research, this is not the case as “only 15% want to use a mobile device as means of payment.”

Retailers are the hardest to convince as changes to POS are viewed as peripheral to the core business. Try to change their minds and you either have to deliver a killer application or pay to put the device on the counter.

Before I start sounding like a member of the “grumpy old man club”, I want to emphasize that I applaud the use of the Go-Tag product in the convention environment. It was the right application of the technology, saved people time, and probably made the convention even more memorable for souvenir hunting delegates.

As for Business Week, before they decide to write about the next new payment technology coming to market, I wish they would give me a call. Please send your suggestions for a good PR person in response to this post.

…….. Bill Hanifin

Being a player in our new digital age is akin to being the catcher in a knife throwing act at the county fair. It’s exciting, and cool that you can keep up the pace, but will the end game work out in your favor?

Both games are fast paced and just a little dangerous. The pace of introduction of new web based applications, communities, and services never seems to let up and the merit badge of those “in the know” is expressed by their ability to dissect the latest phenom, master it, and then declare it nearly passé as they go on all night vigil waiting to coin the next great thing. The danger in playing is not physical, so you can relax on that count. The risk is that while we are chasing the rabbit in this blistering race, we can easily lose sight of why we are running so hard.

The rapid progression of Web 2.0 offerings MySpace, Facebook, You Tube, and Twitter are example enough. According to Business Week, the most well known social network in 2005 was Friendster. With multiple generations of social networking in play, it’s safe to say things have changed.

Marc Andreessen, of Mosaic and Netscape fame, is behind Ning, a platform that allows people to make up their own mini-MySpace. Speculation abounds that instead of one of the established social networking platforms dominating an industry consolidation, there may be a big bang in our digital future with the resulting fragmentation translating into everyone having their own micro-mini network.

While I do hear people asking questions about how this will play out, I don’t hear them asking the important question – what tangible benefits do I get from social networking and how much time do I have for it? In short, we should be looking for the drivers of desirable behaviors, rather than “twittering” about which glob of mud thrown against the wall will still be worth our time in two years.

For the majority of the connected population that still finds sleep useful, decisions will be made of how best to allocate our digital mind space. Life online still has competition with TV, music, movies, meals, work, and families. While it’s fun to have a profile on LinkedIn and pages on MySpace and Facebook, we will eventually make choices as to where we get the most benefit from time invested and pare down the number of engagements we maintain online.

Don’t misinterpret my take here. Social networking is an awesome concept and has benefits for its participants. I just find it interesting that the web started off with bulletin boards and forums and now envision that we could return full circle to an environment where people match up with others on increasingly granular subject matter. Where the commercial benefit resides is not yet clear, but so far it looks like the participants stand to receive greater benefit as they can short-cut rolodex networks and bring efficiency to their business and personal lives.

It may be that the next great thing will be found in the madness itself.

Just like Executive Book Summaries, which offers summaries of business books to save time and money for their subscribers, maybe a clearinghouse application that aggregates and filters multiple networked memberships will constitute the most hip home page that you can add to your browser.

Or, maybe it’s already out there and I just haven’t had the time to find it! >>> Bill Hanifin