We recently published a new Case Study examining the competitive scenario between two leading retailers of cycling gear and supplies – Bike Nashbar and Performance Bike. There is a de-facto advantage to one of the players and a key channel that the other can leverage to fight back.

The ultimate question: What would you do if wearing the moccasins of either Chief Marketing Officer?

Loyalty Truth recruited a panel of experts to review this Case Study and offer insights into what it will take for Bike Nashbar to put forth a differentiated Customer Strategy and how it should revamp its email marketing strategy. Now that all 3 of our experts have weighed in, look for a compilation of responses in our Resource section soon.

Loyalty Truth is proud to share Stephanie Scuderi’s thoughts on this case study as our newest contributing author. Please read more about Stephanie, a veteran of the Loyalty Marketing industry, at the end of this article.

In the age old challenge of newcomer vs. established brand, the newcomer, or Bike Nashbar in this case, has the ’scrappy’ advantage.  Without the momentum of established brand experience, Bike Nashbar’s brand strategy is a clean slate – nothing terrible to overcome…and a point of established relativity – or Performance Bike in this case. Creative ideas quickly fall into acquisition, brand and customer strategies. At a high level, the following considerations could be explored.

Brand Strategy

• Give it a personality…if Bike Nashbar was a person, who would they be?
• Appeal to the segment – sponsor or be a founding partner of global amateur racing – designed for the wealthy who are looking to blend experience with exertion
• Enlist a spokesperson relevant to the target – Instead of Lance Armstrong, get Jack Dorsey (twitter founder) or someone equally contemporary, making a difference, using his head, thinking out of the box, and oh yea, biking off the steam.  Publish his race times or self-bests — how do you stack up?

THEN…within that framework…

• Take it offline:  make the relationship tangible – can be done with a physical mailing – cleverly designed or worded.
• Partner with biking merchants to create a Bike Nashbar network.  BN becomes the face of all mom and pop shops online…providing a few templates, BN essentially private labels their web site to shops who couldn’t otherwise afford the complexity afforded in a co-op structure.
• Host “the world’s largest recreational biking” party – all members invited to the local Bike Nashbar network partner – with streaming video, a la the You Tube Symphony – get everyone across the world together – have it be newsworthy enough that the press alone is value.

Reward and Recognize…

• Set a goal to get to know customers – and communicate with them with respect to the relationship they have with you…don’t send everyone the same emails…they’re not sending you the same amount of business – reflect knowledge and insight in messaging.
• Set up a program that motivates people to spend more with Bike Nashbar — and reward for bike-related activities – even if they aren’t a direct revenue stream.  Jack Smith completed his first race, give him bonus points to congratulate him and get him to race another…the more he races, and the more he knows you’re in his corner, the more he’s going to spend with you and tell you about his experiences.

Finally, the Acquisition Strategy…with ideas for brand direction and how to keep customers in the loop, how to attract those prospects?

• Start a “What was your first bicycle?” campaign to get people to go online, register, and indirectly get acquainted with Bike Nashbar.
• Take them back to the beginning…ask the question why they fell in love with biking…I’m not a biker, other than around the neighborhood with my son on his tricycle, but I still remember my first bike, it was yellow with a black racing stripe and training wheels.  Then, I graduated to a Huffy Sweet Pea (yellow and pea green – loved it).  Point being, by tapping into a basic memory, prospects who aren’t currently avid bikers may be lured into the brand introduction experience and fall into the fold of occasional customers — who can then be targeted for growth in spend.
• Conversion:  be a race portal
• Create a race log…have all “registered” bike races online, with registration forms
• Partner with bike racing organizations to automatically load all times for racers belonging to Bike Nashbar network
• Users can link with bikers of similar skill/time level to see how others like themselves are training to improve

Success lies in the blend of meeting basic needs with a new twist — elegant new ways to do and think about everyday things associated with the sport and hobby of biking.  By re-engineering its brand, Bike Nashbar has an opportunity to reset expectations and redefine the biker’s experience.

More about Stephanie Scuderi: Currently focused on business development and marketing for Centennial Bank, a $2.7 billion financial institution, Stephanie has deep roots in data-driven business development strategies that build engagement and drive customer loyalty.  Having worked with Brierley & Partners, Frequency Marketing, Inc. and Alliance Data’s Colloquy consulting group, Stephanie has developed customer strategies for a diverse group of companies including Verizon, classmates.com and JP Morgan Chase.

One of the challenges in the Loyalty Marketing business is that few organizations share tangible results.

I still am occasionally asked the question “Does Loyalty Work?” and wish I could point to more specific evidence in public forum as an answer. Telling people that you are restricted from disclosure due to confidentiality agreements meets ethical standards, but is frustrating.  And, the information shared at conferences is typically sanitized in case competitors are listening.

The dearth of proprietary data shared by program sponsors makes continuous improvement in our sector a bit problematic. That’s why Hanifin Loyalty is fortunate to be able to share the results of Zion Bank’s merchant funded rewards program launched in 2005 in a new case study published on our web site.

Merchant Funded Rewards models represent the innovation of choice among today’s card rewards programs in North America. It’s not a big surprise as “Pay for Performance” affords benefits to participating merchants, card issuers, and cardholders alike.

At the same time, merchant funded programs have proliferated so quickly, almost exclusively centering on online shopping, that banks are challenged to differentiate their offers.

Zions Cash Rewards is unique in that it centers its value proposition on an extensive brick and mortar network of everyday spend merchants which brings high relevancy and interest to the bank’s cardholders.

Documenting this case study would not have been possible without Cynthia Smith, SVP & Director, Bank Card Products and Services Zions Bancorporation and Kelly Passey, EVP, Access Development. Thanks to them both and to their organizations for supporting this effort.

I hope you will download and enjoy this detailed Case Study which shares results of the collaboration between Zions Bank and Access Development to achieve success.

Retailers face an increasingly difficult challenge to be successful.  Not only do they have to outwit competitors with clever merchandising, creative store layout, and careful inventory management – they also have to understand how to best communicate their promotional offers to customers.

The last challenge can be perplexing as not all retailers use the same merchandising channels. For example, competitors in the same category can be single channel in brick and mortar, catalog, or online, or be operating with a mix of all three. Generally speaking, there isn’t a successful catalog retailer operating today without a website, and most brick and mortar retailers have gone online. Some have added a catalog and, to keep things interesting, others avoid the expense of printed catalogs and supplement their online marketing efforts with mass media advertising campaigns.

I’ve published a new Case Study on my web site that examines the competitive scenario between two leading retailers of cycling gear and supplies – Bike Nashbar and Performance Bike. There is a de-facto advantage to one of the players and a key channel that the other can leverage to fight back. The conclusions raise as many questions as it offers answers.

The ultimate question: What would you do if wearing the moccasins of either Chief Marketing Officer?

Since I don’t have all the answers, I’ve asked a panel of experts to review this Case Study and offer insights into what it will take for Bike Nashbar to put forth a differentiated Customer Strategy and how it should revamp its email marketing strategy. Chiming in will be:

• Michael Della Penna, Co-founder and President of SuiteDialog, a participatory marketing company that helps leading brands build interactive marketing programs that engage users in an ongoing dialog.
• Ragy Thomas, Co-founder and CEO of Aiti Solutions. Ragy is the former president of Epsilon Interactive, a division of Alliance Data Systems that was created by combining market leaders, Bigfoot Interactive and DoubleClick’s email solutions group. You can read his blog at The PMN blog.
• Tom Rapsas, an independent Creative Director, Writer and Creative Strategist who has worked for some of the biggest and most respected direct and loyalty marketing firms in the U.S.  Tom is a Contributing Author to Loyalty Truth and has written numerous trade articles on issues related to loyalty and direct marketing.

In the next week, we will post comments from our panel on this Case Study in a new post on Loyalty Truth.  We invite your comments on the case and are interested to know your reaction to the recommendations of our contributing panelists.

Download the Case Study here and join in the conversation.

I’ve posted a new case study about Discover Card and it’s brand dominance in the cash-back credit card rewards field. It is available for download from the White Papers section of the Hanifin Loyalty LLC web site and I hope you will read, enjoy and send me feedback by entering comments to this post.  Please download here.

To whet your appetite, here’s an excerpt:

“Every industry that has been around for 25 plus years has its share of fiefdoms, dogma, and biases. Loyalty Marketing is no different. As a young man, I remember my grandfather instructing me that “Cash is King”. With our current economic meltdown well underway, we are again hearing from financial pundits everywhere that “Cash is King”.

It seems that only in Loyalty Marketing do we disagree.

The most fundamental best practices call for value propositions that are motivating for the customer, but maybe just a little tough to dissect. Prying open the gap between perceived value and actual reward cost is good for all parties involved, sponsor, customer, and solutions provider. For that reason, punch cards that reward “the 10th one free” and cash back discounts are treated as solutions that are only chosen when the strategy team has a loyalty planning version of writer’s block.

In the face of the criticism and cash-back snobbery, I increasingly admire Discover Card. In case you don’t keep track, Discover is the sixth largest card issuer in the US with over $49 Billion in receivable and is the largest revenue producer within the Discover corporate umbrella. In the January 30, 2009 Discover Financial Services Financial Community Briefing, Harit Talwar – EVP, Card Programs & Chief Marketing Officer – reinforced the importance of their cash-back strategy, stating “Clearly, rewards leadership is the core of Discover”.

When you think of cash-back for using your credit card, you think Discover. The company has carved out its niche and stuck to its knitting. The question that begs for an answer is: how long can they remain one of the leading US card issuers with this one-trick-pony approach?