Is that a juice box in the mini bar?

The next frontier in hotel loyalty marketing may reside in a guest who can barely reach the hair dryer and prefers maraschino cherries to Manhattans.

Turns out an increasing number of business travelers are bringing their spouses and kids along, and tacking on a few additional days for a little family vacation.

Loyalty marketers should see this as a rich opportunity not only to add different rewards, but also to create value in services that may often be overlooked or taken for granted. By merging business travel with recreational travel, loyalty members are expanding the potential portfolio of meaningful perks well beyond faster check-in times and suite upgrades. Instead, a children’s movie network and extra beds could be most valued by loyal guests.

A recent story in USA Today hints at so much. It cites a recent survey by Hilton’s Homewood Suites, which shows that 67 percent of its frequent customers now combine leisure and business travel. This compares with 43 percent in a similar survey taken 2000. One of the business travelers interviewed for the story said he is in fact a more demanding customer when his family is with him, asking for club access and a bigger room.

I myself have combined work and leisure travel, and what I value does shift as I transition from worker bee to travel bug. Complimentary breakfast is less important than complimentary cocktails, for instance. And wouldn’t it be nice, if on Friday, I was automatically texted a few suggested day trips, at a discount, from the hotel?

Smart hotel chains are already exploring such rewards – today’s little guests will become tomorrow’s business, after all. Perhaps one or two chains will even designate a “kids wing” that separates those who wake very early from those of us who like to stay up late.

In the meantime, hospitality’s biggest players might want to consider mini-refrigerators and string cheese. It could earn them extra points.

By:  Lisa Biank Fasig, Director Public Relations, JZMcBride and Associates

Amazon announced it is selling more Kindle books than hardcovers, the US Postal Service is in jeopardy, and Continental Airlines will begin allowing travelers to scan themselves on board flights. As change marches on, what other familiar aspects of our lives will join the milk-man in a mythical global retirement home?

Keep an eye on traditional points-based loyalty programs, because they just might be next.

Points programs have been around for decades because, as my friend Jim Ryan told me, “they work”. Jim, the former CEO of Carlson Marketing, knows this business cold and although we both agree that points-based loyalty currencies are an effective medium to change & measure consumer behavior, the companies which foot the bill for these programs are increasingly opting for something different.

I did a market scan recently and found a few examples of how Loyalty Marketing is being redefined:

• Ford ran its “Fiesta Movement” campaign (to be profiled soon in Loyalty Truth) over a year ago, recruiting 100 agents to drive a Ford Fiesta and document their experiences through written and video blogs. The results? Ford created over 11 Million social networking impressions, created a 37% awareness of the new car across Generation Y (Millennials), and enjoyed one of the best new car introduction campaigns in years.

• Tropicana launched Juicy Rewards, a hybrid of the on-carton coupon model which typically requires consumers to enter codes online till their fingers bleed in order to win something of value akin to a paper clip. The difference here? Tropicana has aligned itself with a strong portfolio of merchants offering discounts that equate to 5X the value of the product purchase price.

• Clorox launched CloroxConnects, a social site that serves three key audiences, consumers, partners, and employees. Better described as an Engagement Platform, Clorox encourages participation from each group and awards badges and recognition rewards based on proprietary game mechanics.

Don’t miss the subtlety of these new loyalty program formats. Each program has well defined business objectives, predictive analytics and financial modeling are used to refine audience targeting, and a loyalty processing platform is needed as the backbone to run the program in most cases.

In other words, the fundamentals to engage, interact with and retain customers remain consistent. The key difference is that instead of keeping score by awarding points, companies are moving towards scoring as much by social behaviors as transactional.

For the past 30 years, Loyalty programs have been designed by Boomers for Boomers. The influence of a digitally connected generation is more apparent than ever, and consumer engagement will only happen if you re-tool marketing strategies to embrace the Millennials and others who want more transparency and immediacy in their brand relationships.

Are you equipped to make these changes?

I’m honored to have made strong alliances with respected people in my industry. Though I wouldn’t turn down sensible sponsorship, each of the icons on the right hand panel of the Loyalty Truth are there through mutual agreement, not due to an advertising deal.

Once in a while, one of my strategic partners gives me time on the soapbox. I wanted to share a piece here written about the impact of social media on loyalty and millennial marketing.

This was originally published in the Loyalty Guide, a great publication available from The Wise Marketer which I would encourage you to add to your library. A free 50-page Executive Summary, including chapter samples, table of contents, text searching, licensing and ordering details is available here.

How to earn loyalty from social media and Millennials

With data-driven marketing starting to resemble a mature industry, progress and change are clearly just around the corner, according to Bill Hanifin of Hanifin Loyalty. If you agree that the industry has its origins in the American Airlines AAdvantage programme in 1981, and in light of the first North American credit card rewards programme being launched around 1992, then the industry itself is something like 20 to 30 years old. In which case it’s time to stop leaning on the excuse that “we’re still learning” and assume the responsibilities of loyalty marketing adulthood.

For years, Bill has been asked the question, “Does loyalty really work?” and, with growing patience, he answers the question with a practised response: “Yes, it does work. The concept of measurable marketing programmes that link customer and transactional data is more attractive than ever”. I also explain that the magic of successful loyalty marketing programmes lies in attention to the details of execution, the diligent usage of collected data, and attention to financial measurement.

As Bill has turned his attention to recrafting loyalty programme designs to engage Generation Y, he has noticed that value propositions are changing and the communication channels used to convey promotional messages are also new, untested, and evolving before our very eyes. The key to successful ‘Millennial marketing’ lies increasingly with the effective incorporation of social media tools into our communications plans and, despite what you may read on Twitter, there are not nearly as many ’social media experts’ around the world as you might think.

Loyalty programme sponsors are launching communities, setting up Twitter accounts and Facebook fan pages, and some are even rewarding members with promotional currency for updates on social media sites. With more of this activity being evident in the market now, the new question that he is being asked regularly is, “Is this social media thing here to stay, or is it just a fad?”

That is a valid question on the surface, but his answer is another question: “Do you want to be able to communicate with the 80 million Millennial consumers in the US, a segment which is emerging as the most important economic force in the market, and equal in size to Baby Boomers?”

Of course, implied by his answer is the idea that we don’t have to like social media – and we don’t even have to necessarily understand it – but we do have to admit that social media and social networks are the preferred communication method of the Millennial consumer. While growing rapidly among the 18-29 age group, social media is also making inroads into older demographics as well.

In 2009, there were approximately 40 delegates at a loyalty conference who participated in a Twitter conversation during the conference. This represented about 10% of total attendees and the volume of Tweets during the event was less than significant. Interestingly, almost one year later, Bill made a quick evaluation of the Twitter accounts of those 40 delegates, and found that only a small handful were still actively participating and growing their network. This of course says less about Twitter itself than it does about how the core of the loyalty marketing industry is engaging with social media.

An increasing number of our clients and potential clients with whom we speak are active in social media and inquire about our depth of understanding of the tools. There is interest in incorporating social media into loyalty programme designs. Advertising agencies and specialty ‘new media’ marketing agencies are rapidly taking the high ground in this emerging area of member communication.

So, rather than waste time apologising for social media and wringing our hands over whether Twitter, Facebook, Mixx, StumbleUpon, or Propeller will survive, Bill is listening to clients and learning as much as he can to serve their growing needs.

Fred Reichheld told us long ago that we should listen to our customers to better meet their needs. We need to do the same with our own clients and exercise our own form of retention programme. Some 80 million Millennials may have different tastes from your own generation, but we need to meet them where they are and build transparent and open communication plans to build engagement and engender their loyalty.

This article is an extract from the 30 chapters of detailed coverage in ‘The Loyalty Guide 4′, which is The Wise Marketer’s latest 1,000+ page global guide to customer loyalty and engagement techniques, best practices, models, metrics, practical advice, market data and research. The report provides hundreds of detailed case studies, forecasts, trends, tables and visual materials to support new initiatives, presentations and proposals and represents a complete, portable reference library of customer loyalty, engagement and marketing strategy.

The Return of the Hoodoo Gurus

I’ve been a fan of the Australian rock band the Hoodoo Gurus since the 1980’s, when they were college radio favorites with hits like Bittersweet, Come Anytime and What’s My Scene. The group’s sound has been described as everything from power pop to garage punk to surf rock, and has aged well—at least if you consult the number of plays the Gurus get on my iPod.

The band has been under the radar in the US for a decade or more—but a few weeks ago, the Gurus put out their first new music release in several years. Titled Purity of Essence, it’s better than anything they’ve done since their heyday—a tuneful, hard rocking set that I’ll be playing loud on my way to the beach this summer. (Recommended download: I Hope You’re Happy.)

The good vibes got me thinking: How do you revitalize and market an aging brand? In this case, how would you bring to life an aging rock band that has been out of sight & out of mind for years?

• Should the brand image be repackaged for a younger market?
• Can it be done without putting a lot of money behind the effort?

Here’s my quick take on what the Hoodoo Gurus, or any mature brand, can do to make a go of it in today’s market.

1. Capitalize on name recognition – Is a rebranding needed? Not here, as the Gurus name has enough cache to bring back happy memories to fans of a certain age. In rock and roll, nostalgia still rules, as evidenced by the fact geezer bands from Rush to Crosby Stills & Nash are still successfully touring. By comparison, the Gurus, now in their late-40’s, are relatively young.
2. Revitalize the product – The group could have rested on past laurels with a “greatest hits” release, but instead has opted for a brand refresh—a new CD that puts a fresh new spin on their sound. This increases the chance of winning new fans as well as rekindling the interest of older ones.
3. Connect with thought leaders – While the new release has received good reviews from mostly obscure music blogs (save a glowing review in allmusic.com), they need to connect with the leaders in the space. This includes Rolling Stone and Pitchfork, and of course the leading rock radio outlets including XM and Sirius. Push, push, push, to get the new CD reviewed—and played—wherever possible.
4. Use social media to get the word out – Social media represents the best way to reconnect with a now scattered fan base. While the band has set up Facebook and MySpace pages, it looks like there could be more interaction from band members, especially regarding fan posts that reference old videos and shows. Make the conversation a dialogue, not just a monologue.
5. Take the show on the road – There’s nothing like a live product demonstration, especially when it comes to rock-and-roll. So I recommend the Gurus dust off their passports and hit the road for a tour. If they’re anywhere near Philly or NYC, you’ll find me not far from the stage.

Tom Rapsas is a seasoned Creative Director and Loyalty Marketing guru and expresses his own “Purity of Essence”  on all things Customer-Centric on Loyalty Truth whenever we are so fortunate to have some of his time. You can follow him on Twitter here: @TomRapsas

Oracle is increasingly active in the Loyalty Marketing industry and has reported success in providing technology support for some of the largest frequent flyer programs in the US.

I recently ran across an Oracle blog that recounted how Alaska Airlines upped its email game, adding a greater degree of personalization by replacing a legacy mainframe loyalty system with Siebel Loyalty and Siebel Marketing. Going beyond the sales driven copy in the post, I was interested to hear Steve Jarvis, Vice President Market Sales & Customer Experience – Alaska Airlines speak about the airline’s commitment to provide “proactive customer service” and “superior customer service and innovations” to the over 22 Million passengers they fly annually.

Apparently, Alaska could only reach the 2 Million flyers enrolled in its frequent flyer program and was suffering from the same problem encountered by many retailers – how to identify the customer and create customer engagement. The Siebel installation apparently changed all that as Steve Jarvis relates in this video.

Alaska’s new-found ability to reach its customer base with targeted emails and promotions made me think – which pattern will they follow? Will it be a judicious email policy adopted by the legacy airlines or the firehose approach adopted by the newer “discount” airlines, in particular Spirit?

Hanifin Loyalty recently completed a survey of the use of email as a communications vehicle across the loyalty programs of 22 companies in the Airline, Retail, and Hospitality industries. Full results of the survey will be published in the very near future.

As a preview of the findings, the airlines had the highest rate of email issuance at 5.4 per month. 35% of the emails were related to program membership (meaning statements and newsletters) while 56% were purely promotional and 6.75% were pitching cobrand credit cards.

Sadly, less than 1% of all emails had evidence of a behavioral trigger (i.e. the customer did something that triggered a promotion or offer) and surveys were rare indeed.

The biggest contrast stood out between legacy and discount air carriers with legacy (American, Delta, US Airways) issuing 3.5 emails per month & discount carriers 7.3 per month. Spirit stood out among all airlines surveyed with a whopping 14.8 emails per month.

The results of our email survey pointed out the importance of cadence and relevancy in managing email campaigns. Spirit certainly displays a consistent cadence with an email almost every other day. Trouble is, how many “Red Light Specials” can the recipient endure before she reaches for the delete button every time Spirit shows in the Send field?

For loyalty program sponsors, in this case airlines, two huge areas of opportunity exist.

1. Use the data they possess to send fewer emails with higher relevancy. This is the antidote for customer attrition.
2. Make it bleeding obvious (as my UK friends would say) that something the customer did triggered the email.

I want to know that because I visited the Delta Crown Room in LaGuardia that I later received a discounted offer for annual membership. Better yet, I’d like to see that my survey response indicating St. Croix as a favorite destination with American Airlines resulted in a packaged offer of hotel and discounted airfare.

Frequent Flyer Miles, American Express Membership Rewards Points, Citi ThankYou! points,  AirMiles – which loyalty currency holds the crown as the world’s most recognized and highly valued?

While that debate rages on, let me suggest that the answer might be “none of the above”.

It’s not the points or miles that will drive consumers to shift their shopping habits in favor of  your brand.  It might be the TIME those points represent.

What’s more important, Time or Money? That question has been debated since the industrialized world has matured.

The conversation has reignited in the US as Americans have experienced tough economic times, triggering self evaluation of lifestyle and priorities. In a fascinating story on CBS Sunday Morning, Jim Axelrod reported that, “of the 33 richest countries, the U.S. is the only one with no legally-required paid vacation for its workers”. The finding came from a study authored in part by John Schmitt of the Center for Economic and Policy Research. Axelrod went on to say “Even when times are good, people don’t take their vacation – they don’t want to be seen as ‘That guy who’s always taking his time off,’ who values his time off more than being at work”.

This angst over taking what vacation time we do have is in direct conflict with the fact that “69% of all middle class Americans say their number one desire in life is to have more free time”. At least, that is what Congressman Alan Grayson (D Orlando) cited on CBS as part of his motivation to introduce legislation in Congress to require companies with over 100 employees to offer paid vacation by law.

This is more than a casual social issue as the US now has one of the highest gaps between rich and poor among all industrialized nations. A report from the Organisation for Economic Co-Operation & Development (OECD) stated that, on average in 2005, the richest 10% of the population in OECD countries have 9 times more income than the poorest 10%. In Mexico the ratio is 26 to 1, the United States is over-indexed at 16 to 1 while Canada and the UK were at par with the global average.

Time is a currency that all of us desire, whether rich, poor, or somewhere in the middle. It is highly liquid and does not come with capacity or fulfillment issues ala frequent flyer miles.I can see a new category of rewards options opening up that save time, make time, or share time for program members.

I won’t go into specifics, but let’s just say we’ve got lots ideas to make this work and, once again, change the game in Loyalty Marketing.

Got time to hear about it?

Neil Rogers was the original “shock jock” in South Florida radio. Not being a fan, I was in a clear minority as he stacked up top ratings year after year before retiring in 2009.

Part of Mr. Roger’s shtick was living in the gray area of FCC regulation, and he was reminded from time to time by his employer that there are 7 dirty words that can’t be spoken on the air.

Rick Barlow was a man of different fiber. Mr. Barlow was the founder of Frequency Marketing, a company conceived and developed as the Loyalty marketing business unfolded.

Barlow had a laser-like focus on perfecting the art and science to “identify, maintain, and grow best customers through long term, interactive, value-added relationships”. That phrase is emblazoned on a coffee cup still in my cupboard, a souvenir from my days in Barlow’s Cincinnati office.

The evolution of the marketplace has placed pressure on “Loyalty” and how it is defined. Use the “L” word in a meeting and most people instantly think of points and miles, selling the concept short.

Has this made “Loyalty” a dirty word?

I’m not dropping the L word, but I do prefer to talk with clients about the need for a well planned and executed Customer Strategy. The broader term remains founded on the blending of behavioral and attitudinal data to create profitable behavior change across a portfolio, customer base, or market. The advantage of a Customer Strategy is that it allows for forms of execution well beyond points or miles and can be effective using no currency at all.

To underscore that I am not the only one concerned about being labeled the “points” guy, I was witness to a lengthy discussion at Templeton College where a room full of loyalty “experts” debated whether they should use different language to describe what they do. Suggestions ranged from “Customer Management” to “CRM” to “Relationship Management”, but in the end the group agreed it was becoming overly narcissistic and stuck with Loyalty.

Today, the idea of creating enduring customer loyalty to a brand is a lofty goal. Mark Johnson, CEO Loyalty 360 was recently interviewed by Fox Business on the subject and I have included the video here.

As Mark mentions, it is well within the capability of business to use its data intelligently to build relationships to give it an edge over competitors using pricing and discount strategies.

Loyalty lives, it’s just a lot more complex to deliver these days.

Chris Brogan is going to jump all over me.

In a keynote presentation he made recently at Like Minds 2010, he rightfully commented that the chatter about social media in US conferences had become “boring” and, with tongue in cheek, suggested  “I think it should be legal that if someone says “Just join the conversation” that it is legal to punch them in the face“.

OK, Chris, you have a free swing!

I’m suggesting that marketers interested in understanding consumer purchase behaviors and retail “join the conversation” at Retail Wire.

Here’s why….

The information funnel in my offices is getting bigger by the day. I try to narrow my field of vision and manage my time by setting up Google Alerts on my favorite loyalty marketing topics and subscribing to RSS feeds that I can browse in my Google Reader.  Those two sources create an overwhelming volume of information at times and so, I have chosen a very select few reads that are allowed to hit my inbox.

Three current favorites have been on a roll lately.

• Chris Brogan brightened my day with “I Could Totally Do That” and shared an entertaining video that you should see.
• Christopher Penn switched up his interesting stream of information with an inspirational post “Renewing Faith”, also kicking a day off in the right direction.
• Tim Sanders served up “Why I seldom reply to Tweets Publicly” which presented an opposing viewpoint to something Chris had written about earlier.

So what’s this have to do with Retail Wire?

I’ve been reading the site for a while and find they continually pose questions on critical issues, current events, and future trends in retail loyalty, online retail rewards and broader aspects of retailing. And, they share the information in a conversational way, with daily questions posed and members of a Brain Trust Panel chiming in along with anyone else who feels the urge.

I’ve recently joined the Brain Trust and you can find a compilation of my comments on a variety of topics in my Retail Wire Blog here.  I’ve got my favorite industry specific information sources for banking, card marketing, airline, hospitality, as well as a few more for general marketing topics. Beyond the self – promotional aspect of this post, I had to let you know that Retail Wire is my favorite for staying current in this segment.

Join the conversation at Retail Wire.

OK, Chris, you can have your swing now!

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?