Evidence of the health of the loyalty marketing business is that my list of subjects to write about grows faster than I can type.

Yesterday, as I picked up the USA Today slipped under the door in my NY hotel room, a glossy 8 1/2 x 11 flyer fell in my lap and changed my blogging plans for the day.

“It’s Like Joining EVERY Hotel Loyalty Program. Except, it’s only one.” was the message. Flipping the piece over, the offer was clear: book  and stay 10 nights using Hotels.com and earn 1 free night at any of the 60,000 hotels offered through the site worldwide. Better yet, signing up for the WelcomeRewards™ challenge offered the chance to win 2 bonus nights over the course of 30 total nights booked.

The punch card might be the oldest loyalty tactic in town, but it works well for Southwest Airlines and for Hotels.com. I did a quick comparison and the simplified approach is not too far away from the basic value promised by traditional hotel loyalty providers Marriott and Intercontinental Hotels Group. For example, if a member of Marriott Rewards or Priority Club stays 10 nights at one of their respective properties with average room rate of $100, a free night is on the radar.

I know that Marriott and IHC offer multiple ways to boost earnings and have much more sophisticated programs overall, but for the budget driven traveler, joining WelcomeRewards™ is not a bad deal.

Interesting to me is that the program was launched in July 2008 but has had low visibility in the consumer eye. Also, given that Hotels.com is an operating company of Expedia, I wonder why the ThankYou! Rewards currency that Expedia uses wasn’t extended over to this brand.

WelcomeRewards™ comes with a few conditions (a/k/a the Loyalty Asterisk™), specifically:

• Rewards may be redeemed at “eligible” hotels, but I could not find that term defined on the web site
• The maximum value of a free night can’t exceed the average daily rate of the 10 nights used to earn the reward. You can however, choose to pay the difference if you really want to stay at a higher priced property
• Taxes, fees, meals, incidentals and any “other costs associated with the booking” are not covered by the free night
• Each loyalty credit is valid for three (3) years from date earned
• The program may be terminated by Hotels.com at any time

Summing it up, the flyer that dropped in my lap reminded me why brands continue to choose data-driven incentive (Loyalty) programs to engage and retain customers. Far too many people that I have heard from are using travel aggregator sites like Hotels.com and Expedia to shop around and then login to their frequent guest account at the airline or hotel chain of their choice to book reservations.

To break the habit, Hotels.com had to do something and WelcomeRewards™ is an easy to understand program that delivers sufficient value change a few consumer minds.

Auto insurance is not the most sexy purchase you can make as a consumer. It’s one of those “must have’s” and often its hard to differentiate the pros and cons between major insurers to make a decision.

I’ve admired the advertising creativity from Allstate and Progressive over the past year or so. Dennis Haysbert has put an incredibly trustworthy and down to earth face on Allstate’s brand and their ads have ranged from serious to funny, all effective in their own way to communicate Allstate’s brand promise.

And, who doesn’t like ditsy Flo, the Progressive girl, complete with her tricked-out name tag?

State Farm, the biggest of these competitors has been strangely quiet. Big Red offers not only insurance but banking and investment services through their State Farm Bank group, but for some reason has kept their light, comparatively speaking, under the bushel basket.

Progressive has launched a new campaign to pitch Loyalty in the past month and I’ve seen splashy print ads in USA Today and ESPN The Magazine touting “We Like Long Term Relationships”  and announcing rewards for new and existing customers alike.

I have to smile when any big brand chooses to put the “L” word front and center in their advertising. Customer Loyalty remains front and center with customer facing businesses, large and small and there is growing realization that growing a satisfied customer base and keeping them around for an extended time drives fundamental business and shareholder value.

I also have to let you know that Progressive’s program is a Loyalty program with a little “L”, and deserves a smallish Loyalty Asterisk™ for its manner of expressing its value proposition to consumers (i.e. calling benefits commonly offered across competitors a Loyalty program). Dig in to their web copy and you will see that they offer a myriad of tenure based and other discounts, not unlike what Allstate has been touting for the past few years and a similar package to those I have earned with State Farm, having been a client for over 25 years.

The difference? Progressive is the only of the top 3 insurers to use the “L” word and as such, makes it so.

The range of options to execute a Customer Strategy to develop and nurture brand loyalty has never been greater. They have always existed, but with points-fatigue on the rise and consumers demanding transparency and value, every brand should evaluate the Big L and the Little L as they form up a go-to-market plan.

That’s the best way to get yourself a tricked-out Loyalty program.

Orange Juice has been on my breakfast menu for as long as I remember. Linus Pauling shined the original spotlight on OJ as he asserted the benefits of Vitamin C to cure the common cold and retard the impact of certain forms of cancer.

Since then, there has been great debate about Pauling’s claims and the fruit juice has survived public relation storms from Anita Bryant to OJ Simpson. Nonetheless, we’re still enjoying OJ in our home and I just noticed the other day that Tropicana was promoting Juicy Rewards on its cartons.

The biggest challenge for consumer packaged goods (CPG) companies is to understand who is buying their product. Sure, they understand market share through reporting services and can track sales through various distribution outlets, but connecting with individual consumers is a highly problematic chore.

The messaging on the carton caught my eye:

• “Click, Save, Enjoy”
• “Collect points online for healthy savings on healthy fun”
• “Thousands of rewards nationwide – log on to find the ones near you!”

In a labor of loyalty love, I visited Tropicana.com and arrived at the Juicy Rewards landing page. My initial curiosity was held by two messages:

• “20,000 ways to save on everything from golf and workout gear to water parks and zoo admission”
• “One carton saves you up to $15, three can save you up to $45″.

With the average price of a 56oz. carton of OJ in my area around $3.50, Tropicana creates the perception of a huge return, dwarfing the usual 1-3% funding rate for rewards these days.

As soon as I completed my enrollment, I was asked to participate in a brief 4 question survey. Well designed, I was asked:

1. Which rewards categories most interest you?
2. We’d love to get to know you better. So clue us in by sharing your interests.
3. Think back on your most recent orange juice purchases. Ahhh … a fond memory, we’re sure! We’d like to know how often you buy Tropicana.
4. Are there children in your household? [this does not include the neighbor kid who just snuck in!]

These questions were cleverly designed and not overly intrusive. The entire customer experience was moving along without a hitch until I had to spend about 15 minutes locating and entering the correct on-carton codes to get my credits for future discounts. In the process, I discovered that the program was product specific as the Grapefruit Juice we had in the fridge didn’t qualify.

The labor intensive and menial nature of code entering is the achilles heel of CPG rewards programs and there surely must be a better way to solve this  painful aspect of program execution.

Overall, Tropicana’s approach is well executed and the messaging supports its product branding. Among the reward options available, members can donate points to “Rescue the Rainforest”. We are told that on the website that “Each point donated to help Rescue the Rainforest saves 33 1/3 sq. ft. of rainforest.” I don’t have any idea how the calculation is made and it is not explained on the website, but it feels right nonetheless.

Sometimes, rewards are all about perception. The Juicy Rewards loyalty program delivers a top-line message of value and capably solves the issue of customer engagement. Digging deeper, consumers will realize that the program is all about discounts, so nothing is “really” earned until the member decides to spend more money with one of the partners involved.

Still, the partner list is wide ranging, includes many top brands, and are localized and searchable by zip code.  If drinking our morning OJ can result in a 10% discount off a visit to MassageEnvy, it just might be worth the time taken to enter those codes.

I wonder what Anita Bryant would say about that?

With March Madness about to launch into full swing, you might be dusting off your list of favorite sports bars. In South Florida, there are a lot to choose from, but there is only one that combines good vibes, good food and a decent rewards program – Duffy’s Sport Grill. If you aren’t familiar with the area, Duffy’s is operates a 20 store chain between Melbourne and Plantation on the Southeast Florida coast.  I believe the firm to be privately held and have noticed their expansion in my area through assumption of real estate from Roadhouse Grill as that chain exited locations.

The program is simple to understand, encourages repeat visits and sports an email based communications stream that provides just enough information without being intrusive. They’ve even got a decent Twitter account which seems to be following people back (the exception for many business twits) and posts about more than just their daily special.

The Club MVP program was comfortably explained by well trained staff. Enrollment consisted of completing a simple post card size form while I waited to wrap up our tab.  Name, email address, zip code and birthday were the required data to get started.I wonder if they use the zip code to manage communications – South Florida is a tourist market and maybe they tailor offers for locals and visitors.

The program awards 1 point for every dollar spent and automatically credits $10 to the member card once accumulating 100 points. Points never expire and the 10% back is nothing to sneeze at. Members can earn double points every Tuesday and those who visit 12 times in a 12 month period receive a $25 credit on their birthday.

The communications via email over the first 30 days were on target and well paced:

• After enrolling, I received a Welcome to the Club MVP program message highlighting special offers and links to get more information
• Day 4 – I received “Ways to Save Big at Duffy’s” which informed me of mid-afternoon specials at 40% off
• Day 8 – Since we were nearing the holiday season, I received an email inviting me to ” Book your company’s holiday party and keep the MVP points yourself!”
• Day 18 – Another special was highlighted having to do with Game Day Deals (food and drink specials)
• Day 30 – More Game Day Deals were touted prior to the weekend

Following this first salvo of email, they’ve been judiciously letting me know about seasonal events, gift card specials (buy $100 gift card and earn $20 bonus)  and other special offers 2-3 x per month. I can’t say that they have offered anything of a personalized nature but since they haven’t tried a survey, that stands to reason. I also haven’t noticed any email triggered by a visit or items ordered – something to consider for the future.

One competitor on the local scene is Flanigan’s, renowned to have the best ribs in town. For years the stores in our area have been offering paper based punch cards, which in my opinion are completely worthless. There is a temporary feeling of earning something when you receive the card from the wait staff, but inevitably the card is lost along with the value.

The Flanigan’s chain has fragmented ownership and just recently I saw the group that owns the Quarterdeck (near the beach and Port Everglades) going “Duffy’s style” with a plastic card that allows value to be accumulated.  Let’s see how that one works out.

The lesson learned is simple: just like cash back can be turned from a transparent reward that offers limited leverage into something more powerful with partner offers, a few tweaks to the traditional punch card used by many small – medium businesses can be made to create a loyalty program that matters.

A small firestorm over the efficacy of Loyalty Marketing programs broke out over this past weekend thanks in large part to an article written by Joanne Kaufman for the Wall Street Journal.

Ms. Kaufman recounts a telling tale of how her own household purchase behavior adapted to take advantage of rewards programs from Duane Reade to Starbucks to the local pizzeria and shoe store, only to be thoroughly disillusioned by an in-store experience at Duane Reade.

It seems that her son was shopping at the store and had his rewards card rejected with a less than satisfactory explanation from the cashier that Duane Reade was in a “blackout” period prior to launching a new and improved customer loyalty program. According to Ms. Kaufman, worse than the blackout message was the discovery that points previously earned in Duane Reade’s Dollar Rewards™ program would not be honored in the new program.

There are several lessons to be learned here and a few questions raised as well.

First, some background: On Jan. 15, Duane Reade announced it was launching FlexRewards™, a replacement program to Dollar Rewards™, the Company’s previous customer rewards program. The new program was to be in effect on Jan. 16. On Feb. 17, Walgreens announced that it was acquiring Duane Reade, the largest drug store chain in New York City.

The Questions:

1. What influenced the timing of Duane Reade’s launch of a new program when they were (presumably) deep into the final negotiations of the sale?
2. Regardless of the answer to #1, how could someone within Duane Reade, a company recently complimented for its customer facing marketing efforts, have been lulled into allowing the “your old points don’t count” feature to come into play? Have a look at the message on the graphic here “The old card works (just not in our store). I clicked everywhere I could on the program website and could not find an explanation for this disconcerting message.
3. Could Duane Reade have found a better way to communicate the program transition to its members? Why, oh why, does business place the burden of communications on cashiers at the point of sale? It’s an unfair burden on the position with highest turnover in the store and one that does not serve the corporation well.
4. Walgreens has a lightly advertised rewards program “Walgreens Rewards“. Will they do away with this program or will they launch something that allows consumers to earn and accumulate points at any Walgreens-owned property?

Some answers are easier to guess at than others.

The announcement by Walgreens regarding Duane Reade mentioned specifically that it would allow the chain to continue to operate under its own name. That said, launching an upgraded program might have seemed business as usual to Duane Reade marketers. Needless to say, there needs to be some damage control from Duane Reade as an operational faux pas of this nature intensifies consumer ire towards consumer rewards programs.

The most interesting question to speculate about has to do with the future of the Walgreens customer strategy.

The current program “Walgreens Rewards” offers rewards on specified products purchased using a Walgreens Card®. The value proposition does not seem clear or particularly strong and there are many product restrictions which limit earning power for members. One strong program feature is the ability to pass the Walgreens Card at the point-of-sale and instantly be credited for rewards.

As far the new Duane Reade program itself, it seems that the earning power from its predecessor has been reduced. The current offer is for customers to spend $250 to receive a $5 cash back offer. This equates to a 2% earn rate, less than the 5% offered by the previous plan according to the WSJ.

FlexRewards™ offers members lower prices on many items and rewards that can be spent on the spot at point-of-sale or can be saved up for larger rewards. Clumsy paper coupons which could be easily lost by consumers have been traded in for electronic points tracking online. Points issued never expire provided a purchase is made every 26 weeks, a generous definition of an “active” customer in the pharmacy space to be sure.

According to Joe Jackman, Acting Chief Marketing Officer, Duane Reade “customers had spoken and wanted more easily attainable rewards”, adding “half of customers in our old program didn’t even redeem their reward coupons because there were too many restrictions”.

It certainly seems that the strategy cooked up by Duane Reade is headed in the right direction and had increased customer engagement as a key objective. The company even introduced a new “Super Saver” tier to reward higher spending customers at a faster pace and with more flexible rewards.

Contrast the two programs at Walgreens and Duane Reade and you should not be surprised to see either the Duane Reade program extended (in structure if not by name) to include Walgreens stores or some new program from Walgreens that would at least improve upon the current offer. The more inclusive, the better as customers will respond well to a program that allows points accumulation at both Duane Reade and Walgreens stores.

Lessons:

1. Execution nearly trumps strategy these days.  My old boss, Pat LaPointe, coined the phrase “Technology enables, but imagination wins”. Based on what clients are telling me today, I have modified the mantra this way: “Technology enables, imagination wins, but flawless execution will save your job!”.

2. Expectations for Customer Communication are higher than ever. Consumers have access to more information than ever and expect clear, transparent messaging. Anything less sets you up for what Ms. Kaufman called “Loyalty Betrayal”.

3. Staff training and incentives will trigger better program results. Turnover at the point-of-sale is difficult to control but an effort can be made to provide front line personnel with sales aids, inexpensive “take-me’s” and similar POS material to make the job easier for overburdened staff. Offering incentives for those that learn and deliver the message would help also.

Just a few months ago, on these very Loyalty Truth pages, I gave kudos to Caesars Atlantic City and its Total Rewards loyalty program.

During some trying times for the economy in general, and Atlantic City in particular, Caesars AC was making some smart moves to get its loyalty program members back to the casino.

Last week, Caesars AC got my attention again. But not in a good way. You see, they ran a rather bizarre full-page ad in the Sunday NYTimes magazine.

Let’s start with the image in the ad: a well-dressed 30-something guy has a pretty woman to his right. She has one hand on his shoulder and another wrapped tightly around his arm. It looks like they’re at a show. Okay so far, except our guy seems more interested in another woman to his left. He has his lips to her ear and her extended arm appears to be resting on his thigh.

Under the headline “The Life You Were Meant to Live“, the stilted copy reads:

Who is that in Section A, Row 1, Seat 5, having the time of your life? That’s Todd. Flanked by your fiery vixens. Paying no attention to your favorite band on stage. But give credit where it’s due. Todd is an escape artist. And when it’s time for a getaway, he get it’s right.

What!?!

Putting aside the confusing use of the possessive “your”, who are the fiery vixens with Todd? Am I supposed to pretend I’m Todd…on some kind of a three-way tryst? Is this what they mean by “he gets it right?” More importantly, did Caesars’ market research show the ménage a trois market to be a growing demographic?

Personally, I can only think of one word for the ad – Stupid.

Instead of creating a scenario that the largely upscale readership of the NYTimes magazine might be able to imagine themselves in, they’ve come up with a fictional character in a contrived situation that’s a non-starter for anyone not in the “swinger” category.

It of course begs the question, what were they thinking? The only thing I can come up with is that Caesars AC is trying to out Vegas-Vegas.

Sorry Caesars, as much as I like you and your loyalty program, you’re no Vegas. And there are better ways to spend your precious marketing dollars.

Tom Rapsas is a 20 year direct and loyalty marketing veteran and heads up Creative Services at Hanifin Loyalty.  He can be reached on Twitter @tomrapsas

Atlantic City, the famed gambling Mecca about an hour down the coast from me, is on a nasty losing streak. A recent story in the NY Times quoted a top gambling executive as saying “the city is in a death spiral.” Few disagreed.

It seems that after a rough couple of years, 2009 is looking even worse. Every Atlantic City casino but one is seeing a double-digit drop in revenue. The lone exception being the glitzy, feels-like-you’re-in-Vegas Borgata, which is down about 5 percent this year.

The reasons for the decline are many: the rotten economy, competition from newly opened gambling operations in nearby states, and the fact that Atlantic City, like the dwindling number of day-tripping seniors who bus into the city each day, is feeling old and tired.

The most-talked about solution: a cash infusion of a few billion dollars to build new hotels, new attractions, new anything that can start pulling in people again. Which, with the current economic environment, is as likely as me filling a double inside straight flush at the poker table. Or not very likely.

Harrah’s Entertainment ups the ante

In years past, I’ve frequented the Borgata where I’m a member of the My Borgata Rewards program. But on my last two trips into Atlantic City, I ventured to the swanky but hip Caesars, where I joined Total Rewards–the casino loyalty program from  Harrah’s Entertainment, the company behind the Harrahs, Caesars, Bally’s and Showboat casinos.

It appears that Total Rewards has upped the ante over the My Borgata program, by rolling out the red carpet for program members. My evidence here is strictly anecdotal, but I (and a good friend) recently received a bump up not one, but two tier levels to Diamond status. I also received a pair of free weekday hotel stays. (Surprising because, trust me, a high roller I am not.)

It’s obviously a play by Harrah’s Entertainment to get past customers back to Atlantic City and it’s either a smart move or a desperate move, depending on your perspective. I say smart—because rather than gamble on an expensive, and to my thinking, ultimately wasteful mass media campaign, Harrah’s is appealing directly to its customer base for more business.

Granted, they’re digging deep into the base by giving a two-time visitor like me special favors, but my guess is they’re mining the data for a few things: the recency of my visits, my perceived spend level, and my zip code, which tells them I live nearby and should be at a certain income level.

So can Total Rewards really save Atlantic City? It’s a lot to ask of a loyalty program, but it strikes me that Harrah Entertainment is playing the hand it was dealt—and reaching out to its customer base may be its last, best hope. I, for one, hope it works. In fact, I’m about to book a free night for my wife and I right now.

Now, a few words about the Total Rewards communications

The first good thing I can say about Total Rewards is that they actually have a communications program in place. As a member of the My Borgata program, who opted in for e-mail, I cannot recall receiving the first piece of communications from them, digital or otherwise. (It’s good to be King!)

While the Total Rewards postcard and e-mail creative is perfunctory, they do some small but important things right. They recognize me by name and tier level, and occasionally by the casino I visit, Caesars. They’ve also made attempts to cross-sell me into other areas of the property, including their dining and entertainment venues.

But the Total Rewards communications could go even further. A few thoughts, for the people behind the program:

1. Pump up the engagement: I checked and Total Rewards has a presence on both Facebook and Twitter. Why not add these links to every e-mail? And while you’re at it, add an “invite a friend to join” link to each e-mail, as well.
2. Talk to my preferences: I know your part of the Harrah’s empire, but frankly I only joined the program because I like and visit Caesars. So more info on Caesars and less on Vegas and the other brands please.
3. Leverage the community: I know starting your own online community may be a hassle you don’t want to contemplate, but why not use some of the glowing testimonials found on social travel sites like Kayak and Virtual Tourist. This both encourages loyal customers to return and invites them to join the conversation.

Tom Rapsas is a Creative Director/Writer/Strategist. He can be reached at tomrapsas@gmail.com and via Twitter @tomrapsas.

“While not every business needs a Loyalty Program, every business does need a well planned and executed Customer Strategy.” This is one of the loyalty mantras that I share on Hanifin Loyalty and the statement represents a guiding light on the path to innovation in the next wave of Loyalty Marketing.

For some businesses, building a brand so strong, so magnetic, so powerful is the foundation of its Customer Strategy. Achieving this summit is one of the most challenging tasks in business and, if done successfully, virtually precludes the need for a formal loyalty program, certainly one with points or other promotional currency involved.

The World Triathlon Corporation, owner and organizer of Ironman® and Ironman® 70.3 branded events, has climbed this summit, having turned a quirky and semi-dangerous undertaking in 1978 into a worldwide brand that attracts a brilliant demographic and brings tremendous economic impact to its host communities.

With the addition of the Ironman® 70.3 Series, WTC offers more than 50 events on the calendar each year and has the support of advertising partners including Ford Motor Company, PowerBar, Timex, Gatorade, Janus, and Philadephia Insurance Companies.

Ironman Lake Placid is the oldest of 7 US based events, and I was fortunate to be in town for the 10th anniversary race this past weekend. The compelling nature of the brand was on full display with over 2,500 registered athletes and their friends and families burning off nervous energy by shopping in the Ironman® store and patronizing local businesses.

Consider that the entry fee is $575 and that the average tri-bike sitting in the secured transition area is worth $4,000 (my estimate) and you can see that over $1.4 Million in entry fees alone were collected for the weekend and over $10 Million in two-wheeled treasure was waiting for a ride. Multiply these numbers by the 50+ events per year and you begin to understand the magnitude of the Ironman domain.

Ironman may still be a quirky and puzzling event for outsiders to grasp. Some of my friends have challenged the Ironman passion as nothing more than a mid-life crisis for over 40 types, suggesting that buying a new Corvette would be a heck of a lot easier. Others snipe that triathletes are narcissictic, type-A personalities preening their zero-body fat physiques in high-tech fabrics before the crowds. (OK, you’ve got the Type-A part correct).

Let me dispel some myths. As I volunteered at an aid station on the run course this weekend, I saw every size, shape, age, and ethnic origin of athlete pass me by. I would go so far as to say that, if seen in street clothes, many would never be mistaken for Ironman athletes.

I’ve also found that while some of the younger age brackets are the most competitive (30 -39 for instance), I have also noticed that as one moves up in age group, finish times don’t always increase, i.e. there is much more going on here than just signing up for the t-shirt.

Fred Reichheld, the Godfather of Loyalty Marketing, sketched out a continuum of business benefit resulting from adopting an enterprise approach to loyalty. At the end of the rainbow are price premiums. I would venture to say that Ironman, given the nature of the event and level of entry fee, is effective on all levels of lifecycle marketing, (acquisition, usage, retention, cross-sell) and delivers on price premiums across the board as U.S. based events generally sell out quickly after race day each year.

All the praise aside, there is always room for improvement. There is probably a limit on the number of events that WTC can stage each year in the U.S., and more emphasis on triathlon as a youth sport would help fill the funnel with future athletes. The fee structure could price out aspiring Iron-athletes from participating in the future, and the cost of Ironman branded merchandise is obscene at times, spawning a mild “love-hate” relationship with the brand. For instance, a fellow volunteer (himself a 9:44 IM finisher) commented as he pulled on a dollar-store poncho to thwart a rain shower that it would have been worth $70 if it had the IM logo on board.

There are other iron-distance events on the calendar, but WTC has created brand-swagger and is enjoying the price premiums created with its highly emotional participants. The fact that WTC backs up the current frenzy for its branded events with tremendous athlete experience adds glue that keeps people signing up for more. Even their finish line announcer, Mike Reilly, is part of the experience. Mr. Reilly has been the main announcer at the Ironman® World Championships in Kona since 1989, and it is his unmistakable voice that welcomes athletes to the finish line.

There may be some danger to IM that it becomes an elitist event, but then again, maybe that’s what it is all about. The Ironman® distance triathlon is still acknowledged to be the most challenging one day endurance event on the planet, and “if it was easy, everyone would do it!”

I think it’s safe to say that the same applies to WTC’s Customer Strategy.

In the beginning, there were punchcards. Since then, man has created magnetic stripe and bar code cards, smart cards, java rings, and RFID cards. Technology has evolved greatly over the past 25 years, and loyalty sponsors and providers are still seeking the silver bullet of delivery devices.

While we’re busy debating which technology will win out, I wonder if The KeyRing Thing will make a good bridge to the future?

My friend and Loyalty Truth contributing author Jim Kuschill wrote a great article for Colloquy entitled a ”World Without Cards” in which he weighed the pros and cons of whether we needed cards at all. If we’ve learned anything over the past decade or so, it is that the technology or device used as a membership card is the not the sweet-spot of the value chain.

The right strategy, targeting, and value proposition are the keys to engaging consumers in loyalty programs. Get that right, and you could get away with giving members something akin to a gas station bathroom key (the small key attached to a large wooden dowel), and they would carry it.

Admittedly an exaggeration, I hope you understand the point. Sometimes the sexiest technology, after thorough vetting, is revealed to be not much more than a ”solution looking for a problem to solve“.  Jim Kuschill and I debated the added value of smart cards to loyalty program execution for literally years and, in the end, we agreed that it wasn’t the smart card that would make the difference.

What we did learn from our debate was put to the test as we worked with card issuers in Latin America and Europe as they introduced EMV standard chip cards into their markets. The lesson: it was the synergy of technology and circumstances that made the difference.

With many Latin American banks owning a strong acquiring business, we were able to recruit merchants to support POS bonusing and point redemption at POS to pay for purchases. It was this combination of factors that helped us migrate traditional points programs from magnetic stripe to EMV cards and we allowed the smart card to grab most of the glory.

After lots of debate over technology, I appreciate a return to simplicity. That’s why I find a particular brilliance in the Key Ring Thing, highlighted by Good Morning America as part of their coverage of the “best” discount shopping cards. In the GMA piece, Shop Smart Magazine Editor Lisa Lee Freeman profiled the device as she also highlighted her favorite discount cards found on Shortcuts.com.

When I opened my morning newspaper and read another profile of this device, I had to spread the word. The Fort Lauderdale Sun Sentinel chronicled how for $3.97, you can get yourself a high quality PVC card that holds 5 or 6 barcodes of your favorite rewards program. Through the web interface, consumers can select from popular programs or load their own if it does not appear in the list.

Apps to aggregate loyalty cards don’t end there, as My CardStar allows consumers to catalogue their favorites on their iPhone, Blackberry, or Android and JustOneClubCard.com, created by Gregory Pinero, serves as a more casual hobby site for the same purpose.

I like the idea of turning my night-watchman style keychain into something more sleek courtesy of the KeyRing Thing. I like even better having a “wallet” to store all my favorites on my iPhone, though I wonder how many bar code readers are enabled to read from the iPhone screen (an acceptance issue needs to be resolved).

In the end, it just might be that the highest purpose of “high tech” will be to deliver caveman-like simplicity to consumers. For today, the KeyRing Thing delivers on that count.

For tomorrow, who knows? It might even be that the Poken Girl has the answer….

Whether you love technology or struggle to keep up with it, you have to admire how new developments push our limits. The limits I’m talking about are our imagination, our time, and our comfort zone.

Last year’s debate over the use of RFID (Radio Frequency Identification) is quickly giving way to a new battle front, “Neuromarketing“. While RFID devices were challenged by well organized consumer privacy groups such as Caspian for basic breaches of privacy, the revelations of of Neuromarketing seem capable of creating Supreme Court worthy debates.

Neuromarketing was profiled this week on CBS’s 60 Minutes and is explained as a technology that employs a specialized use of MRI scanning called “functional MRI,” fMRI for short.  In layman’s terms, its proponents are touting that we will soon be able to see what is going on inside the brain and decipher what people are thinking.

RFID has been used by Walmart, the US Military and many others to bring efficiency to the supply chain and dollars to the bottom line. Contactless cards were introduced a few years ago in the US and misunderstanding of the technology’s limits has caused some consumers to buy wallets and purses that block signal transmission and others to simply panic that we are all marching headlong into an Orwellian future. The technology does have some risk, though rarely as it is portrayed by the media and consumer protection groups.

Neuromarketing carries a higher sniff test for risk just by virtue of the way it’s advocates describe it. Neuroscientist Marcel Just painted the benefits of the technology as “thought identification” on the 60 minutes segment and one of the leading companies in the industry, Neurosense, stated it has  plenty of clients including “Unilever, Intel, McDonald’s, Proctor & Gamble, MTV or Viacom.” As there are purportedly about 92 neuromarketing agencies worldwide, it’s clear that a lot of resources are being applied to advance the cause.

Each of these technologies has application outside of consumer marketing and maybe that is just where they belong.The question in my mind is how the technology is put into practice in a sensible way that consumers will accept. I can understand that reading minds could be useful to validate live survey responses and focus group chatter. I can also see that a retailer could hone its inventory management by reading the thoughts of consumers passing by a display window with dresses in 3 colors and learning that the green model was most popular.

What I don’t envision is that consumers will accept their thoughts being translated into real-time store promotions or something similar. No matter how “relevant”, having a sales associate in the Apple store walk up and offer an unsolicited suggestion for  the best case for your new iPhone strikes me as just plain creepy.

We’ve been down this road before with chip cards and RFID enabled devices. The premise that personalized service or personal shoppers could be anonymously triggered as the RFID-enabled loyalty card of a “best” customer passed the scanner at the store entrance was not appealing to any survey or focus group respondent I have ever encountered.

The only possible scenario that I consider practical is using a mobile device to opt-in or invite current promotions to be pushed to me before I entered a particular store. Let’s say I am ready to visit Nordstrom and am sitting in the food court having some coffee. If I could open the mobile marketing application on my iPhone listing all of my loyalty program memberships, select Nordstrom and click on “today’s deals”, I would be happy to have specific offers and specials sent to my mobile phone. I could also opt-in to “personal shopper” and, if I qualified in the loyalty program, I would trigger that service upon entering the store (GPS enabled phone, right?).

The debate will rage on and next year the argument may be substantially the same with a different device or technology filling in the blank occupied last year by RFID and today by Neuromarketing. If we keep in mind that business is driven by pleasing the customer and not about advancing a particular technology, then we will have an easier time choosing the path to success.