I was privileged to hear Seth Godin speak this week. Let’s face it, there are many high priced keynote speakers around, and I have listened to several who give an entertaining 45 minute talk, generate a few laughs, but leave me with nothing to take back to the office.

Seth Godin was not one of these. His one hour talk was awarded by hearty and sincere applause from the audience, and I had to drop my pen while taking notes to join in the appreciative celebration.

I have read most of Seth’s books and have admired his ability to capture a short list of important concepts and communicate them in succinct and readable fashion. While introducing Seth, the MC of this event reminded us that typing “Seth” into the search field of any browser will lead you right to Seth Godin. Try it. That is as impressive as any other SEO result I have seen, underscoring his impact on the marketing industry.

As relates to Loyalty Marketing, Seth hit several hot buttons for me. Today there are a variety of descriptive terms used by suppliers and consultants in the business talking about the “Art and Science” of Loyalty Marketing, treating it as “Alchemy”, or otherwise expressing that customer loyalty should be generated through more than rote design. I agree there is an interpretive side to strategy development that in some cases can be equally important as quantitative analysis.

The trouble is, as Loyalty Marketing has become a widely applied strategy to achieve financial results for big brands, the industry has become populated a mile wide and an inch thick with customer loyalty “experts”. Large commercial agencies dismiss loyalty as just one more service that can be provided to a client under an umbrella retainer agreement, and there are still too many cookie-cutter solutions in the market which focus on cost efficiency and ignore customer engagement and results.

Seth Godin challenged the group yesterday, contending that, “competence is no longer important”. He warned that “if you can write it down, a customer can find it cheaper” and suggested that as we allow our creative trade to become more systematized, we risk becoming evaluated on price and delivery, rather than on the greater value we can deliver to our clients.

Seth urged the group to seek to “solve interesting problems” and to strive to “do work that matters”. This really is our calling as loyalty marketers, and the complex digital world we live in will reward this perspective more each day.

There are some interesting and challenging problems to be solved indeed, and the people which find the answers and deliver practical solutions to clients will forge a new wave of innovation in our business.

1. Who will connect the dots to make the concept of Social Loyalty a reality that can be executed and measured by brands?
2. Who will transform retail bank customer marketing from its continuing product focus to a broader customer relationship model that is practical and affordable to operate?
3. Who will turn the key to unlock coalition style loyalty marketing in the United States?
4. Who will find the artful way to engage affluent consumer groups through loyalty programs? To reach those that “have everything they need”, we have to break the mold.

Seth concluded by making the point that we have to be willing to take some chances, to stop being afraid to trial new approaches, and to create the path for brands to follow.

People welcome and embrace leadership. Often there just isn’t enough to go around. Today, there is a big opportunity for a new position of leadership to be established in Loyalty Marketing. I’ve got my machete in hand and am ready to carve the new path. How about you?

I’m sensing a tipping point in how customers relate to loyalty program rewards, and my thinking goes like this: when customers choose which company to do business with, rewards just don’t matter like they used to.

My take is that the classic loyalty reward scheme—earning points toward “hard” rewards for repeatedly doing business with a company—has been trumped by the customer experience. In other words, today’s customer is more likely to opt for a better experience today, than accept a lesser experience that pays dividends down the road.

Lets start with a personal example. I recently cleaned out my wallet of old business and program membership cards. There, I found reward cards for both Borders and Barnes & Noble. Now, I know I have points in both of these programs, but I haven’t engaged with either brand for years. Why? I’ve given all my business to Amazon, which for me offers a better customer experience.

A recent blog by marketing guru Seth Godin points anecdotally to a similar trend toward “experience over rewards” happening in the airline industry. Godin believes that the greater the risk involved with getting a reward—one we have to save for and may never use—the less we value it.

He writes:

Frequent flyer miles, for example, began with the promise that if you flew an airline regularly for months (or even years) you’d get a free flight. The airlines oversold the miles and undelivered on the free flights, though, so the reward started to lose its perceived value—too much risk that you wouldn’t get the prize you wanted. Many of the frequent flyers I know have ceased to ’save up’ and now use their miles for upgrades, moving the benefit closer in time.

Godin’s point is backed up by a recent article in the Miami Herald titled: “Are loyalty programs worth it?” Travel writer Christopher Elliott cites several real-life examples of customers leaving airline programs, because the rewards are just too hard to earn. He points to a recent stat that seat requests for USAir reward flights had an availability rate of 10% and muses, no wonder “there are several trillion unredeemed miles floating around out there”.

In another sign of the sea change, several companies are now offering customers “loyalty rewards” with no points, or long-term loyalty, needed. Take the telecomm space, where both Verizon and Optimum have recently launched reward programs with merchant discounts, special promotions and exclusive content—with no strings attached. Prove you’re a customer and you’re in.

Why is the trend moving toward more automatic and instantaneous recognition of customers? Godin attributes the change to the Internet, stating “one of the many things the web is changing is our focus on now”. I see his point. Now more than ever, today’s consumer wants things at the speed of the Internet, whether it’s information, customer service—or a perk for being a customer.

Is this the beginning of the end of long-term loyalty rewards?

The floor is open. What do you think?

If you want to find the perfect boat, you’ve got to know what you want and make some tough decisions. The same holds true for setting the course of your Loyalty strategy.

Living in proximity to water, there are many excuses to buy a boat and, with two of the biggest boats shows in the world on the doorstep, the range of choices is incredible. Let’s say you’re in the market for a center console outboard fishing boat, somewhere between 21 – 32 feet. The Fort Lauderdale International Boat Show and the Miami International Boat Show offer a breathtaking array of options.

By the time you have scoured these shows and are nursing the blisters on your feet, you will realize that there is not one boat that will “do it all”.  With every salesperson claiming their boat offers a “dry ride and fish-ability”, you have difficulty choosing a favorite and rationalizing a wide range of prices.  The happiest boat owners I know solved the problem by refusing to compromise. They knew what they wanted and landed on the boat that was the best in their chosen niche.

For example, the best flats boat available (in my opinion) comes from Egret while the offshore boat of highest magnitude is made by Yellowfin. These boats not only ooze quality but deliver on their promises, and are guaranteed to evoke complements and knowing glances when at the local marina or boat ramp.

Sponsors planning their Loyalty Marketing strategy are in much the same fix.  A quick story illustrates the point. A short while back, I worked on the frequent stay program for a mid-size hotel chain that wanted to stand out in the crowd and attract the “road warrior” customer that was their bread and butter. Dutifully, our team delivered a competitive matrix of programs in the market capturing all known features and benefits.  Looking at the final product, nearly every box was checked in the grid. That’s meant to say that all the major brands had tried just about everything and “copycat” was the favorite play of the day.

We affixed the chart to the wall of our planning room and named it the “what not to do” matrix. The sub-title was “what we won’t allow ourselves to do”, meaning that we would not let the client fall into the trap of sameness that saturated their business. After some work, we recommended a loyalty program design that was unique and it was successfully launched and operated for a number of years. It survives in the market today with some modification.

Having just read Seth Godin’s gem of a book The Dip, I think he would agree the loyalty business is living through a “Loyalty Dip” at the moment. Sponsors who adopt a generic strategy to “reach everyone” will meet with disappointing results and providers that stick with the tried and true may find themselves in a dead end. Those introducing innovation to the business (e.g. through the mobile handset and with social media) will survive the dip and emerge as leaders for Loyalty 2.o.

The point is, be an Egret or a Yellowfin, but please be somebody.

If you want to find the perfect boat, you’ve got to know what you want and make some tough decisions. The same holds true for setting the course of your Loyalty strategy.

Living in proximity to water, there are many excuses to buy a boat and, with two of the biggest boats shows in the world on the doorstep, the range of choices is incredible. Let’s say you’re in the market for a center console outboard fishing boat, somewhere between 21 – 32 feet. The Fort Lauderdale International Boat Show and the Miami International Boat Show offer a breathtaking array of options.

By the time you have scoured these shows and are nursing the blisters on your feet, you will realize that there is not one boat that will “do it all”.  With every salesperson claiming their boat offers a “dry ride and fish-ability”, you have difficulty choosing a favorite and rationalizing a wide range of prices.  The happiest boat owners I know solved the problem by refusing to compromise. They knew what they wanted and landed on the boat that was the best in their chosen niche.

For example, the best flats boat available (in my opinion) comes from Egret while the offshore boat of highest magnitude is made by Yellowfin. These boats not only ooze quality but deliver on their promises, and are guaranteed to evoke complements and knowing glances when at the local marina or boat ramp.

Sponsors planning their Loyalty Marketing strategy are in much the same fix.  A quick story illustrates the point. A short while back, I worked on the frequent stay program for a mid-size hotel chain that wanted to stand out in the crowd and attract the “road warrior” customer that was their bread and butter. Dutifully, our team delivered a competitive matrix of programs in the market capturing all known features and benefits.  Looking at the final product, nearly every box was checked in the grid. That’s meant to say that all the major brands had tried just about everything and “copycat” was the favorite play of the day.

We affixed the chart to the wall of our planning room and named it the “what not to do” matrix. The sub-title was “what we won’t allow ourselves to do”, meaning that we would not let the client fall into the trap of sameness that saturated their business. After some work, we recommended a loyalty program design that was unique and it was successfully launched and operated for a number of years. It survives in the market today with some modification.

Having just read Seth Godin’s gem of a book The Dip, I think he would agree the loyalty business is living through a “Loyalty Dip” at the moment. Sponsors who adopt a generic strategy to “reach everyone” will meet with disappointing results and providers that stick with the tried and true may find themselves in a dead end. Those introducing innovation to the business (e.g. through the mobile handset and with social media) will survive the dip and emerge as leaders for Loyalty 2.o.

The point is, be an Egret or a Yellowfin, but please be somebody.