The three key trends identified by Parissa Behnia while attending the Customer Relationship Management Conference (CRMC) on behalf of Hanifin Loyalty LLC include the following.

1. The Promise of Customer Data: Collecting and accessing customer data isn’t just for marketing purposes anymore – it serves to inform the structure and strategy of the overall business
2. Have the Courage to Be Bold: To achieve full business potential, retailers need to become “bold” and walk out their brand promise through the delivery of customer experiences that differentiate and excel
3. Brick and Mortar retail is not dead!: Offline and online worlds are colliding and retailers need to identify and leverage “why” their physical location exists to understand how it can win over pure online commerce

We wrap up our 3 part series with discussion of Trend #3 today.

Hope for Brick & Mortar Retail
Sarah Lacy, Senior Editor of TechCrunch! stated that we are witnessing the revenge of the brick and mortar stores. Even though e-commerce is 10% of retail sales, it happens to be a very disruptive 10%. Many retail models have been turned on their heads because of this new way of shopping, selecting and purchasing products.

The way things were “always done” are no more and the reality is that there is some scrambling to keep up with mobile and other technologies to keep customers engaged, loyal and happy.

The original ways of doing business online were driven by convenience and low price. Over time, the online shopping experience has been transformed to include high touch or human driven experiences (e.g., customer recommendations, “people also bought” messages, live customer chats, etc.) – also known as curation.

Really, what’s happening is that offline and online worlds are colliding. As customers continue to transact online or on their Smartphones, these transactions are enhanced using real world experiences thanks to connections with others on these sorts of platforms: Yelp, Groupon, Foursquare, Twitter and Shopkick.

Ultimately, Sarah rightly pointed out that in some cases, it’s not that physical location exists, it is the why that makes physical location win over pure online commerce.

She recommended four strategies to improve brick and mortar retail’s chances:

Strategy 1: Play up your niche. It’s difficult to buy maternity clothes or food online. Celebrate that natural advantage over online but you can use online to enhance the experience.

Strategy 2: Pilots are your friend… There is nothing wrong with test and learn.

Strategy 3: Barbell. If something is best done online, then put it online. Make sure to have several high touch points in the customer journey to provide/reinforce what online can’t.

Strategy 4: Service. Nordstrom is an excellent model of service in this social commerce world. Aspire to that level of service and people will always come back to you.

Really, the most interesting part of the keynote was her level of optimism for brick and mortar. All is not lost and now is an excellent opportunity for traditional retailers to leverage the best of both worlds.

The three key trends identified by Parissa Behnia while attending the Customer Relationship Management Conference (CRMC) on behalf of Hanifin Loyalty LLC are listed below. We share more about Trend #2 today.

1. The Promise of Customer Data: Collecting and accessing customer data isn’t just for marketing purposes anymore – it serves to inform the structure and strategy of the overall business
2. Have the Courage to Be Bold: To achieve full business potential, retailers need to become “bold” and walk out their brand promise through the delivery of customer experiences that differentiate and excel
3. Brick and Mortar retail is not dead!: Offline and online worlds are colliding and retailers need to identify and leverage “why” their physical location exists to understand how it can win over pure online commerce

Have the Courage to Be Bold

Is your company bold? Does your company have the courage to be bold? The answer to these questions may be the difference between the success of Audi the last few years and the difficult tale of GM during the same time period.

Shaun Smith, Author & Partner, Smith & Co. spent an energizing morning talking to CRMC attendees about what defines a bold organization and how its boldness manifests itself in how it relates to customers, prospects and employees alike.

Bold firms share these characteristics:

1. Stand Up – They know what it is they believe in
2. Stand Out – They are remarkable and different
3. Stand Firm – The build communities for employees and customers to create sustainability around their brand

Why is it so important to be bold in either one of these three ways? It’s because “Purpose” is to be considered the fifth P of marketing. Now more than ever, companies need a raison d’etre to stand out and be compelling for their customers and prospects.

Mr. Smith shared an example to illustrate each point:

Stand Up Example

The Six Senses resort in Maldives is a prime example of an organization that stands up. In this case, it’s protecting the environment as much as possible. Their main value is concern: for the environment and for an exquisite customer experience.

Every part of this resort reinforces the value. When guests arrive by seaplane, they are given a bag for their shoes in keeping with the “no news and no shoes” policy. There is no television or any sort of outside access because the purpose of this resort is luxurious relaxation. In respecting the environment, they are vigorously devoted to a recycling and reuse program. 50% of profits they’ve made from their own purified water go directly to parts of the world where there is no access to fresh water.

All of this reinforces the brand message of “intelligent luxury”.

Stand Out Example

Unlike many luxury brands, Burberry has seen tremendous profits of late. Instead of going into a protective mode, Burberry took the time, effort and energy required to differentiate the brand and its quality vis a vis the competition. The company invested heavily in mapping the customer journey such that they identified and understood all angles of opportunity when a customer evaluates Burberry product.

Burberry has mastered the art of democratic luxury and, In as many ways as possible, they try to attract people to the brand and to interact with the brand. Burberry stands out because it engages in infectious communication.

They create “wow” in as many ways as possible in their customer experience. Their artofthetrench.com has 400K loyal customers who uploaded pictures of themselves onto the site. Also, they brought the masses to the runway by having 3D fashion show screening events, showing these same fashion shows real time on the internet and added the ability to order Burberry product from an iPad app.

Stand Firm

Zappos is a perfect example of a company that “stands firm” in that they walk their talk. Though it appears the sell bags, clothes, shoes, etc., what they actually sell is service and what they deliver is happiness.

They are committed to their culture not only with how they interact with their customers but also how they engage with each other inside the company. Culture is so important to Zappos that if it appears during training that a new hire will not be a good cultural fit, they will give that person $2K and terminate the relationship.

By standing firm, Zappos creates rites and customs that are guideposts for its values. These rites and rituals ranging from real time engagement with customers on social platforms to quirky office meetings and recognition activities within headquarters.

Taken together, Zappo’s is able to continually reaffirm its corporate identity and stand firm as it recommits to its values.

Summer is the time for road trips.

Since you can’t be everywhere at once, innovative marketer Parissa Behnia attended the Customer Relationship Management Conference (CRMC) on behalf of Hanifin Loyalty LLC while I was on my way to Buffalo New York.

CRMC has become the de-facto focal point to explore new trends in retail marketing. It is also a central place where Social CRM is being defined. Parissa filed her conference report for The Wise Marketer, and Loyalty Truth offers this three part series to break down three key trends exposed during the event.

The three key trends in retail and loyalty marketing that we plan to cover include:

1. The Promise of Customer Data : Collecting and accessing customer data isn’t just for marketing purposes anymore – it serves to inform the structure and strategy of the overall business
2. Have the Courage to Be Bold: To achieve full business potential, retailers need to become “bold” and walk out their brand promise through the delivery of customer experiences that differentiate and excel
3. Brick and Mortar retail is not dead! :Offline and online worlds are colliding and retailers need to identify and leverage “why” their physical location exists to understand how it can win over pure online commerce

Trend #1: The Promise of Customer Data

At a great conference like CRMC, the expectation is that you will see a lot of talented people who are “doing the work” showcase their excellent results. And in this year’s conference, everyone exceeded expectations. There is always one person, though, who encapsulates all of the complex strategic issues in a compelling and easy to understand way. And this year, that person was Charles Chapek, VP CRM of Ann, Inc.

Mr. Chapek shared that not too long ago, CRM practitioners wished for certain types of data that seemed woefully out of reach. Now we have an overflow of millions of data points, and while no one is complaining about this more complete view of our customers including what they are doing and saying, we’re having trouble managing and classifying all of it.

Beyond collecting the data, marketers are tasked to make sure to provide exquisite care for their customers because they expect us to know what they are doing and saying at all times in real time. As great as “real time” is – it is also fraught with strategic danger. It is easy to lose sight of the big long term picture of the customer if we treat him/her episodically as opposed to building a longer term and more robust relationship.

The point isn’t campaign ROI. The point is an evolution towards lifetime value.

Why is this global lifetime value so significant? It’s because it is more than the sum of campaign ROI parts. This new access to a data enabled 360 degree customer view impacts store layout/location (if also brick and mortar), merchandise selection, hours, access, communication channels and other parts of running a retail business.

The long and the short of it is that collecting and accessing the data aren’t just for marketing purposes anymore. Their function informs the structure and strategy of the overall business.

As soon as we get to the point that we fully appreciate and understand the strategic implications of this new data world order in which we live, the more successful we will be in serving our customers.

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.

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 21st Annual Card Forum took place last week in Marco Island, Florida. The conference synopsis which follows was originally published at www.TheWiseMarketer.com as filed by Bill Hanifin, North American Contributing Editor.

Register here for a free subscription to the Wise Marketer

The 21st Annual Card Forum and Expo has recently been held in Florida and, while the banking and card markets in the US might be reeling, the quality of presentations and attendees was superb.

Bill Hanifin, Managing Director of Hanifin Loyalty, reports that according to Bruce Kerr of Loyalty One USA and Laurence Booth of Amex Bank of Canada, the loyalty market in Canada is “holistically engaged”, with some nine in ten Canadian households actively engaged in a loyalty programme (the US figure is one in three). In order to break through the clutter, Amex has worked with Air Miles Canada to revamp and relaunch its Platinum Credit Card in 2008, breaking through the traditional co-brand model, with gratifying results.

According to Jim McCarthy, Head of North American Financial Institution Sales, Visa, payment cards are making inroads into cash and cheque payments which, in the US, have seen their share of annual Personal Consumption Expenditure fall from 61% to 47% over a few years. Consumers increasingly shop on value, are in control of their commercial relationships, and are tending toward more judicious use of credit cards.

According to McCarthy, the debit card will be the key product going forward for most issuers. He reaffirmed that rewards and loyalty programmes are here to stay and that providing value and control while encouraging responsible choices will contribute to overall card loyalty. McCarthy quoted a Wells Fargo study among university students which revealed that, as the result of a financial literacy campaign, late fees in the test group dropped 42%, overdraft charges were down 40%, and past due accounts declined 55%, while card volume spend increased by 22%. The results clearly indicate that banks offering solid financial guidance can separate themselves from the competition.

A panel of ‘Retail Loyalty Leaders’ including Best Buy, Macy’s and Saks Fifth Avenue, moderated by Colloquy’s Rick Ferguson, focused on the importance of loyal customers in a downturn, Aubyn Thomas of Macy’s said that loyal customers continued to shop during the downturn and fellow panelists agreed that it was their most loyal clients who saved the day when the economy worsened. As a result, none of the retailers were willing to reduce investment in their frequent shopping programmes. Instead, they recommended that better use of transactional and customer data would drive efficiency in communications and reduce programme operating costs. Saks has encouraged associates to work harder at building relationships with clients and to use the CRM tools already deployed.

At the best of times, there are challenges in predicting customer behaviour in any market, but the stakes are raised to do so accurately in a down market. According to Lightspeed Research’s Joel Stanton, to successfully understand and predict customer behaviour, a robust, holistic view of the customer is required and that simply focusing on one relationship or one product is not enough.

This article is copyright 2009 TheWiseMarketer.com

The 21st Annual Card Forum took place last week in Marco Island, Florida. The conference synopsis which follows was originally published at www.TheWiseMarketer.com as filed by Bill Hanifin, North American Contributing Editor.

Register here for a free subscription to the Wise Marketer

The 21st Annual Card Forum and Expo has recently been held in Florida and, while the banking and card markets in the US might be reeling, the quality of presentations and attendees was superb.

Bill Hanifin, Managing Director of Hanifin Loyalty, reports that according to Bruce Kerr of Loyalty One USA and Laurence Booth of Amex Bank of Canada, the loyalty market in Canada is “holistically engaged”, with some nine in ten Canadian households actively engaged in a loyalty programme (the US figure is one in three). In order to break through the clutter, Amex has worked with Air Miles Canada to revamp and relaunch its Platinum Credit Card in 2008, breaking through the traditional co-brand model, with gratifying results.

According to Jim McCarthy, Head of North American Financial Institution Sales, Visa, payment cards are making inroads into cash and cheque payments which, in the US, have seen their share of annual Personal Consumption Expenditure fall from 61% to 47% over a few years. Consumers increasingly shop on value, are in control of their commercial relationships, and are tending toward more judicious use of credit cards.

According to McCarthy, the debit card will be the key product going forward for most issuers. He reaffirmed that rewards and loyalty programmes are here to stay and that providing value and control while encouraging responsible choices will contribute to overall card loyalty. McCarthy quoted a Wells Fargo study among university students which revealed that, as the result of a financial literacy campaign, late fees in the test group dropped 42%, overdraft charges were down 40%, and past due accounts declined 55%, while card volume spend increased by 22%. The results clearly indicate that banks offering solid financial guidance can separate themselves from the competition.

A panel of ‘Retail Loyalty Leaders’ including Best Buy, Macy’s and Saks Fifth Avenue, moderated by Colloquy’s Rick Ferguson, focused on the importance of loyal customers in a downturn, Aubyn Thomas of Macy’s said that loyal customers continued to shop during the downturn and fellow panelists agreed that it was their most loyal clients who saved the day when the economy worsened. As a result, none of the retailers were willing to reduce investment in their frequent shopping programmes. Instead, they recommended that better use of transactional and customer data would drive efficiency in communications and reduce programme operating costs. Saks has encouraged associates to work harder at building relationships with clients and to use the CRM tools already deployed.

At the best of times, there are challenges in predicting customer behaviour in any market, but the stakes are raised to do so accurately in a down market. According to Lightspeed Research’s Joel Stanton, to successfully understand and predict customer behaviour, a robust, holistic view of the customer is required and that simply focusing on one relationship or one product is not enough.

This article is copyright 2009 TheWiseMarketer.com