Get innovative, or get left behind!

Last month, 8 innovative companies were recognised for their pristine efforts in loyalty…I’m talking the Annual Colloquy Loyalty Awards.  Not only do these awards recognise innovation & creativity in loyalty but also salute their overall contribution to the ever expanding loyalty industry.

The expansion of loyalty programmes both internationally and locally has made the loyalty playground a very cluttered and competitive one. Whilst customers are overwhelmed by choice in the market place, companies are grasping for share of wallet. Loyalty marketers can no longer ignore the loyalty clutter and promiscuity out there and The Colloquy awards, therefore, remind us that there is no reason why companies wanting loyalty from their customers should settle for a one size fits all strategy. Innovation is the key to inventing a unique, appealing, sustainable business wide strategy.

Let’s take a snapshot of this year’s winners:

Master of Enterprise Loyalty: Caesars Entertainment

“The Master of Enterprise Loyalty Award is presented to the company that executes an
organization-wide strategy that shifts its focus from the product or channel to the customer.”

Caesar’s Entertainment unlocked the power of its loyalty programme by enhancing its data capabilities to better segment its customer base and enhance its online presence and tier management strategies. This led to personalising not only the online experience but spread this new strategy across all customer touch points.
The business wide strategy incorporated 5 key pillars which led to a combination of results such as a 30 % increase in customer value, 20% faster redemption, increased revenue of 18% to mention a few.
The 5 pillars included:

• A completely revamped online presence to better anticipate and deliver on guest needs
• An attitudinal segmentation model – to identify guests by their entertainment motivations
• Tier recalibration – educated & encourage guests to move up the various tiers
• Real-time casino marketing - developing exclusive technology (proprietary of Caesars) that triggers messages to the guest as they visit various parts of casino and do certain activities in real time
• Choice hospitality – recognizing those members who reach elite status

Loyalty Innovation in Financial Services (North America): CitiBank

Citibank needed to revamp its loyalty programme’s online offering, Citi Thank You, as research showed that visitors to their website found it cluttered and difficult to navigate. A decision was made to move from a mass information style “the more we advertise the better” approach to a “less is more” web presence.
The most fundamental part of the puzzle was missing – the ability for members to redeem their points online and use those points towards their online shopping purchases.
The approach involved creating an online retail experience second to none, tailoring marketing communications and adverts to suit their customers’ individual needs and relooking their partner strategy to further add value to their rewards strategy.
By fine tuning their online presence, enhancing their customer experience and completing the Thank You lifecycle by allowing for online redemption, CitiBank Thank You saw a rise in the time spent by visitors to the website by 17%. Online orders rose by 32%, year on year, and they saw an astounding 47% increase in merchandise redemptions.

Loyalty Innovation in Financial Services (International): ANZ Banking Group

ANZ Banking Group (Australia) had come to realise that it needed to revitalise its loyalty programme, ANZ Rewards. The first port of call was to devise a retention and engagement strategy through relooking its overall value offering. This meant reminding their members of the overall value of their membership and how they can utilise it better. They also wanted to increase the participation in the programme among its members.
The plan included splitting their customer base into 4 segments based on profitability, using point expiration as the opportunity to start the conversation with their members. The campaign included re-engaging with their inactive members to make them aware of their point’s balances, when they were due to expire and what they could do to with their points.
It also included giving the members a gift card to the total of their total points balance or expiring points balance.

“It helped ANZ determine if customers were open to redeeming all their points at once and it showed which value best increased engagement."

This campaign saw a 45% response rate,which was 225% above their target.

Innovation in Loyalty Marketing (North America): Walgreens

Walgreens launched their loyalty programme, Balance Rewards, in September 2012. By May 2013, they had a membership base of over 72 million. The foundation of the loyalty programme was built on 3 key pillars: ease, value and wellness. Through determination to be not only be constantly innovative but also highly relevant to their customers, Walgreens successfully created a loyalty programme that features easy enrolment, instant points & rewards for online and offline purchases and wellness services as well as points for improving your lifestyle through healthy behaviour.

In a short span on 7 months, Walgreens saw their members making repeat purchases and increased engagement. They saw and increase of 4.3% over the same period the previous year. In addition, the average basket size increased by 4.7% over the previous year.

Innovation in Loyalty Marketing (International): Air Miles Rewards Management

Air Miles took advantage of the post-holiday period in the United Arab Emirates where consumers start to feel the pinch financially. They did this by multiplying the rate at which members earn miles. The plan here was to encourage spending with partners. Their key message for this strategy was “By spending money now, you could save in the coming year.”

However, not only did they offer to multiply the amount of points that could be earned, they attached 2 competitions to this campaign where members get entered into a lucky draw to earn one year’s worth of shopping vouchers (worth $ 7600) or stand a chance to win 5 million Air Miles through a radio competition.

The results speak for themselves. Air Miles saw a 360% return on investment which ended up being 36 times its expected target. In total consumers spent $110 million across the Air Miles partners, a 49% increase from the previous year.

Loyalty Innovation in Retail (Global): Coles

Coles retail chain, the National Australia Bank and Shell formed the Flybuys rewards programme in 1994. However, over the last few years, Flybuys saw a drop in retention and a low investment which led to Coles buying full ownership of the programme which led to its re-launch in 2011.
The new approach for Flybuys was to simplify the programme and offer more compelling rewards based on the data they collected about their customers.
Some key changes were made which included:

• Simplifying the programme meant that the average person on the street should be able to understand the earning and burning process with limited grey areas of understanding
• Providing more points, partners and rewards
• Enhance the Flybuys card by allowing members to load cash onto the card and let it serve as a gift card

“In 2012, Coles sent out 17.3 million new Flybuys cards, enough to stretch from Melbourne to Brisbane, to virtually every household in Australia.”

Results showed a 12 fold return on its marketing investment and an increase of active cardholders of 47% (6.9 million).

Loyalty Innovation in Travel/Hospitality (Global): The Hertz Corporation

Hertz, one of the leading car rental agencies in the world, used to offer 2 distinct loyalty programmes. One was focused on service based opertations, the other, points based. Participation in the service based programme was higher than that of the points based programme.

With little to no clear differentiation between the two, Hertz decided to create a new loyalty programme called Gold Plus Rewards where they migrated their existing members from the original two programmes all into one.  The aim: to improve customer rental service and serve members with one streamlined loyalty programme.

Benefits of the new programme include:

• mobile alerts “called Carfirmation” – confirming all bookings in real time via mobile devices
• eReceipts e-Return  services Hertz Gold Choice, a service that allows customers to change their vehicles on the spot

Hertz spread the  launch campaign through multichannel approach, ensuring that the news and education of the new programme would reach all customers where they were.
Hertz saw incredible results such as a 99% increase in enrolment over the previous year. A 178% increase in members using points on their rental transactions.

Loyalty Innovation in Other Industries (Global): St. John’s Transportation Commission

Canada’s Metrobus’s m-Points loyalty programme was the first of its kind and proved that a loyalty programme works for the industry of mass transit. After many years, the programme began to lose its spark. Metrobus therefore felt that a compelling approach to reignite the programme was to re-launch with a joint partnership with Canada’s Air Miles Reward programme.

The combined offer included one reward mile for every two taps of a passenger’s m-card on Metrobus. An integrated communications strategy was delivered via each partner’s communication channels.

Air Miles helped boost Metrobus ridership with an increase of 6% and saw an increase of 54% in the online purchases of the m-card.
According to their latest findings, 44% of Metrobus riders opted into earning Air Miles instead of m-points.

Ros Siddle, Marketing & Loyalty Research Manager, Truth

Acquisition stats are so passé!

Hooray! You have 20 million loyalty members! But how many of them are active and what does this mean for your business?

Colloquy release a consolidated annual report of loyalty activity in USA called The Loyalty Census. Each year they analyse membership growth and factors attributing to this growth. This year's census saw a massive increase in loyalty memberships across the US (up 26.7% to 2.65 billion).

Being in the loyalty industry, I can’t help but notice how South Africa has adopted this rise in loyalty programmes with every industry wanting a piece of the loyalty pie! Unfortunately, we have no official stats for the South African market place to compare with the U.S.

However with the expansion of loyalty programmes and therefore number of members, how many of these are really active? Despite the fact that loyalty programmes are aimed at incentivising members for shopping or engaging with your brand, why is there a decline in active memberships as reported by Colloquy?

Active membership refers to the number of times a member has engaged with the programme (at least once) over a period of 12 months or otherwise stipulated by the programme. The number of members vs. active members shows a large divide.

“4.3% is the drop in loyalty programme active membership between 2010 and 2012.”

Naturally, there is huge acquisition at the initial sign up process but the drop off rate in months to come is almost equally as huge. Based on these facts, it is clear that the active numbers are not aligned and the hard work starts when needing to retain these customers after acquisition. It’s all about engagement!

“Typically, new programmes acquire members and can’t keep them engaged…..both new & existing programmes are failing to strike the chord with members.” Colloquy 

With competition so rife in the loyalty industry across all sectors, how do you ensure your loyalty programme is top of mind? What’s causing your loyalty card to be shoved behind your competitors’ card? Here are just 4 suggestions for consideration:

1. Loyalty is no longer solely “owned” by the retail and airline industries. There is rapid growth in loyalty in other sectors which can be attributed to an increase in partner programmes with competing brands to offer a more compelling loyalty offering together with the expansion of innovative loyalty programmes using real time POS technology.

2. The competition is heating up.  There is no limit to the amount of programmes your customers can join and it is just so easy for them to do. Companies are eliminating the barriers to complicated sign up processes and are really tallying up members with a quick & effective registration processes via in-store, online or via mobile. Also, with so many choices for programmes offering similar benefits for similar behaviour in the same sector – how do you make sure your programme is top of mind? 

3. Racking up the memberships at a fast pace at the registration step is one thing…staying fully engaged & relevant is whole new ball game.  Companies who get the engagement element right are streets ahead of those who focus their energy on other activities in the loyalty lifecycle.

“Talk to me about what I want and need, not what YOU decide is what I want and need.”

4. Data is the kryptonite of loyalty. There are more channels than there have ever been to collect data. Data obtained by companies is wasted if not mined properly. Use your data to be relevant and offer your members an experience tailored to their wants and needs.

True engagement focuses on customer loyalty not acquisition stats.

                                                                         By Ros Siddle, Marketing & Loyalty Research Manager, Truth

The untapped power of social data: The new social customer & how they impact your current marketing strategy

The future (very near future) of loyalty is social and mobile…this was the headline of a conference Truth attended earlier this month, hosted by Marketing Mix.

In fact, global players in loyalty have already adopted mobile as a core offering in loyalty…Walgreens is a great example of how a brand amplified their member base through its innovative mobile app offering. Mobile platforms allow for real time points earning & redemption which is one of the key benefits a customer rates a loyalty programme by…real time rewards.
However, it goes beyond mobile… 

Has it ever occurred to you that the information your customer provides to their social networks may be of some value…more valuable than the “like” or “following” to your brand?
Amanda Cromhout, CEO of Truth, highlighted this in her presentation at the conference. It’s no longer enough to look in isolation at age, gender, intention to purchase and basket size. We now need to look one layer deeper.... social data! Social data includes information such as relationship status, brand/competitor likes, interests & circle of influence.

Overlay demographic data, psychographic data, transactional data AND social data to create the bigger picture of your new customer…the social customer.

Use the new insights derived from the combination of data listed above to market to them about what is relevant, making their entire experience with your brand far more meaningful across all touch points of their life.

This is particularly significant to the loyalty industry. The loyalty game itself is evolving. The basics of loyalty was to “swipe, collect & earn” whether it be via a loyalty card swipe, coupon collection or mobile application. We're now in a new era of share and earn….using social media platforms to reward customers for their social media behaviour & engagement relating to a brand.

 MJ Khan, head of social at Quirk delved into the new persona of the social customer and how they impact our strategies as marketers. The social customer is someone who has taught us to improve online reputation management strategies and use social CRM as an opportunity to improve this.

The social customer can offer your brand more than you know:

1) One of the most powerful attributes is the power of brand advocacy. When your brand doesn’t  have the time to respond to on social media, your community of social customers jumps in & responds for you

2) We tend to forget that social media is about people not technology. The premise of social media is not new to humans because connecting to others is not new. So let your customer connect with you and other customers about things that interest them…brands need to move beyond using social media as a selling tool and use it as an engagement tool

3) Engagement is not a strategy…engagement should be used as a tool

4) Yes we like to listen, yes we like to learn...but can these new social customers' input change business output? Leverage what you can learn from the social customer through your new engagement tool

Ignore your brand's social customer insights at your peril!

                                                                         By Ros Siddle, Marketing & Loyalty Research Manager, Truth

MySchool comes out tops at International Loyalty Awards

The Loyalty Awards recognize excellence, innovation and best practice in the loyalty industry across Europe, the Middle East and for the first time this year, Africa. The event is hosted by Loyalty Magazine and  their key sponsor Aimia. 

Homegrown CSR loyalty programme, MySchool MyVillage MyPlanet has won the ‘Best Corporate Social Responsibility Initiative Linked to Loyalty’ award at the Annual Loyalty Awards held in London earlier this month.

The winning campaign ‘Doing Good Is Good Business’ made it onto a shortlist of 200 programmes from 20 different countries with more than 80 leading brand names. MySchool went up against leading global brands such as Turkey’s leading telecommunications network, Turkcell and UK’s Pets at Home company’s VIP rewards programme which is linked to CSR.

 “For MySchool MyVillage MyPlanet to receive international recognition is testament to the impact the programme has had and an example of how ordinary citizens and retailers can jointly contribute significantly to society at large”, says Pieter Twine, MySchool MyVillage MyPlanet General Manager.

MySchool MyVillage My Planet is a coalition programme (multi partnership) as well as a leading CSR initiative where by members select a beneficiary (schools/charities) they would like to support. Every time a member swipes their MySchool card at participating retailers, up to 5% is donated to their beneficiary.

Winning performance:

• Since it started in 2009, the programme has donated over R 200 million to its beneficiaries
• In 2012 alone, it raised more than R36 million for over 10 000 beneficiaries
• On average, the programme gives back R3 million every month
• The programme has over 700 000 active members
• The programme signed up 136 new beneficiaries in 2012 which saw the value of funds raised increase by 23%

Well deserved MySchool! It's grear to see a South African programme came out tops!

                                                                          By Ros Siddle, Marketing & Loyalty Research Manager, Truth

Netprophet – where great entrepreneurs in digital come together

Highlights from Netprophet Conference in May

The recent Netprohet conference proved once again that anyone can have a dream and turn it into a reality. Netprophet brings together a group of entrepreneurial leaders in digital marketing space from South Africa and around the globe. These entrepreneurs share their success stories with you detailing how their determination and innovative business ideas got them to where they are today.

Amongst the speakers this year were Mike Butcher, Editor of TechCrunch Europe; Andre DeWet GM of PriceCheck; Stuart Forrest CEO of Triggerfish Animation, Bob Skinstad ex South African Springbok  rugby player and now Director  & shareholder of Itec Innovate (Pty) Ltd & Justin Stanford co-founder & CEO 4Di Group to mention a few.

Erik is the Co-Founder of FONK, both Amsterdam and Cape Town based agency who specialise in multi touch devices. His presentation, “Tangible magic of the digital era”, focused on how people are losing the tangible side to things due to digital innovations such as online shopping, dating and living in general and how quickly those intangible things can disappear at the touch of a button. We are losing touch due to our intangible products/services linked to our mobile devices such as virtual friends, virtual money and virtual books etc. When we switch off our mobile device, we switch off the interconnected world we have created.

The argument: is digital enough and will it overtake the need consumers still have today to physically touch things before making a purchase? Erik says that the way forward will be the creation of symbiosis between reality (touch) and virtual/digital (intangible).

The point being that people are still willing to pay more for a “real” in-store experience vs. a virtual online one.  Why do we not flitch at paying up to R12 for a newspaper hardcopy but pull up our nose when we need to pay for something online like an app? We have created a culture where online content is expected to always be free because online content has credibility issues when it comes to being authentic. Nothing is more authentic than walking into a store, choosing a garment, feeling it, smelling it and trying it on. People look for the trust they receive from using their senses to smell & touch a product and they don’t mind paying for that trust and value. Anyone can post anything on the internet and sound like they know what they are doing. So the fight for authenticity from a digital perspective continues….

This reminds me of Truth’s mantra that customer centricity is driven from combining the ‘science and soul’ of retailing.  The offline world is the true ‘soul’.

Two other speakers who got me feeling rather inspired were South African entrepreneurs’ Andre De Wet & Stuart Forest.

Andre de Wet, a med school dropout turned GM of Price Check, is this year’s app of the year winner. Andre spoke of his journey and his presentation title, “It takes 15 years to become an overnight success” (previously quoted by Bono and Madonna!), touched on his devotion to learn and never getting too comfortable at any stage of your life, because that’s when you stop learning. He says that if you are feeling comfortable when you are in your 20s & 30s… “do yourself a favour & get uncomfortable…you have far too much to learn still”

Following a similar topic was Stuart Forest, CEO of Triggerfish Animation. Stuart, born in Port Elizabeth, with a passion for animation, started his journey building clay models just like popular owner & his dog, Wallace & Gromit. With little to no interest or growth opportunity in clay animation in South Africa he dedicated his time to 2D & 3D animation…. Today his 20 year vision is to displace Disney in their home market.

Triggerfish are behind two successful animation films namely Zambezia & Kumba. Animation is in another league of its own when it comes to patience & precision. In order for any animation to appear smooth, each frame needs to be displayed quickly. On average, 24 frames are needed per second. Translate that into 1 minute and an artist would need to draw over 1400 frames for 60 secs of smooth running.

Stuart’s presentation focused on lessons you were taught in playschool and how they still apply to your day to day life. Being patient, kind & honest was one and to get up and try again and again and again was another.

He firmly believes that as important as it is to have short term goals, the real McCoy is that vision of how you are going to achieve your major life goal which may just take 20 years to achieve.
As our favourite leadership coach, Robin Sharma, reminds us: ‘ideation without execution, is nothing more than delusion.”

Overall, Netprophet proved to be an inspiring day out, realising that everyone has the opportunity to dream and come up with something great, but it’s what you do, how you learn and how much you believe in yourself is what determines the success of your “something great”.

By Ros Siddle, Marketing & Research Manager, Truth

Turning likes into loyalty...... the ultimate prize of social engagement

“Is the short term tangible ROI more valuable than the insight we gain from long term engagement with your customers and the business potential thereof?”

I posed this question in a blog earlier this year (read here) and it seems this topic is still up for debate.

Ted Rubin, Chief Social Marketing Officer at Collective Bias suggests in his book Return on Relationship that “Social Media drives engagement, engagement drives loyalty, and loyalty correlates directly to increased sales. Return on Relationship™ = ROI”.

If this equation deems true…I’d like to unpack how marketers can begin to understand how to use this metric to determine ROI from social media.

We know that there is no real correlation between vanity metrics and revenue impact. What I mean here is that the more likes, follows & shares do not necessarily lead to an increase in income.

In a recent webinar, hosted by loyalty 360, there were 4 main questions marketers were dabbling with in attempt to answer “How to measure ROI from social media”

1. Quite obviously: What’s the ROI of SM?
Marketers are saying that is it difficult to justify increasing spend on social media arguing whether or not you can directly compare ROI attained from TV commercials & billboards etc. to the cost of your social media activities.

“Social media is so popular and effective as a marketing tool because it focuses on the customer experience instead of just throwing an advertisement at them and hoping the impression will stick.” by Ted Rubin.

The realization is, the lifespan of each of these channels are dramatically different and if you cannot justify spend per campaign (output) especially in social media, how does one begin to measure the return?

2. Do marketers care enough about data?
Data is not yet seen as an important tool to help increase effectiveness of marketing campaigns and social media campaigns……how come?

Currently, there seems to be not enough time dedicated to training. There are little to no resources, no skills, no staff & no ability (or desire by marketers) to get to the heart of data and how to attribute it across the company. The scale & complexity of data has changed dramatically – what used to be done by marketing teams on excel is no longer possible, it’s far too complex and leads to incorrect insights.

Businesses have evolved so much so that not only does your financial department or IT department   use data…but your marketers HAVE to use data too.

Advice given from the panel on the webinar suggest that marketers need to start from the beginning by defining their social media strategy to create & include insights derived from data.
Webinar host, Wes Brooks says, “No business has a data problem; they have a filter problem. Your analytics model has to look at the whole interconnected digital ecosystem for predictive data.”

It is essential for dialogues on data to start internally - data is needed from internal business partners and everyone needs to fine comb the data that is relevant to their department, but which aids to the bigger picture.

Lauren Swanson @swantonsoup  Marketers who embrace #data will get to leave the kids table and sit with the adults in the C-Suite. #SMTlive

Social Intelligence @SDLsocial  The future of marketing/sales is going to be data driven. You can use data to narrow down exact steps in the customer journey. #SMTlive

That’s why companies such as ourselves at Truth work strategically with data insights experts like P:cubed. The end client value proposition in the B2B market places is meaningless if data cannot be demystified.
 
3. Job titles & description are no longer clean cut.
The scale of a digital role is tremendous and the expectations are too high. There is major challenge to find one person to cover all aspects on this so called Social Media/Digital Strategist role. The expectation is that this job should cover roles that in their own capacity are so widespread such as digital & social media strategist, marketing manager, content & CRM management to mention a few.

Another change worth mentioning in organisations today is the CMO, CFO and CIO relationship….they’re big mates now. The CMO role has changed by becoming increasingly responsible for tech investments & actions driven by data insights. There should also be a single line that connects your social media manager and his/her team to your CMO.

Josh Milenthal @JM_allgrownup  The most common misconception is that "social" is just something someone can do on the side. It's a full time gig.

4. Focus on content…..not just selling.
As mentioned above, there is no real correlation between vanity metrics and revenue impact. The notion of accumulating as many likes/followers/fans will soon no longer be a metric to gauge popularity of a brand or show how truly engaged they are with their fans.

The true metric will be how engaged and loyal their fans are.  Good content builds trust, builds credibility. Content is read to acquire knowledge and shared to spread that knowledge. Technology has broken down the barriers between brands and customers making it much easier to speak AND listen to your customers and vice versa. It allows for ‘on demand response’ to the needs of your customers.

Become more creative with your content and move passed the pre-populated Facebook post or tweet. Use your data wisely and fuel content based on the insight you have about your customers. It gives your customers the chance to feel more for your brand once you’ve taken the time to engage with them about what’s relevant to them.

Josh Milenthal @JM_allgrownup Look at it like this. When marketing in person, do you preach a message or hold a conversation? Conversations increase trust/sales #SMTlive

Challenge yourself and think beyond the audience…..how do I change them into advocates? The advocates are what create the reality of the brand. People are watching & listening to these advocates so pay attention to who they are.
                                                                               
                                                                                Ros Siddle, Marketing & Loyalty Research Manager, Truth

Is this the end of value segmentation as we know it?

It strikes me that at times we, as marketers look to focus our budgets and efforts to retain our most valuable customers.  We also strive to increase engagement and spend from the group of customers showing the most potential to increase their future spend with our business.  But are we missing a trick by not focusing on the least likely group to increase their potential value to the business?

What about those who don’t spend much with you, but adore your brand?  In a standard RFM model (Recency, Frequency and Monetary), they are likely to be missed out, and not given the same attention as those who are spending more with you.  So should we be engaging with them?  I believe there are segments of customers with whom their value isn’t measurable on a purely financial basis.

I believe there is a space for CRM analytics and attitudinal research to be combined, to further understand your brands potential reach.  This is where the power of research comes in, and the much publicised Net Promoter Score (NPS) could help to establish the segments of customers whom adore or dislike your brand.

There is much talk of the pros and cons of using customer affinity measures such as the Net Promoter score – developed by Fred Reichheld author of the book ‘The Loyalty Effect’ and ‘The Ultimate Question’.  The idea being you ask a simple question – “on a scale of 0-10 how likely are you to recommend a {brand/product} to a friend or relative?” The responses are then measured by splitting the customer base into 3 groups: Detractors, Passives and Promoters. 
For some industries identifying those most likely to promote your brand, even if they have only purchased once, can be very fruitful in driving word of mouth influencer campaigns.  Creating a memorably brand experience for this group can drive considerable word of mouth impact, and potentially drive new customers.  That’s free acquisition, that can’t be gained anywhere else and can drive incredible value to your business in the long term.

On the flip side, those who fall into the low value/detractor category, a group least likely to spend with you, and most likely to talk negatively about your brand are equally worth considering a campaign to.  With the aim to reduce the negative impact of bad publicity by making peace with those unsatisfied with your brand/product or service.  It could save you lots in the future in rebuilding a brand or spending on PR.

                                                                           Karen De Lorenzo, Loyalty & Engagement Consultant, Truth

Does your culture eat, sleep, drink customer?

Culture shapes the norms within an organisation and drives the way things get done both behaviourally and systematically.

Many organisations forget this when trying to implement a new strategy into the business. This is particularly relevant when implementing a new loyalty strategy to drive a new loyalty programme for the business. There is no single mould for implementing a loyalty strategy and there are many factors to consider prior to developing & implementing it into your business. The phrase “culture eats strategy for breakfast” often used to describe how no matter how successful or bullet proof you think your strategy is, if it is not in line with the culture embedded in your business……then you are wasting your time. A strategy has to include culture as a core element.

We know that a loyalty strategy impacts the entire business. It should not only belong to your marketing or clients service department but it should be “owned” and adopted by the entire business from your board of directors to your frontline employees. Your aim should be to adopt a strategy that is both employee & customer centric too. Here are 3 “Cs” to consider on how to bring about a strategy to suit your company culture:

1. Communication:

Have a communication plan

• communicate change & communicate it in a timely fashion internally before externally
• communicate in stages & do so regularly
• communicate in such a manner, always taking the current culture/environment into consideration
• Provide insights/background into the strategy to all employees
• Allow for feedback

2. Collaboration:

• Once you have delivered your communication plan allow time for people to not only provide feedback but  allow for discussion groups, understand how the new strategy impacts them as individuals and as a company as a whole
• Allow your staff to spread their concern openly to get full consensus
• Provide workshops to all departments within the business enabling them to understand how their roles may change and how their role contributes to the success of the business as a whole. This is critical for landing a customer centric strategy

3. Commitment

• The customer centricity strategy needs commitment and buy-in from all parties. It will play an integral part of the company culture and daily operations. Across entire business from top management to front office
• E.g. cashier has main interaction with your customer – let her be your sales person!

• The person heading up the strategy should guide the execution of all the loyalty activities at all levels. Marketing, finance, suppliers, call centre agents to mention a few will all need to be led into the new strategy.

“People are loyal to culture, not strategies” says Joe Tye, CEO & Head Coach of Values Coach Inc. People are loyal to the culture they are accustomed to, not a strategy and this can easily cause resilience to any change within an organisation. When you fully understand your company’s culture and know how to execute any change, bearing in mind the complexities that may come along with such a change, you will be able to lead any new loyalty & customer centricity strategy and create competitive differentiation……nothing is more powerful than this.

To implement a customer centric strategy is simply a pipedream if your frontline & back office processes are not designed to be customer focused and if the culture does not eat, sleep, drink customer.

                                                                               Ros Siddle, Marketing & Loyalty Research Manager, Truth

Inoculate your most profitable customers against the inevitable seduction of a competitor!

Sounds easy doesn’t it?!  How do you start such a strategy? Do you even know who your most profitable customers are?

Typically most data led organisations understand the need to identify different segments of their customer base to drive better marketing plans.  However, there are so many organisations out there, which do not do any data led segment planning to derive stronger marketing results.  For those organisations, I hope this is a eye-opening read!

There are different types of segmentation models.  The one I am referring to today is the RFV segmentation model: simply known as the Value segmentation model – or the Recency, Frequency & Value segmentation model.  It does just that; it measures the recency of customer spend/transaction, the frequency and the value (e.g. value of financial transaction or retail basket size).  So how is this useful?

Such a model allows you to identify your most profitable customers.  It may, for example, show you that your top 4% of customers are worth 23% of your turnover. Equally, at the opposite end of the scale, you may see a huge amount of customers only yielding about 5% of revenue.  Globally, retailers seem to follow a trend of the top 3% customers, yield approximately 20% of turnover.  Amazingly, the gaming world tends to see their top 4% of customers are worth 58% of turnover….wow!!!!  You can rest assured that the gaming industry uses value segmentation in a very sophisticated manner and knows their top 4% customer behaviours, trends, likes, dislikes…intimately!

So what is this magic segmentation model used for?  Firstly, it is used for good old fashioned direct marketing.  However, surprisingly, you may not always get the results you expect.  A novice CRM marketer may feel that they must communicate offers and campaigns to their top tier customers.  However, imagine in a retailer that your top customers are in the store most frequently and most often.  They know and love your brand, so they may not be the most responsive to a seasonal trend release email campaign.  They probably have already purchased or know of your trend release dates, as they are more emotionally involved in your brand.  You are more likely to see positive results from your middle tiered customers who are slightly ambivalent about your brand.  They shop more than once but not frequently.  You have the most to gain by enticing them to your store if you offer the right offer, product and in a personalised and targeted manner.

However, you must not ignore the top and bottom tiered customers.  Remember that even your most loyal customers are spending a significant amount at competitor brands.  Not even the most entrenched customers seem to spend 100% of their wallet in one place.  You need to inoculate your most profitable customers against the inevitable seduction of your competitors!  Make sure you reward these customers appropriately and keep them engaged in your brand so they can not only continue to spend frequently and with great value, but they can become your brand ambassadors, on and off line.

So what about the bottom tiered customers in the value segmentation model?  Typically, you may not get much uplift from a direct marketing campaign, as they seem to not be interested in your brand.  Maybe a very deep discount offer would yield some results, but at what cost to margin and brand perception?  However, we need to overlay a more sophisticated approach.  These customers may be brand ‘detractors’.  You may or may not use the Net Promoter Score research tool, but basically, after 1 simple question: “Would you recommend brand X to others?” - you get a sense of how many of your customers will ‘promote’ your brand, ‘detract’ from your brand or are ‘passive’ about your brand.

Imagine if there is a strong bias of ‘detractors’ amongst your lower tiered value customers.  It may be worth creating a brand perception/win-back campaign to at least stop the negative influence of these detractors, even if you don’t expect to see an increase in sales from a campaign.  Equally if you know your promoters and where they sit within your value segmentation, you must seek to engage these customers so you can successfully achieve positive word of mouth at a lower cost, rather than a broadcast brand campaign.  Let your most loyal customers do the talking for you.

Finally, in my experience, if organisations know how to use value segmentation properly, they begin to use it as a long-term strategic tool.  You can see year on year trends across different customer tiers.  You may see a decline in your most profitable customers as a clear indication of poor sales performance on the horizon.  It is a more powerful strategic indicator than simply being used for marketing campaign customer selections.

Such customer tools are available to assist all brands to run their customer strategies.  Are you doing so?  Do you know and love your most profitable customers!?
                                                                                                        
                                                                                                         Amanda Cromhout, founder & CEO, Truth

"Listen respond, resolve…”

This was highlighted by Craig Smee, Nedbank’s Head of Social Medisa Communication at the International Customer Experience World Conference (ICEW) in Johannesburg last month.

“Nedbank’s social media strategy’s first two months comprised of only listening to what their customers (and/or fans, non-fans) had to say about them”  Craig Smee

"Provocative presentation by @tweetstruth (Amanda Cromhout) about how to use data as part of your business strategy #ICEW " tweet from The Focus Group

Businesses are forced to become "social" businesses allowing for better connectedness, interactions, collaboration between employees allowing them form a relationship with your brand beyond their day job. Mike Stopforth , CEO of Cerebra says that businesses should be more interested in trends & behavioural shifts on society that impacts your own employees remembering that they are your true advocates.

A businesses communication needs to change too. Think about your community and the way you currently communicate to them..move away from campaign thinking to community thinking by talking to your community about things they want to hear, not about what you think they want to hear about.

                                                                          Ros Siddle, Marketing & Loyalty Research Manager, Truth

The beauty and the beast of social media: Turning a bad experience into a good one in a split second

That defining moment when you have seconds to turn a situation around…...I’m talking customer experience

As a consumer, I feel somewhat obliged to make the first move to rectify a horrible customer experience which usually entails a call to the manager or a long descriptive email about every inch of my negative experience with the hope that I'll get some form of sympathy & reimbursement back.

However, I was pleasantly surprised last week with an incident I had at a yoga class hosted by the V&A Waterfront & Virgin Active (South Africa). For a few weeks the V&A Waterfront has opened its facilities to both exercise novices & enthusiasts to attend wide range of free classes. This particular class was set to take place at 6 a.m. on a chilly autumn Friday morning, only to realise upon arrival that the yoga instructor had not pitched.  There were a few of us who hung around in hope that she would pitch but no luck.

It was at this moment where we could have simply be sent home empty handed, irritated and put off committing to doing any form of exercise with either of these institutions.....But this was not the case, the Virgin Active representative immediately took down our details and promised to make it up to us in some way, apologising profusely as we left the venue. Within 1 hour, I received an email from Virgin Active, apologising again for the inconvenience caused.

“Hello Ros,
Just wanted to apologize once again for the cancelled class this morning. Please can you let me know which club you normally train at and I will send a gift pack there for you.
Hope you have a fantastic day!” Regards Kate Linder, Events Manager Virgin Active South Africa

After responding, my gift pack was ready for collection on Monday at my preferred gym.
When people are faced with a bad customer experience, naturally their expectations of you are lowered. Admittingly, my expectations were lowered but heightened immediately with this swift response and follow through from Virgin Active.

I happily tweeted my gift pack, thanking them for their great service, quickly forgetting the early Friday a.m. wake up call for a yoga class that was cancelled.

I believe that Virgin Active understands the power of word of mouth, especially when it comes to testing the success of a new initiative such as the outdoor active classes, which in their case could have turned horribly sour.

We often highlight the power of word of mouth and in this instance it is no different.

Key lessons:
* The most powerful tool you can have is the ability to spot & adapt to your customer’s attitudes to an experience they have had with your business (both positive & negative).
* No company is perfect; negative customer experiences are inevitable. You cannot pretend they won’t happen, and you cannot wait for them to happen before having a plan in place to combat them. So plan ahead for them. Align your employees to combat these situations the same way you would.
* When things turn south, you only have a few seconds to react. The quicker and more efficiently you respond the less damage there is to your brand.
* Don’t be afraid to communicate openly where you went wrong and let your customers know that you have done what you can to fix the problem.
The beauty and the beast social media comes into play here where you are able to react to a customer’s bad experience in real time to an audience who will see your solution focused strategy solving the problem.

Happy customers will happily spread the bad-turned-good experience with their social networks just like I did.


                                                                               Ros Siddle, Marketing & Loyalty Research Manager, Truth

Tesco Clubcard TV - the next level in data mining

Tesco Clubcard TV has arrived! After a successful month of beta testing to Tesco’s employees, it is now available to all 16 million Tesco Clubcard members.

Clubcard TV, powered by Blink box, is an online service streaming a variety of movies & TV shows, free to all Clubcard members. However, it is unlike any online streaming service out there. Clubcard TV will use data mined from the Tesco Clubcard loyalty programme to enable participating brands to target advertisements to individual members based on their shopping habits.

Like the current loyalty programme, data is mined to better understand the spending habits of its members to offer them relevant, tailored vouchers & coupons. In this case, relevant, tailored advertisements will be aired to members based on their shopping behaviour, demographic & location data.

The ad-funded model will air advertisements before, during and after playbacks requiring only a member’s loyalty membership number for registration.

The video –on –demand industry has grown quickly over the years with many companies such as Netflix & Lovefilm reaping the benefits of this online demand, however none have managed to offer, not only a free service with no subscription or contract required, but one that has tailored, “purposeful” advertisements that are more relevant to the end user (member) than mass advertisements.

Taking it one step further, Tesco’s Scott Deutrom, MD Clubcard TV says “Better still, we can target adverts based on what our customers bought yesterday, we can show that we are listening to our customers in ‘real’ time.”

Post campaign analytics will be made available to advertisers who would like to track their brands actual sales as a result of targeted advertisements.

Just when we thought Tesco’s innovation cap may have run dry, it has certainly proved it still has what it takes to compete and be ahead of the loyalty game. Good on you Tesco!

Ros Siddle, Marketing & Loyalty Research Manager, Truth

O2 giving us reasons to sit up and listen, watch and learn

I have never really taken any notice of the O2 brand in the UK, even though I am English. I do of course notice it when I support the English rugby side! Graham Webster, Director of Customer Experience at Telefonica Europe presented at the International Customer Experience World conference (Johannesburg, March 2013) and gave us some riveting insights to their O2 customer experience strategy.

O2 use web chat to engage with clients at a rate of 250,000 web chat calls per month. From this, they see the highest customer satisfaction from the web chat channel and the lowest cost per channel. Why are so many more organisations not using this phenomenal tool?

O2 branded the potential white elephant: the London dome in the East end. Was this done purely for sponsorship purposes? An element maybe? It gives great brand exposure. I hear my friends referring to concert X at the "O2" and a tennis spectacular at the "O2". Awesome!  But actually, it was done so that their O2 customers always get a better customer experience. Early release tickets, better offer tickets, zoned off areas, especially for the cellphone clients of O2.

Much to my horror did I realise that O2 also sponsor the Irish rugby team (it's the English thing in me!). O2 have done the most amazing customer engagement competitions for their Irish rugby fans. Fans were able to pre-record their pre match rah-rah speech to the players, ad it was played on the stadium screens on match day.  Fans were able to submit their name to be incorporated into players numbers on the back of their shirts, and find these online – I.e. Which player is carrying my name? Such incredible customer engagement strategies to build longer term client retention.

So what? The bottom line is that O2 enjoyed a 28% reduction in client churn which was directly attributable to the combination of these client engagement/sponsorship activities. Simply a remarkable measurable by which clients engaged in either web chat, O2 dome experiences, rugby competitions, etc.

Having said all of this, Graham did refer to the fact that none of this makes any sense at all if the network falls over or there are basic service offering mishaps. As we have mentioned before, client engagement strategies, marketing and loyalty initiatives must not be 'lipstick on a pig'!

O2, we salute you. Any company would enjoy a 28% reduction in churn. Thank you for sharing your insights.

                                                       Amanda Cromhout, Founder & CEO, Truth

Your loyalty member: CRM strategist or promiscuous consumer?

Do we, as marketers, business owners, loyalty experts, forget to view our customers of our loyalty programmes just as they are…customers? 

Definition of a customer: “A party that receives or consumes products (goods or services) and has the ability to choose between different products and suppliers”*

Looking at the first part of this definition, “A party that receives or consumes products (goods or services)", you are reminded about how little you understand about your customer other than that they chose you to “receive or consume products” from.  Only after a thorough data analysis do you begin to define this type of customer a lot better (shopping habits, frequency, basket size, preferences etc.). However, without delving into too much detail about data and how to use it (read the Iceberg effect), I’d like to touch on one of the fundamental reasons why we find your customers are not redeeming the full benefits of your programme and in turn, losing interest in your programme.

Being in the loyalty industry, I am the owner of over 35 loyalty cards. I know this collection is more than what the average person would possess but the rate at which loyalty is growing in South Africa, the man on the street will soon start (or has started) to compete with my collection.

I also know I redeem way more than my peers by studying, interacting & fully “exploiting” the full benefits of these programmes as part of my day to day job. There may only be a very small percentage of us like minded loyalty folk out there…but what about our customers that do not have the same level of interest, time or patience to investigate how to reap the full benefits of a programme? How do you get them to find your programme worth while?

As mentioned above, the loyalty industry in South Africa is quickly catching up with the global loyalty landscape and with so many companies entering the loyalty playing field it is critical for one to realise this fact about your members and help them get the best out of your programme so that you become their first choice when it comes to choosing which card, of many, to use. Your customers, as defined above, have the “ability to choose between different products and suppliers” so give them reason to choose you, first.

·         Keep your loyalty programme simple, understandable and easy to use.

·         There is a serious lack of consistent communication about HOW to earn redeem.  All we seem to be communicated about is WHAT you can earn. Encourage ways for them to earn & redeem rewards faster.

·         Have a communication strategy that consistently informs your members on how to earn the broader benefits of your programme and this communication must be delivered in such a manner that is easily understood by your customers.

·         Make rewards obtainable – do not make your member feel that the rewards are out of reach.

·         This is just a smattering of considerations….there are so many more in a comprehensive list. 

It is time to stop assuming they (your customers) are members around your boardroom table but are normal people who promiscuously choose difference brands at different times. 

Ros Siddle, Marketing & Loyalty Research Manager, Truth

*definition of customer, source: www.businessdictionary.com

Everything Communicates

There are several reasons why quality content matters both online and offline. However, there is one factor which I think is vital and worth highlighting - Understanding just “who” is following your brand in the online space.

Are you aware of the type of person who is observing your brand on social media? Yes…you may make the assumption that they have similar interests to you or work in similar industries to you because, why else would they have chosen to like or follow your brand, right?  Well, one may never understand the true reason why people follow your brand, it may simply be that they are interested in what you have to say & offer to them. However, we often under-estimate the power and impact these “fans” may have on your brand once these fans get talking.

I believe that there are typically two types of social personas navigating your social media platforms:   

Persona 1: “Social engagers”. These are your socially active bunch. By active I mean that they ask, tell, listen therefore engage with your brand and spread the word of your brand to their social network. 

These are also known as your story tellers. You (the brand) share content to your community, which will reach about 10-20% of your online base and they (the fans) do the rest. Your fans spread the word to +- 80% of your remaining base via their social media platforms or through word-of-mouth (offline). I could go as far to say that these are usually your ambassadors or brand breakers (both opinionated with lots to say about your brand whether positive or negative).

Persona 2: “Social observers” – they follow several brands and they (themselves) have fairly high following and follower rates, friends etc. but do not socially engage with the brands they follow. They do not share opinions but read everything there is to read about a brand. They read what others say about your brand too. They create an impression about your brand without having engaged with you...you could call them quite judgmental actually. The most engaging thing they have done online is clicking “like” and scrolling through your fan page. 

However, your content is what matters to them, there is a reason they read your posts and continue to follow you and their opinion of you is determined solely on that. Do not under-estimate the power of these social observers. Their offline actions are vastly different to their online behaviour. When anything is to be said about your brand offline, they have no hesitation to share their thoughts & opinions about your brand, based on what they read about you or observed what others had to say about you…reiterating the power of word of mouth. 

You never truly know which people are just passively watching your brand (without engagement) and just how influential these people may be of your brand simply by what you have been saying online. Therefore, a constant need for consistent, quality, value adding content must be achieved. 

Ros Siddle, Marketing & Loyalty Research Manager, Truth

When CRM really matters

So now we are in January, is it a light relief to be receiving less marketing emails form retailers & suppliers or are you missing them!? Which retailers really hit the mark for you in their Christmas/holidays promotions and targeted marketing?  

In my opinion, some simply spammed their customer databases during December, advertising anything and everything, just using their database as another channel to broadcast their campaigns…..a big No-No in our opinion. All hats off to those retailers who thought about who I am, what I like, what I buy and what I am likely to buy...and hey-presto, send me something appropriate and personalised.

The international retailers are doing this superbly but that's just irritating to quote the big boys like John Lewis or gonedigging.co.uk.  However, in our local market, I was very pleasantly seduced in marketing terms by Yuppiechef, who sent me campaigns which always intrigued me and offered me products which would appeal to my Santa Claus wish lists from family and friends. Needless to say, I spent a small fortune with the Yuppiechef team and I thank them for making my Christmas shopping chore easier!

Our hats go off to Yuppiechef who emailed me frequently with relevant communications which converted to sales and happy kids, friends and hubby on 25th December. To other brands using direct marketing as a channel for advertising, we plead that you apply the 1 on 1 of CRM marketing and personalise, segment, target your messaging to be relevant to your customers. Even if Yuppiechef didn't follow all these rules, their personalised approach was much appreciated by us, and therefore Yuppiechef enjoyed converted sales.

Is measuring ROI from social media that valuable?

Over 1 billion expressions are created on social media every day.  Knowing this, brands are aggressively placing social media at the fore front of business strategies as it holds great potential for marketers to tap into a new found form of marketing data. But how does one measure the success of social media? Is there a direct link between social media activity and ROI?

According to a study from Econsultancy & Adobe, “60% of marketers say engagement is still the only reliable way to measure social media ROI.”

Where does one begin to understand the ROI potential?

1. Establish what your engagement strategies do for your business at present e.g. is it driving new traffic to your website, an increase in online or offline sales and/or keeping existing customers coming back - are these strategies working? An increase in the number of likes, shares, retweets, fans & repins do not qualify as the usual KPI measures and do not equal true engagement.  Top quality engagement is turning those activities into sales.
2. Work intuitively to engage your community (your audience) & understand their goals, as they are likely to not be in line with your business goals.
3. Invest in tools that can track engagement impact that use brand mentions; follower & fan growth (impressions); click through rates to mention a few.
4. Once the tracking tools are in place, an in-depth understanding of the metrics is required to fully understand all interactions available. One cannot view any single social media channel of a company in isolation to determine ROI. All components need to be taken into consideration.  Richard Mullins, Director at Acceleration, says “marketers who are serious about social media need to start thinking about data architectures and analytics tools.  It is a complex and specialist field…the value can be immense".

The truth is, as there are in fact plenty of ways we can gain insights into ROI from social media, through  various platforms– we will NEVER be able to account for every single tweet, share & like.  The social media world out there is far too large & intertwined that ROI cannot be measured for every activity as they happen.

We can however encourage marketers to not get caught up in defining exact ROI figures but to shift their focus to the  more “soft “ approach, which is listening & talking to your customers to learn more about them  i.e. engaging with your customers. 

Ask yourself: “Is the short term tangible ROI more valuable than the insight I gain from long term engagement with my customers and the business potential there of?”

Ros Siddle, Marketing & Loyalty Research Manager, Truth