Bryan Pearson's Blog, page 32

Loyalty Limelight: Kohl’s Yes2You Rewards

The initiative: Yes2You Rewards, by Kohl’s

In a nutshell: Kohl’s on Oct. 6 changed its loyalty program from Kohl’s Rewards to Yes2You Rewards, a currency neutral, customer-loyalty program that rewards at a rate of 5% on spending in-store and online. The Wisconsin-based department store chain operates 1,163 stores in 49 states.

Kohl’s has been testing variations of the program for two years and enrolled more than 10 million members in the pilot phase, Michelle Gass, Kohl’s chief customer officer, said in a press release. “We are inspired by our customers and want to create personal connections to thank them for all the ways they interact with our brand,” she said in the release.

New features: Yes2You members earn one point for every dollar they spend, regardless of how they pay, with 100 points (or $100 spent) equaling $5 in rewards. Other features include:

• An annual birthday gift, plus eight special savings offers throughout the year and opportunities to earn bonus points.

• Members can transfer Yes2You Rewards points to family and friends also enrolled in the program or donate them to the Kohl’s Care initiative in support of children’s health and education programs.

• Kohl’s expanded its mobile wallet, so Yes2You Rewards members can track, redeem and share points.

• The company teases at surprise rewards, but leaves little additional information (“We would tell you more, but that would ruin the surprise!”).

Participation requires a valid email address, through which offers are sent. Members can also view accounts by logging into a mobile app or kohls.com account with a valid email address. Rewards expire after one year, and if the account has not been used in a year, it is drawn back to zero.

The Takeaways: Kohl’s operates its own charge platform, so I imagine the two years invested in testing variations of the program were aided by a rich database of consumer insights. The fact that it gained 10 million enrollments in the pilot phase is evidence that Kohl’s messaging and targeting are effective (existing members of Kohl’s Rewards automatically roll over).

I also like the high earn rate of 5%, which outpaces many national credit card programs and is how brands have been trending. The Orbitz Rewards Visa, for example, gives members 7% and 10% back on flight and hotel bookings, respectively, if the purchases are made on the Orbitz Rewards app. I’d like to see Kohl’s consider similar options, where rewards escalate with the level of engagement.

There are a couple of minor uncertainties:

• Kohl’s pledges to use customer insights to deliver “additional incentives and surprises that are personally relevant,” but it provides little information about what these surprises will be. The company will need to clearly connect the “surprises” to the customer’s actual activity to demonstrate its delivery on this commitment.

• Points post to a program account about 48 hours following the purchase date, delivery date or shipment date. At a time when consumers are increasingly demanding real-time rewards, two days may seem like a long lag time for a proprietary program.

• The program gets an “A” for simplicity, but I’d be interested in seeing more of how it actually engages. Little is said about how the app operates, for example, or if the rewards portfolio includes experiential perks, such s early access to sales. Perhaps this is part of the “surprise” element.

Kohl’s Yes2You has a catchy name and an evidently sizable database behind it; I am encouraged by its potential to guide advancement in loyalty marketing. But retail is a brutal field with competitors such as Macy’s consistently investing in omni-channel strategies and testing same-day delivery. In the end, the consumer will decide.

 

October 8: Loyalty Links & Likes

6 Customer Experience Lessons From a Digital Business Pioneer – Huffington Post

Fred Kirsch, publisher and vice president of content at Kraft Sports Productions, talks about how he transformed the New England Patriots into a digital marketing powerhouse, along with six lessons he’s learned about digital customer experience.

The Three Keys to True Customer Loyalty – Business 2 Community

When building customer loyalty, it’s important to clearly understand what a  loyal customer looks like. Failure to recognize this can be disastrous for business, so this article explores three key points for developing genuine loyalty.

Pop-Up Loyalty: Capturing Long-Term Commitment in Short Time Frames – COLLOQUY

Seasonal stores that come and go at various times of the year may not seem a good fit for a traditional loyalty program, but thanks to the emergence of technologies like RFID bands, loyalty marketers are unearthing real-time consumer insight that prove valuable even in the short-term.

Feeling Lucky? Many Loyal Consumers Do, Despite the Facts – Newswise

An interesting cognitive phenomenon points to evidence that customers who are loyal to a particular company think they have better-than-average odds of receiving valuable promotions or winning sweepstakes. The kicker, it seems, is that they arrive at this conclusion completely on their own.

Why Brands Are Using Mobile App Loyalty Programs – Mobile Marketing Watch

Jason Wolfson, marketing manager at RadiumOne, explains why brands such as Starbucks, Sephora, Gap and others use mobile app loyalty programs and the benefits they reap.

LinkedIn Changes a Primer in Responsible Data Use – at a Relevant Time

LinkedIn may be increasing in its membership base, but the social network is pruning the ways it uses its member data. Based on my own five principles for data use, this is a good thing.

The 313 million-member website on Oct. 23 will change its terms of service, including its privacy policy. According to a notification LinkedIn sent me on Oct. 3, these changes will include a narrowing of terms, giving members more control of their information.

“The language in our previous Terms of Service asked for broad rights to use your content, but in practice, we didn’t exercise all of these rights because it didn’t always seem like a ‘members first’ thing to do,” LinkedIn stated on the company blog. “Therefore, some of the rights in the new Terms of Service have been narrowed to better reflect our long-standing practices.”

Among the clearly written updates: Members continue to own all the content they post; once a member deletes an item, LinkedIn’s right to that information ends; and LinkedIn does not license or sell member content.

LinkedIn’s changes may be feeding a broader trend. They follow the launch of the advertisement-free social network Ello, which does not capture or share any user data. Ello has been dubbed the “anti-Facebook,” which is actually a marketable platform these days. LinkedIn, meanwhile, is promising transparency and simplicity, spelling out the terms in language that is easy to understand; not legalese.

As I read through LinkedIn’s key updates, I compared them with my own five principles for responsible data use, outlined in my book “The Loyalty Leap.” Pretty much across the board, they adhere:

Be transparent and reasonable: The rationale for this is clear. When organizations explain their intentions for data use in straightforward language, while also spelling out the benefits to the customer, that customer is more likely to engage with the brand.

Give consumers a choice: As LinkedIn demonstrates, member-first organizations let consumers choose how to share their information. This democratization of control is significant today as consumers grow increasingly savvy, and critical, about data use. Further, control leads to buy-in: LoyaltyOne’s AIR MILES Reward Program is permission based, and 99.99 percent of our customers opt to share their information with us for the purposes of targeted marketing.

Respect and protect data: Companies that want to resonate should collect only the data they need, use it only as promised and retain it only as long as needed. Along the way, they should avoid personal “creepy” areas such as financial information or questions about children. Lastly, they should always destroy data with care. LinkedIn’s approach to dealing with customer data extends the metaphor by allowing members to eliminate certain data elements themselves.

Monitor frequency: Consumers are overwhelmed by too much information, so why add to it? By making sure emails are not too frequent, while being responsive to the customers’ needs, a company can stand apart and above its competitors.

Deliver mutual value: Smart companies ensure the data they use delivers recognized value for the consumer as well as themselves. And by value, I do not simply mean the product, cash, points or coupons. I refer to creating something more powerful – relevancy.

Which is what LinkedIn’s changes are right now – relevant. By adjusting its policies and alerting the consumer now, LinkedIn is insulating its business as worthy competitors begin to arrive at the scene. It’s hard to deny that LinkedIn is taking the first good steps for ensuring longer-term loyalty.

Macy’s Omnichannel Strategy: Moving Engagement as Well as Sweaters

Macy’s Omnichannel Strategy: Moving Engagement as Well as Sweaters

Do bricks and mortar cost more than bytes and channels? For Macy’s Inc., the question may not matter as much as whether the two investments, combined, sell more sweaters, suits and shoes.

Macy’s is willing to pay to find out. The nation’s largest department store chain has distinguished itself over the past few years by testing new technologies, including omnichannel distribution strategies that enable customers to order items straight from the warehouse, as well as in-store iBeacon communications.

It is part of a steadfast effort by Macy’s to be where its customers are. In mid-September, the Cincinnati-based merchant announced a series of additional technological advancements and partnerships, including the testing of same-day product delivery, participation in Apple Pay, and a snappy image search app that will respond to any digitally submitted photo with a similar item available at Macy’s. It’s pretty sharp stuff.

And it is expensive. Macy’s second-quarter report, filed Sept. 8, details that the cost of sales rose $139 million in the quarter, due in part to higher markdowns “as well as the growth in the omnichannel business and the resultant impact of free shipping.” Likewise, the investments in Macy’s omnichannel strategy partially offset higher income from the company’s credit card operations.

The fact that Macy’s is upping its investment, post report, makes it clear the retailer and its CEO, Terry Lundgren, expect a payoff.

And why shouldn’t it? Macy’s at this point is not only besting its peers in terms of its investment in innovations, but also in terms of risk. By incorporating the ability to order a specific product in a select size and color, at the store, online or by phone, Macy’s has removed many barriers to sale. Added services such as same-day delivery eliminate a lot of the remaining barriers, and it has upped the ante for others.

Further, Macy’s early embrace of new technologies, from iBeacon to Apple Pay, indicates the company executives are inside players with many innovators, giving Macy’s a leg up on tomorrow’s trends.

So to me the question is not about the cost of bytes and channels, but the extent to which Macy’s loyalty data is informing these decisions. The company’s Star Rewards program includes a “My Wallet” feature that stores offers and payment options online, as well as an app through which members can manage their accounts and receive Macy’s texts. This translates to lots of brand interactions, yet the program is not mentioned anywhere in Macy’s quarterly report and gets only a brief description in its annual report.

It’s a notable omission, but despite it, Macy’s clearly must be using its program data to support these initiatives. I can only imagine how customer data could help shape the offers it provides to customers and the way it prioritizes its investments in new technologies. Evidence of its potential already exists in its performance: Macy’s posted second-quarter sales of $6.2 billion, up $200 million from the year before.

That’s a lot of sweaters, no matter how they are purchased.

COLLOQUY Loyalty Summit: Ikea, Kellogg, Caesars and Sephora Glean Sentiment From Data

Many marketers think of effective loyalty as a deft combination of analysis and science; the exploration of data to unearth important consumer triggers. But what of the art? Beguiling the customer in a way that wins her heart as well as her wallet requires something along the lines of a crusade, exploring experiential passageways and adding an element of fun.

In short, achieving loyalty can be akin to concocting relevance in a test tube.

At the 2014 COLLOQUY Loyalty Summit, Sept. 29 to Oct. 1, that combination of art and science is evident through all of our speakers, representing brands from Ikea to Kellogg’s to Sephora. I am honored to be a presenter again at the Summit, and since I am, I’d like to provide a peek into our upcoming lineup:

Kevin Graff, retail specialist: Graff, president of Graff Retail, has for more than 20 years advised executives from Best Buy/Future Shop to Staples on how to improve sales at the store level. In his keynote presentation, Get Ready to Sell More – Choosing and Using the Right Retail Trends to Generate Loyalty, Graff will share significant retail trends and instruct attendees on how to leverage them for better loyalty and marketing results. His third book, “The 5 Foundations: The Key to Driving Better Results in Your Stores,” is due later in 2014. 

Mike Walsh, futurist and author: Walsh is author of “Futuretainment” and CEO of the innovation research firm Tomorrow. His keynote presentation,The Customer Crusade – Using Big Data Across the Enterprise, will explore the human side of data and what Walsh calls “disruptive innovation.” His topics will include the convergent trends of mobilization, consumerization and big data, the integration of data into both product and service design, and what it all will mean for personalizing the customer experience.

Joe Pine, customer experience expert and author: As co-author of the books “The Experience Economy” and “Infinite Possibility,” Pine is a firm supporter of investing in marketing experiences. In his presentation, Marketing Experiences – The Pathway to Loyalty, Pine will illustrate why goods and services are no longer enough to engage the consumer, and how memorable events can engage individuals in inherently personal ways. To Pine, markets do not exist; only individual customers do.

Caesars Entertainment Corp.: In his presentation Caesars Goes All-In with Total Rewards, Michael Marino, vice president of customer loyalty, will explain how Caesars implemented several key strategies to its Total Rewards program to provide its 45 million members more ways to earn and redeem credits inside and outside the casino. These strategies include recalibrating the program’s tier structure and entering into strategic partnerships with major brands such as Starwood Hotel & Resorts and FanXchange, a leading provider of events tickets.

Orbitz Worldwide: Online travel service Orbitz.com invested three years in developing its Orbitz Rewards program, launched in October 2013. In her presentation, Passport to Loyalty with Orbitz Rewards, Sarah Butterfass, senior director of loyalty, Orbitz Worldwide, will tell the story behind the program launch, including the wins and challenges, and the opportunities the program has presented.

Gabe Zichermann, gamification expert: As founder of gamification.co, Zichermann is a key player in experiential loyalty today. His Summit session, Making Loyalty Fun Again: Gamification and Engagement,will explore the power of game mechanics at a time when many companies are seeking to offset reward expenses. Using firsthand examples, he will reveal some of the secrets of next-generation loyalty and how gamification can engage customers in novel ways.

Gabe also will lead one of our two Summit Loyalty workshops, titled The Gamification of Loyalty (more below).

Kellogg Co.: With more than 7.4 million members, Kellogg’s Family Rewards is one of the largest reward programs in consumer packaged goods, and it isn’t by accident. In his presentation, Serving up Loyalty with Kellogg’s Family Rewards, Mark Staples, associate director of digital loyalty marketing at Kellogg Co., will tell how the maker of cereals and snacks culls its data to better understand what inspires its customers, and uses that information to craft messages and offers that bring high redemption rates.

Sephora: In the seven years since Sephora launched its Beauty Insider loyalty program, the retail beauty industry – as well as reward programs – has blossomed. Sarah Choi, vice president of Beauty Insider, will detail how Sephora’s data insights keep it a step ahead. In Feeding Her Obsession with the Beauty Insider program, Choi will walk through Sephora’s many innovations and the task of balancing digitally savvy campaigns with brick and mortar stores.

Several other speakers, representing Ikea, Sears, Metro (Canada) and JCPenney also will be presenting, and we will offer several Think Tank Workshops where attendees can work on a real-world challenge, under the guidance of expert instructors at LoyaltyOne.

Additionally, the Summit will host as a special, post-conference workshop titled The Gamification of Loyalty, led by gamification expert Gabe Zichermann.

Finally, we will honor the most innovative and industry-shaping brands in loyalty through our COLLOQUY Recognizes Awards ceremony, which will honor the 17 winners from 2014. These global organizations represent a broad cross-section of industries from mobile technology and luxury retail to quick-serve food and finance. Winners are featured in bi-monthly issues of COLLOUY magazine and will receive awards at a breakfast ceremony during the Summit. We are taking submissions for 2015 winners, so feel free to send them through!

 

September 17: Loyalty Links & Likes

The Loyalty Storm Brewing for Banks, Wireless and Cable Companies – Business 2 Community

Customer experience superstars are leaps and bounds ahead of their less competent counterparts. For industries that are at the bottom of the rung, it’s a tough road ahead to regain customer loyalty.

Why Do Companies Undervalue Customer Loyalty? – Forbes

Research has revealed time and again that it is more expensive to acquire new customers than to keep existing ones, so why are companies still so slow to change their tactics?

Pining for Memorable Experiences: A Q&A With B. Joseph Pine II – COLLOQUY

Author and customer experience expert B. Joseph Pine II chats with COLLOQUY about his upcoming presentation at the COLLOQUY Loyalty Summit, and explains why marketers should shift their investments from advertising to engagement.

Loyalty Is For Life, Not Just for Christmas – Marketing Week UK

With Christmas less than four months away, retailers are already starting to make holiday plans to capitalize on this busy time of year. But how can they develop long-term relationships with customers rather than seasonal flings?

Unlocking the True Potential of Big Data – Tech Radar

Loyalty in the modern age is often dependent on understanding evolved consumers through data collection, but how can businesses keep up when this need presents increased infrastructure and software upgrade costs?

Guiding Consumers in the Data Driver Seat

If companies want to survive into the 2020s, they may need to answer this question today: What would your customers say if they could actually shape the conversation while also deciding what data they shared, and with whom?

This is the implication from an excerpt in the upcoming (January 2015) book “Tomorrow’s Enterprises,” by Brian Mulconrey. In a chapter titled “Terms of Privacy: 2021,” Mulconrey envisions a consumer-brand relationship that hinges on customer-controlled privacy apps. These apps would enable consumers to counter the terms of service agreements with their own terms, to include a share of online advertising fees as well as the ability manage their personal information.

All this could be possible with the rise of anonymous identifiers and the future potential of consumers to aggregate these identifiers across all digital relationships, from where they buy shoes to where they book restaurant reservations.

However, the essential question to me sits beyond the economic implications for the consumer and probes into the experiential elements of this new relationship. These elements may well represent the critical point of differentiation among brands in the future.

Time will tell if marketers ever agree to share their ad fees with consumers in exchange for access to their personal information. However, the idea that consumers may be able to click and send a counter-proposal to a company rather than simply agree to its terms and conditions is compelling.

Imagine that instead of simply agreeing to give up all their data for the company to use however it wants, consumers could define clearly what they will share, how they want it handled and what benefits they expect in exchange. What do you think your customers would expect and what would they want in exchange?

Perhaps we should future-proof our actions by thinking about these kinds of questions today. In my view, not only is a relevant experience representative of the highest form of connection with the customer, but it also provides a compelling way to distinguish a business from its competition.

Our customers may not know how to express this today, but we have the opportunity to help them think about the alternatives that can work.

September 10: Loyalty Links & Likes

Customer Loyalty is Changing, and Your Marketing Plan Should Be Too – Tech Radar UK

Ecommerce has changed the way consumers shop, and a retailers’ online presence can make or break a customer relationship. This article details the necessary changes marketers should be making to compensate for this.

Six Ways to Build Customer Loyalty – Business 2 Community

Maintaining and improving customer relationships can assure more stable, consistent business results as opposed to focusing on new leads. Here’s six tips to help win customers’ loyalty.

Live it Up: Using Experiential Rewards to Re-ignite Member Engagement – COLLOQUY

New research shows that 54% of Americans are unhappy with loyalty program reward offerings. The report details what this mean for marketers, and how they can use this sobering knowledge to re-engaged lapsed customers.

Beacons and Big Data: A Powerful Pair for Retail – Umbel

The future of the customer experience lies in new technology. Advances in data collection and smartphone technology allow targeted communications by tracking customer movement in a retail environment.

Leveraging Loyalty Programs Without Breaking the Bank – The American Genius

This story provides clear evidence that loyalty programs are effective when executed correctly, even when budgets are tight.

Square’s Data Sharing a Loyalty Lever for Mom and Pops

Square, the maker of portable transaction devices, is planning to provide its small business customers a service that can translate to a triangle of loyalty.

The tech company, which produces small credit card readers that attach to iPhones or tablets, will offer its business-to-business clients access to their own detailed customer sales trends. Pieces of information can include which items sell out the fastest, the number of customers who are new or returning, average spending per customer and customer visits, according to a story in the Washington Post.

“If hot drinks are more popular during a certain hour, owners might know when to prepare them,” the story states.

To the practiced marketer, the sales insights Square can offer are typical customer value metrics that all customer relationship managers appreciate – those of recency, frequency and monetary value. But boy could these metrics help a small- or micro-business operator. Imagine how the  information on these sales trends can help a sandwich shop operator order the right amount of perishable inventory, not to mention manage staffing.

Square owner Jack Dorsey apparently recognizes this. In a 2013 interview, he told the Post: “The original focus was around running your business, specifically participating in commerce, (but) more and more it’s about growing your business, and growing your business through analytics.”

And analytics are of the greatest value when the owner of those insights links them back to the customer, which is a practice Square should easily master. By sharing its data with its small business clients, Square is using its own resources to empower them in multiple ways: to better serve their customers, to plan special events that will generate greater affinity and to tweak inventory to ensure no one leaves empty handed.

All of this aligns with the value-add model required to engage business customers in meaningful ways, as detailed in my book The Loyalty Leap for B2B. In a chapter that explains how to build relationships in the small-business channel, the book provides six steps on how to use loyalty to extend the value opportunity beyond just the service offering.

It is a model based on delivering a service or benefit that is relevant to all parties involved. In the case of Square, those parties also include business customers and end-use consumers. It brings to mind my earlier writing about the virtuous cycle of loyalty, when consumer trust leads to stronger relationships, which in turn lead to greater profitability.

What Square is offering to do, similarly, is create a virtuous triangle.

September 4: Loyalty Links & Likes

Tables, Tablets, Data and Eating – Tech Crunch

A wave of new technology is changing the landscape of the restaurant industry. This article details challenges restaurateurs face when dealing with these new customer experience expectations.

A Family of Workers Rises Up to Save Their CEO – Bloomberg

The reinstatement of Market Basket CEO Arthur T. Demolas is an example of the power of employee and customer loyalty. This article details how one person earned such unwavering loyalty.

When Points Go Cha-Ching! How Chase, American Express and Others Partner with Rewards Currency – COLLOQUY

A look at how financial institutions benefit from rewards currency partnerships, increasing the value of points and reward selection for customers.

Men Define Loyalty Programs Through Honor, Women See Trust – MediaPost

A recent study from customer engagement agency The Marketing Store shows that men and women approach loyalty with different mindsets and suggests marketers should adjust their messaging to align with these findings.

Why Are Millennials So Fickle With Their Brand Loyalty? – Business 2 Community

The apparent lack of brand loyalty among Millennials is challenging marketers to predict their consumer behavior patterns. This article explores the various reasons behind this phenomenon and suggests some ways to appeal to this digital-dependent generation.