Bryan Pearson's Blog, page 44

Taking Loyalty Lessons to the Summit

If there were ever a reason to reconsider the effectiveness of your loyalty program, this is it: As an industry, our retention rate among customers is less than 50 percent.

That’s how it shakes out in the United States, anyway. Of the 21.9 loyalty programs in which each American household is enrolled, only 9.5 are active, according to COLLOQUY’s 2013 Loyalty Census. People sign up, often because of a one-time incentive, and then the card ends up in a drawer, glove box or trashcan.

All of which emphasizes how critical relevance is to fostering emotional loyalty among time-starved consumers. It is relatively easy to get people to sign up and join a program, but proving your value to them afterward takes more than a coupon or promotion. Securing your brand’s place in the consumer’s mind (and heart) is a hard-won and never-ending pursuit.

This is the key reason why I attend the COLLOQUY Loyalty Summit every September. Now in its 11th year, the Summit has evolved into one of the world’s most informative loyalty marketing events, attracting headliners, and innovations, from around the world.

The Summit this year will feature some of the industry’s most influential names in loyalty, including Melissa Studzinski, vice president of customer relationship management at CVS/pharmacy, Jeff Disken, executive vice president of commercial services at Hilton Worldwide, and Peter Lewis, who heads Loblaw’s PC Plus program.

The keynote speakers, meanwhile, promise to make for some thought-provoking, and fun, presentations. Sally Hogshead, author of the book Fascinate: Your 7 Triggers to Persuasion and Captivation, will share her secrets to creating an emotionally engaging brand. Her presentation will include an interactive exercise during which attendees will write their own nine-second fascination statements.

The second keynote speaker, Avinash Kaushik, is known as Google’s “digital marketing evangelist.” Avinash will share some of his tips for building the most effective social media platforms, as well as the tools for properly measuring their success in generating loyalty.

I will be lucky enough to attend the Summit again this year, along with a few of my colleagues at LoyaltyOne. Like many of the other attendees, we are coming to learn from our industry peers, even while some of us will also be there to speak.

Because no matter how long you’ve been in the loyalty business – more than 20 years for me – that less-than-half retention rate can still get the best of us. To learn more about this year’s event, visit the COLLOQUY Loyalty Summit site.

Mediaplanet: What Loyalty Means To The Consumer

Mediaplanet sat down with Bryan Pearson, author of “The Loyalty Leap: Turning Customer Information into Customer Intimacy” and the new e-book “The Loyalty Leap for B2B” to discuss the impact of loyalty programs on today’s savvy consumers.

Most of us have been asked by a sales associate to share our phone number or zip code, but how many of us know what happens to that information once it is shared?

Most of us have been asked by a sales associate to share our phone number or zip code, but how many of us know what happens to that information once it is shared?

In his bestselling book “The Loyalty Leap: Turning Customer Information into Customer Intimacy,” Bryan Pearson reveals his secrets of how companies can use data in ways that benefit consumers while also making good business sense, by building emotional engagement that results in enduring loyalty. His latest book, “The Loyalty Leap for B2B,” will be released July 9th and extends these principles to business-to-business companies as well, helping them build long-term engagement with their clients.

How does this emphasis on customer data affect consumers? Bryan took a few minutes to talk about enterprise loyalty, the relationship between coconuts and calling cards, and the meaning of the “Loyalty Leap.”

Why do consumers need to know about the “Loyalty Leap”?

I believe we are operating in one of the most exciting times for marketers as well as consumers. But we need to shift the conversation about customer data from the marketing department to the boardroom, and eventually to the front lines where the consumer is, so everyone has power to guide the service experience. By understanding the power of their own data, consumers can ensure it is used in ways that benefit them.

In what ways?

First, by sharing personal data only with those brands they care about, and that meet their needs. Consumers should take a few minutes to read privacy statements and understand how their information is being used. If the brand offers a survey, fill it out keeping in mind that the answers will shape your customer profile. Also, there are ways to make the most of the rewards many loyalty programs offer, by consolidating spending to one program, for instance.

In your book, you talk about how “enterprise loyalty” works for businesses, but how does it benefit  consumers?

Enterprise loyalty occurs when a company shares its customer insights beyond the marketing department. Doing so enables the entire organization to see the brand through the customer’s eyes. Supplied with these insights, everyone in the organization can then align their top priorities with the needs and aspirations of their most valuable customers, and they can continually enhance activities to better serve those customers.

Is there a correlation between happy customers and happy workers?

By understanding the power of their own data, consumers can ensure it is used in ways that benefit them.

Not only is there a direct correlation — I’d go so far as to say that a company will not have loyal customers if it does not have loyal, and happy, employees. Genuinely engaged workers deliver something that strategy and effective execution never will, and that’s passion. I believe that happy workers want to provide better service and create relevant experiences. It’s rewarding. But it is up to the organization to empower its workers to make those service-based decisions that will result in memorable experiences.

MP: What is one of the most surprising things data has revealed about your customers?

BP: There is one example, which I call “coconuts to calling cards.” At LoyaltyOne we have technology that allows merchants to analyze sales information at a customer level. We wanted to test this platform, and needed an arbitrary product to run. So I blurted out the first word that came to mind: “Coconuts!” The team ran the word “coconuts” through the database and found the third-highest product that correlated with coconuts was prepaid calling cards. Why? Turns out many consumers who buy coconuts emigrate from other parts of the world, and they get homesick. So they buy calling cards.

It makes perfect sense, but like so many of the insights revealed through data, we never would have guessed it.

July 31: Loyalty Links & Likes

Here are a few loyalty links that caught my eye this week.

1. Kellogg Cracks the Code on Loyalty — AdAge

How Kellogg’s Family Rewards is tracking 2.5 billion packages and what it means for customers.

2. Rite Aid Offers Extra Goodies to Customers 65 and Up — The New York Times

The drug store chain has launched a new loyalty program targeting its senior customers.

3. United and Marriott: Giving the Customer Experience Wings Through Shared Data — COLLOQUY

A Q&A with United Airlines’ vice president of loyalty about the RewardsPlus program by Marriott and United Airlines.

4. Canned Goods–Not Canned Prices With Personalized Pricing — Canadian Grocer

The story reveals how grocers can implement a personalized pricing strategy by capitalizing on customer data.

5. 10 Ways to Use Big Data to Get to Know Your Customers Better — Wired

How companies can use customer data to improve customer experience and gain a competitive edge.

Penguin Initiative a Good Read on Loyalty

Only a person who loves books could appreciate a reward for reading that comes in the form of – you guessed it – more reading.

But Penguin Group, the publishing company, knows its customer. So it recently launched a loyalty initiative, called First to Read, designed to reward avid readers with pre-published galleys of books.

The approach is as straightforward as a passage from Hemingway. At least once a month First to Read offers digital galleys to program members, who can either enter a drawing to win the galley or use their points for guaranteed access. Members earn points by interacting on the First to Read site, such as by reviewing and sharing items.

Suzie Sisoler, Penguin’s senior director of consumer engagement and First to Read’s creator, took a break from books to talk about customer selectivity, the reader culture and the role data plays in saying “thanks.”

Question: What was the watershed event or trend that led to the creation of First to Read?

Answer: It wasn’t so much a watershed event as a consideration of the current climate of connecting with readers. Word of mouth is a very powerful factor in influencing a consumer’s decision to purchase and read a particular book. With First to Read I wanted to explore how we could foster this word-of-mouth outreach by providing a platform to encourage consumers to talk about our books to their network of friends and family through social media channels.

Additionally, we have an increasing amount of competition for a consumer’s attention. The loyalty aspect of the program came about because I was looking for ways that we could encourage readers to have a continued engagement with our books and authors. We thank our readers for participating on the site by offering them points, which they can then redeem for guaranteed access to a digital galley of a book we currently have on offer.

Q: The program is still pretty young, but how has the public responded?

A: I’m very pleased with both the growth in new members and continued engagement from existing members. We’re seeing that members aren’t just entering for a chance at each book on offer, but are selecting the one or two that they would like to read. This is what I was hoping would happen.

We’re also seeing a lot of positive conversation in the social media chatter we’ve been tracking – people are posting about the books they’ve learned about as part of the program and that they’ve had a chance to read early. We hope to see this convert to continued excitement about our books in advance of the on-sale date.

Q: What do the consumer results indicate to Penguin?

A: We’ve had a great initial response and the trend has continued with each offer period, which currently is at least once a month.

This response shows that consumers who identify as ‘readers’ like learning more about books in advance of the on-sale date and appreciate the opportunity to have access to either an advanced reading copy or excerpt.

Q: You have described First to Read as an opportunity to say “thanks” to your customers. In what ways are the data helping to do that?

A: We’re looking at the information members have shared, such as their reading preferences, and what genres are the most requested. We’re then using this information as one of the factors in determining which books to include in the program in future months. Our hope is that First to Read will be a program all readers will be interested in being a part of and we want to make sure we’re doing all we can to facilitate this.

Q: What do you see as the next big trend in loyalty communications?

A: I think better utilizing data to deliver a more customized experience for consumers participating in loyalty programs. So for instance, there won’t necessarily be a one-size-fits-all benefit to interacting with a program, but instead programs will offer benefits and incentives that are tailored to the members’ interests ­– both expressed and inferred by their actions.

Direct Marketing News: Relevancy Is the Cornerstone of B2B Loyalty

Relevancy Is the Cornerstone of B2B Loyalty


Relevancy Is the Cornerstone of B2B Loyalty

B2B marketers face unique challenges establishing connections with customers, who are often part of a team that collectively makes purchase decision. In a recent conversation with Direct Marketing News Bryan Pearson, author of The Loyalty Leap for B2B: Turning Customer Information Into Customer Intimacy and president and CEO of LoyaltyOne, addressed these difficulties, and passionately explained his strategies for successfully building trust and intimacy with B2B customers.

What are the characteristics of a successful B2B organization and how are they getting there?

[One] characteristic of a successful B2B is that it’s focusing on understanding customers at a more granular level and working to create relevant programs and communications for them. It’s also about allowing it as foundation to foster better relationships with customers over time. That’s part of the DNA of the organization—developing deeper insight on customers and formulating integrated strategies.

You stress the requirement for businesses to develop trust. What are the best ways to accomplish this?

It starts with identifying and understanding key companies and customers and differentiating them from prospects. Tracking interactions over time and understanding the kind of activity they have over time in your business. Once you have that view of the customer, [then it's] about how you actually act against that knowledge to build trust and relevance.

Trust is earned by using information you have to build the customer experience and streams of relevant interactions with those customers.

To understand various customer touchpoints you have to create relevance within those touchpoints. Make sure you’re getting feedback from those touchpoints so that you can figure out whether you’re achieving the mutual goals you have set with yourself and your customers. And make sure you continuously measure and adjust plans [based on] whether you’re achieving success and hitting your goals or not.

It sounds mundane but at the end of the day success with building trust within a B2B environment is really about understanding the underlying dynamics of your business. [It's also about] being conscientious about how you architect the experience and touchpoints you have with your customers—to [achieve] the desired outcome from the customer segments you’re pursuing.

What are the difficulties of creating recognition for customer loyalty in B2B that differs from B2C?

I think in a B2C environment what you see is tiering…. That works well where there’s attribution back to an individual—and it would work equally well in small business environment. The problem is that when you deal with [midsize] business or enterprises, tiering itself doesn’t translate well into those environments. You need to look at other means to create recognition.

B2B companies have moved to giving out awards for customer recognition…. Recognition is still a powerful tool in the loyalty tool kit in B2B organizations—it just needs to be applied and thought of in a different manner.

How does a B2B best achieve enterprise loyalty?

Enterprise loyalty is about capturing information about your customers—organizing [that information] into the way you create insight and understanding, and using that as a platform across your organization to change the conversation and strategic context in which decisions are made. Most organizations are product-based—“what service do I sell?” They may understand the market they’re selling to, but they may not understand the full view across the whole organization about how their customers are actually embracing products and services, and how the organization can enhance what they’re doing to build a richer value proposition.

What are some key lessons you’ve learned throughout your career about creating customers for life?

1. Understand the purpose of your organization and ensure that you focus 100% on delivering against the experience customers would expect from buying that product or service.

2. Once you think you got it right, never stop focusing on what you can do better. The spirit of continuous improvement is what keeps you relevant, growing, and ultimately creates health and sustainability for your business over time.

July 24: Loyalty Links & Likes

Here are a few loyalty links that caught my eye this week.

1. Beyond Loyalty: Why Retailers Track Your Every Purchase — The Globe and Mail

The reporter delves into customer data and what it means for Loblaw’s acquisition of Shoppers Drug Mart Corp.

2. Building Customer Loyalty the Hard (And Only) Way — Forbes

Four elements to building a satisfactory customer experience.

3. SodaCard Allows Retailers to Convert Walk-in Customers Through Mobile Loyalty Platform — ClickZ

A Hong Kong start-up has created a platform that helps businesses acquire, retain and communicate with customers.

4. Time to Reward: How Long it Will Take to Get that Flight (or Toaster) — COLLOQUY

A recent report examines which loyalty programs reward participants fastest.

5. Which Travel Rewards Program Is Right For You? — Huffington Post

Story shares U.S. News Travel rankings of frequent flyer and hotel loyalty programs and offers tips to selecting the right rewards program.

Loyalty, Rewards and the Test of Time

When it comes to measuring their program effectiveness, loyalty marketers tend to rely on what I like to call the big EAR: earnings, activation and redemption rates. But recent research out of Canada may be turning those measures on their own collective ear.

The study, by researchers at Environics Research Group, Laval University and Queen’s School of Business (including my own former marketing professor, Ken Wong), investigated the variables that enabled a program to award the fastest. They created an algorithm they call “time to reward” to determine how long it would take different loyalty programs to deliver a $100 benefit.

The results, detailed in the report “Reframing the Conversation on Loyalty Programs in Canada,” showed that programs differ greatly. For instance, it would take three months to earn $100 in travel rewards from the AIR MILES Reward Program, but almost 49 months through WestJet Rewards. The researchers even created an online tool so consumers can see which Canadian loyalty programs earn rewards fastest.

Other highlights of the research’s findings:

—Coalition loyalty programs earn travel rewards fastest. Canada’s largest coalition loyalty reward programs– AIR MILES and Aeroplan – are the speediest among the coalitions.

—Retailer or bank-issued credit cards tend to result in the fastest reward times for cash and merchandise. The Target RBC Mastercard delivered $100 in cash equivalents in two months.

—Annual fees and other costs can, in some cases, be so high that member cannot earn enough points to offset the cost of membership. In other words, a reward is never really earned.

—The ability to double-dip (earning points on a loyalty card and its affiliated credit card) greatly reduces reward times. For example, by using the American Express AIR MILES Reserve credit card, members can see a travel reward in one month, versus three months through the AIR MILES program alone.

With each Canadian household enrolled in 8.2 loyalty programs today, the need for loyalty marketers to underscore their relevance is crucial. If we do not deliver a timely benefit to consumers – one that is equal to the value of their personal information and commitment – we risk our card being left in the bedroom drawer.

However, if we supplement the standard metrics of EAR with the measure of time, we may find ourselves testing our true value to customers.

July 17: Loyalty Links & Likes

Here are a few loyalty links that caught my eye this week.

1. How Twitter Can Help Travel Companies Build Customer Loyalty — Business 2 Community

The social media network is estimated to have 250 million active users; the author shares how travel companies are winning loyalty using the popular channel.

2. 5 Unique Ways To Invest In Your Employees — Forbes

How companies can create loyalty among top performers.

3. Restaurants Are Turning to Loyalty Rewards Apps to Lure Customers — The Wall Street Journal

Eateries are supplementing their loyalty programs with convenient mobile options to keep customers coming back.

4. Starwood Preferred Guest Members Offered Unique 2013 US Open Experiences — COLLOQUY

How the hotel and resort is using memorable experiences to reward its loyal guests.

5. Bye, Bye Burden: Letting Go of Customers That Bring Down Business — 1to1 Media

When firing employees secures employee loyalty.

Accelerating Loyalty with Data-Powered Conversations

The acronym “VRM” may make you think of a fast-moving, industry-accelerating concept, but when I read the meaning behind the term, the first word I thought of was “stall.”

Not that VRM, which stands for Vendor Relation Management, is a bad idea – it makes a lot of sense in many ways. But when it comes to customer engagement and loyalty, I think it is a bit shortsighted.

VRM, as described in a recent story in Marketing Tech, occurs when marketers “stop watching consumers and listen instead to the intentionally broadcast expressions of what they want.” In other words, instead of using our data to watch what customers do and then calculate what they want – basically, targeting customers – we should use their data to respond to specific requests, quickly.

These requests would come directly from the consumer. He or she would announce the desire to purchase a washing machine, life insurance policy or cruise ship tickets and businesses would respond with their proposals. The customer can then pick the vendor of choice.

The logic behind this approach is that by putting the consumer in control of the brand relationships, we can eliminate advertising (or targeting) waste all together. It is, as the author describes it, “CRM flipped on its head.” Or, “Big Data-powered conversations, between the customer and business.”

The challenge I see with this concept, from the perspective of loyalty and engagement, is that it proposes we should only be prospective when the customer wants something. But as many companies can tell you, including those that create new products for unknown needs (Swiffer, anyone?), consumers also are open to suggestion.

As long as there is an expressed exchange, and an enduring one over time, I believe consumers would in fact look for companies to make content personalization a part of their ongoing communications. Going toward a demand-only model doesn’t account for the fact that in any “relationship” there has to be two-way communication, an exchange, an interactive interaction!

So while the idea of “Big Data-powered conversations” makes a lot of sense, limiting the initiation of that conversation to one party limits the opportunity. It also brings to mind a quote by Mark Twain: “Let us make a special effort to stop communicating with each other, so we can have some conversation.”

Amen. And let’s not stall about it.

Leading Loyalty Executive To Reveal Hidden Steps to Forging Profitable Business-to-Business Relationships in eBook

 The Loyalty Leap for B2B, by LoyaltyOne President Bryan Pearson Now Available for Download

NEW YORK (July 10, 2013) – Bryan Pearson, bestselling author and an expert on how to use customer data to create emotional brand loyalty, has now tackled an even more challenging task: building customer-engagement initiatives that benefit business clients.

In his latest book, The Loyalty Leap for B2B: Turning Customer Information into Customer Intimacy, Pearson, president of LoyaltyOne, draws on more than 20 years experience in building customer loyalty in an information age, this time applying his time-proven principles in the business-to-business context. The e-book, which includes case study examples from American Express, Teradata and others, was just pubished by the Portfolio imprint of Penguin Group in the United States and Canada.

LoyaltyOne is a global leader in loyalty program operations, making Pearson a rare expert at extracting the data insights that enable companies to service their customers in ways that are mutually beneficial.

“Most corporations have the tools to identify their best customers and understand their buying habits,” Pearson said. “But few know how to use these tools to build a loyalty or customer engagement program that can be used, with equal advantage, by their business clients.”

Pearson published his first book, The Loyalty Leap: Turning Customer Information into Customer Intimacy in May 2012. Since then, The Loyalty Leap has made the best-seller lists of the New York Times, Wall Street Journal and USA Today. Excerpts have been included in national magazines including Fast Company. Most important, the book’s message has inspired many organizations and marketing experts to change the way they use their data so that it benefits both them and the customer.

The Loyalty Leap for B2B: Turning Customer Information into Customer Intimacy applies this message in the business setting, to reveal:

—The required principles for making the Loyalty Leap in B2B relationships across the small business, large enterprise and channel marketing segments

—The key differences between business-to-customer and business-to-business loyalty initiatives and how to use customer data to support a company’s goals

—The six steps to building a loyalty initiative that will produce enduring business relationships while improving revenue and productivity

—Best-practices case studies from leading organizations that illustrate the Loyalty Leap’s six steps and principles in practice

Publication of The Loyalty Leap for B2B was arranged by James Levine of Levine Greenberg Literary Agency Inc., in New York.

“The Loyalty Leap for B2B is a brief but important sequel to Bryan Pearson’s original book,” said Will Weisser, Vice President and Associate Publisher of Portfolio/Penguin. “No one knows more than Bryan about building engagement in the competitive business-to-business environment, using the best resource available – customer data.”

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About Bryan Pearson:

Bryan Pearson is an internationally recognized expert and author in the fields of enterprise loyalty and coalition marketing. As President of LoyaltyOne, a pioneer in loyalty strategies and measured marketing, he heads six global enterprises, leveraging the knowledge of 120 million customer relationships over 20 years to create relevant communications and enhanced shopper experiences.

A sought-after speaker and author of the bestselling book The Loyalty Leap: Turning Customer Information into Customer Intimacy, Bryan has presented in North and South America, Europe and Asia. He has been quoted in more than 150 news outlets, including The Wall Street Journal, Forbes, BusinessWeek, the Los Angeles Times, MSNBC and the Atlanta Journal-Constitution. He is a regular contributor to Fast Company, Retail Customer Experience, Customer Think and COLLOQUY. He is a member of the Executive Committee of Alliance Data, owner of LoyaltyOne.

About LoyaltyOne

LoyaltyOne is a global leader in the design and implementation of coalition loyalty programs, customer analytics and loyalty services for Fortune 1000 clients around the world. LoyaltyOne’s unparalleled track record delivering sustained business performance improvement for clients stems from its unique combination of hands-on practitioner experience and continuous thought leadership. LoyaltyOne has over 20 years history leveraging data-driven insights to develop and operate some of the world’s most effective loyalty programs and customer-centric solutions. These include the AIR MILES Reward Program, North America’s premier coalition loyalty program and a working partnership with Latin America’s leading coalition program, dotz. LoyaltyOne is also the equity partner of Direxions, a loyalty pioneer headquartered in India and the owner of COLLOQUY, a group dedicated to research, publishing and education for the global loyalty industry. LoyaltyOne is an Alliance Data company. For more information, visit www.loyalty.com.