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10 Most Common Mistakes by Loyalty Marketers

10 Most Common Mistakes by Loyalty Marketers

The efficacy of loyalty programs is one of those topics that comes up for debate a lot. I recently came across a slide show on CMO.com crafted by Zack Loith, Head of Loyalty Strategy at 500 Friends titled “The 10 Most Common Mistakes of Loyalty Marketing”, prompting me to write this article. 500 Friends is a cloud-based loyalty solutions provider, recently acquired by Merkle, the largest privately-held marketing agency in the U.S.. One of the ways you can be sure to make your loyalty program more successful is to first understand where they often can go wrong. Let’s go through Zack’s list and add a few insights that should help you in your own planning. Mistake #1 says that “Deploying a one-size-fits-all program” can lead to disaster. We agree that every single consumer is unique. Each of us responds differently to ads and promotions, as well as to loyalty programs in general. Personalisation is key in 2015 and should be made a priority. Marketers need to stop talking about personalization and start executing better in this area. Mistake #2: “Setting reward levels without talking to customers”. Customer feedback can strengthen the process of creating rewards that are relevant to consumers. Let’s face it – rewards are one of two critical touchpoints for a loyalty program. You’ve got to get it right at enrollment and the rewards have to be compelling enough to keep members engaged. If you structure rewards based on customer feedback, they should respond as they identify with the value of the rewards available. Mistake # 3: “Celebrating and encouraging use of rewards”. Many marketers continue to... read more

10 Most Common Mistakes by Loyalty Marketers

The efficacy of loyalty programs is one of those topics that comes up for debate a lot. I recently came across a slide show on CMO.com crafted by Zack Loith, Head of Loyalty Strategy at 500 Friends titled “The 10 Most Common Mistakes of Loyalty Marketing”, prompting me to write this article. 500 Friends is a cloud-based loyalty solutions provider, recently acquired by Merkle, the largest privately-held marketing agency in the U.S.. One of the ways you can be sure to make your loyalty program more successful is to first understand where they often can go wrong. Let’s go through Zack’s list and add a few insights that should help you in your own planning. Mistake #1 says that “Deploying a one-size-fits-all program” can lead to disaster. We agree that every single consumer is unique. Each of us responds differently to ads and promotions, as well as to loyalty programs in general. Personalisation is key in 2015 and should be made a priority. Marketers need to stop talking about personalization and start executing better in this area. Mistake #2: “Setting reward levels without talking to customers”. Customer feedback can strengthen the process of creating rewards that are relevant to consumers. Let’s face it – rewards are one of two critical touchpoints for a loyalty program. You’ve got to get it right at enrollment and the rewards have to be compelling enough to keep members engaged. If you structure rewards based on customer feedback, they should respond as they identify with the value of the rewards available. Mistake # 3: “Celebrating and encouraging use of rewards”. Many marketers continue to... read more

8 Global Best Practices for Building Coalition Loyalty

  Linking brands from different industries to create an “umbrella” value proposition for consumers is known as a Multi-brand or Coalition loyalty program.   This structure is the dominant one in many geographic markets outside the US. There are over one dozen coalition programs that have successfully operated for more than 15 years, and Hanifin Loyalty has had the opportunity to work with several of these programs as well as contribute to the launch of newer programs.   Coalition Loyalty Programs A quick list includes:  Aeroplan (multiple markets) AirMiles (Canada) Bonus Peru (Peru) Dotz (Brazil) Grace Kennedy Value Rewards (Jamaica) KickBack Rewards (US)   Building coalition loyalty programs successfully requires a fresh look at the strategic planning process. The programs are complex, there are competing interests, and the financial modeling which underlies business case development and budget procurement is complicated.   With more Coalition Loyalty activity in the US than ever before, we thought it a good time to share our view of 8 Best Practices for Building Coalition Loyalty, based on our accumulated experience.    8 Coalition Loyalty Best Practices Customer Experience – The value proposition offered (as with any loyalty program) should communicate simplicity and transparency. It must be easy to understand, and members should quickly identify benefits. There should be multiple earn and burn opportunities across the partner network.   Common Currency – A shared monetary system must be the coin of the coalition realm. It should be available on a consistent bases across the network of participating merchant. Partner Diversity – Optimal structure includes well recognized brands in key daily spending vertical markets. Fuel, retail, grocery,... read more

Re-Calculate: 3 Words For Loyalty Marketing in 2015

Hanifin Loyalty chose 3 words to help focus our efforts towards a successful 2015. We landed on: Re-Evaluate Re-Position Re-Calculate Today, we share a deeper dive on the 3rd word in the series: Re-Calculate When the Wall Street Journal took a look at the key business issues to be reckoned with in 2015, heightened pressure on the C-Suite was among the most important themes. Most business people can relate to the unrelenting pressure felt today on financial performance and budgetary adherence. But consider this: 45 companies among the S&P 500 index replaced their CEO’s during the first 9 months of 2014, equating to a faster turnover rate than in the previous year. The reality of this trend is that pressure from investors and other stakeholders will continue to be enormous and the demands on C-Suite accountability won’t relent any time soon.   To manage marketing budgets with highest efficiency and accountability, C-Suite executives should continue to place priority on investments in data-driven marketing programs. There is no more secure place to invest marketing dollars than in financially accountable marketing programs, however, relying on measurable marketing plans won’t always translate to mean that every brand should have a loyalty program. Every brand needs to have a well planned and executed customer growth strategy, but not every outcome of the planning cycle will result in a loyalty program.   To realize the highest rate of success and return on invested marketing funds in 2015, brands should increase emphasis on program measurement. Think about what needs to change in order to Re-calculate (or Measure) the impact of your customer marketing efforts on... read more

Re-Position: 3 Words For Loyalty Marketing in 2015

Hanifin Loyalty chose 3 words to help focus our efforts towards a successful 2015. We landed on: Re-Evaluate Re-Position Re-Calculate   Today, we go deeper on word #2 Re-Position If you’re familiar with the shooting sports, you’ll know that to hit a target you have to aim for where it “will be”, not “where it is”. If you buy-in to the evolution in human behaviors that we talked about in word #1, Re-Evaluate, then you should easily embrace a big challenge for this year – to go beyond adapting to changes that have taken place and are widely recognized, and to re-position your customer marketing strategies to serve customers as they continue to evolve.   Marketers can make a best-efforts attempt to predict what the evolved customer might look like, but have to accept that predictions can be made with only limited certainty. People are, after all, people. They often say one thing and do another. That alone is reason enough to continue to invest in data-driven marketing in 2015 and beyond. It’s also a reason to consider how you can connect the online profiles of your loyalty program members to their behavioral data to better understand how customer preferences might evolve. Another way to define Re-position is to think about Shift. Brands cannot fool customers anymore. There is no amount of loyalty currency that will consistently entice consumers to buy your product online or frequent your stores if the experience interacting with your brand is sub-par. Brands need to Re-Position (or Shift) their thinking to invest first in their own employees and create a cooperative and reasonably happy... read more

Re-Evaluate: 3 Words For Loyalty Marketing in 2015

A budding tradition at Hanifin Loyalty has been to select 3 words that we believe will define the course of the data – driven customer marketing business (you can refer to it as Loyalty Marketing, if you prefer) over the next 12 months. Doing so represents much more than an excuse to write a “New Year’s” blog post. There is substance behind each word and, even if you don’t entirely identify with the word itself, the supporting explanation of each one should provide thought provoking points about customer loyalty trends to take back to your office. The 3 words chosen for this year are shown below and we start off by diving into our thoughts behind Re-Evaluate. Re-Evaluate Re-Position Re-Calculate   Re-Evaluate By now, there should be C-Suite recognition of the influence on customer behavior by information transparency, consumer attention span, and the entitlement mentality. Above all, the customer growth strategies that we create must stimulate behavior change. To be successful, marketers need to firmly understand how the baseline of human behaviors are evolving and re-evaluate how we create strategies and campaigns that will have positive impact. If we remember that all customers are human beings – no matter what they say while on the phone with your call center – then we must agree that seeking to understand trends in human behavior is critically important to being able to connect and develop dialogue with our customers. Reported over the past several years as an influencer of purchase behavior, the availability and transparency of information has not only “empowered” the consumer, it has completely changed the mindset which marketers... read more

Snapchat and Square partner to create “Snapcash”

Snapchat and Square have teamed up to create a peer-to-peer money transfer system dubbed “Snapcash”. Snapchat said in a blog post announcing the new service, “The product you’re seeing today is fast, fun, and incredibly simple. After you enter your debit card, it’s securely stored by Square, who will swiftly process your payment and send cash directly to your friend’s bank account. Just swipe into chat, type the dollar sign, an amount (e.g. $11.25), and hit the green button.” There are over 100 million active monthly users already signed up to Snapchat, but to send money to a friend you must be over the age of 18, a threshold that should exclude a good portion of the Snapchat user based. Snapchat has already fallen prey to security breaches, leading many to become skeptical of the safety of the service. Earlier in the year, hackers leaked around 4.6 million usernames and phone numbers and posted them publically online. There was also a major photo leak involving tens of thousand users on Snapchat, some of which included nude photos. Snapchat said, “We set out to make payments faster and more fun, but we also know that security is essential when you’re dealing with money. Square has a ton of experience in this area and our teams have been hard at work to make Snapcash a great experience for everyone.” When creating an account, Snapchat users must first register for a Square Cash account. Bank account details are stored with Square, which has vastly more experience in the payments field. To give users more confidence in its service, Snapchat has agreed to be monitored by... read more

A Millennial View on Revamping a Loyalty Program

A loyalty program is an awesome asset for small to large businesses to incentivize customers if implemented correctly. Consumers are more likely to return for repeat visits especially if the rewards are directly relevant to them. Keeping a loyalty program up to date is key. The times are changing and the day of the punch “loyalty” cards are over. Savvy consumers, especially Millennials and younger generations, want to visit like-minded businesses and restaurants with loyalty programs. Some people believe doing away with loyalty programs all together is the way to go, though many disagree. First and foremost, as a business owner, you must learn who your customers are, what they want, and how to reward them in a way that translates into repeat visits. If you have the tools to collect data on your customers, then by all means collect it! (This can be done with a simple customer survey if you lack advanced methods.) Now put yourself in the customers’ shoes – How do they earn rewards and how long does it take? Making rewards easy to achieve i.e. not making your customers jump through various hoops for a simple 10% discount will make the customer feel as if they are working towards something achievable (and yes, in the near future). There are tons of ways to solve this issue, and here are just a few: Create different reward tiers, reward customers for reaching certain milestones, or set a specific day for customers to earn bonus points. There are many different ways to facilitate a loyalty program with all the new technology available. Rather than using a punch... read more

Is Bitcoin an investment medium or a payment system?

The title of this article is a question that I posed to a group of panelists discussing the future of digital payments at a recent Refresh Miami event. Mention Bitcoin to colleagues in your work place and you will hear responses expressing everything from confusion to enthusiasm to outrage. Generally speaking, Bitcoin is not well understood and on the eve of my visit to Money 2020, I wanted to unlock some of the mystery and intrigue around the cyber-currency. To do so, I sat down with one or two trusted sources on digital payments and e-commerce to learn more. It’s less important “who” they are than “what” they know. I’m choosing to keep their comments anonymous as most responses from Bitcoin backers carry a highly emotional component. Save for one very thoughtful response to a group of questions from @junseth which you can find here, what I mostly received were incredulous responses implying my lack of understanding of Bitcoin potential or my willingness to grip the inefficiency that exists in today’s payment system. Neither is true, and my earnest question was clearly the equivalent to poking a stick into the Bitcoin cage. Sitting down with my expert colleagues, here is what I learned: Bitcoin is a community-driven open source project conceived by the mysterious Satoshi Nakamoto and outlined in a paper published Nov 1, 2008 Satoshi Nakamoto is believed to own over 5% of the Bitcoins within the system – which at its peak was worth over $1 billion. Given the lack of transparency around his identity and level of control, our sources termed Bitcoin a purpose-built “business model”... read more

Building a practical framework for Contextual Loyalty

Having context for something implies we have experienced something like it before. It is impossible to have context for a subject or person without prior experience. And, it is that prior experience which frames our perception of an ensuing interaction, even a transaction. The moment you are living now will have a more satisfactory result if you have context for the situation or the relationship. It is context that fills us with rightful expectation or warns us to remain on guard. Making your Customer Strategy contextual means that, as an organization, you’re well served to establish awareness of your brand, communicate values and a brand promise to breed trust with people who may one day become customers. The evolution of Social Loyalty into Contextual Loyalty highlighted where the real value of using social networks as marketing channels could be found. It wasn’t about channel penetration and coverage, it was about the value created through the content served up that mattered. As brands raced to establish a presence in as many online social venues as possible, they found that it was hard to keep pace. Like chasing a runner who’s got more gas than you do, the ability of brands to take stock of every new social network introduced to the market left them wanting. Without time, understanding, and often human resource to create an optimal impression in every channel, brands settled for something regrettably superficial, eroding trust among their current and potential customers in the process. Moving from social loyalty to contextual loyalty shifts focus from channels to value. Online, that value translates to trust when communications are transparent... read more

The convergence of Loyalty Marketing and Gamification

I’m thinking a lot about where the convergence between Loyalty Marketing and Gamification will have the most impact for marketers. My participation as a judge in the LoyaltyGames has me focused on this subject, as did my presentation last month at Gabe Zichermann’s GSummit. My topic was titled “Beyond the transaction, Could Loyalty’s next act be Gamification?” The format was Ted-like in that presenters had a tightly defined 21 minutes to present, with Q&A deferred to networking sessions throughout the day. Attendees to the event remained highly engaged as the steady turnover of presenters with fresh material kept everyone’s attention. Here’s a link to the conference video site if you want a first hand view of the GSummit, an event that I’m sure to include in my 2015 calendar and suggest that you should too. I set out to take attendees on an adventure, to play a collaborative game. Call it the Clue version of “Loyalty Marketing”. You might remember Clue, the old school murder mystery board game. Well, it has been refreshed and relaunched, now carrying the persona of “the mystery you love to solve again and again…only now its more intense”!!! That’s about where the state of Loyalty Marketing sits today. It’s a familiar game, but it’s still a mystery to some people. There are widely distributed clues and well understood rules of the game, but players tend to arrive at vastly different conclusions after playing for a while. One Clue that we have is that making loyalty programs more “contextual” could be the key to engaging today’s digitally connected consumer and find renewed success with data-driven marketing.... read more