Is Customer Loyalty Earned, Bought or Both?

"Why was God able to create heaven and earth in seven days and seven nights? Because he didn't have installed customers and legacy technology to worry about." – Brad Smith, CEO, Intuit.

That’s what Smith told Fast Company earlier in the year when he was pondering this question: How do you actually move an existing group of customers from what they fell in love with to the next thing that could be great?

What he’s specifically talking about is near-field communications (NFC), a technology that uses a low-power radio signal to transmit information between two devices – such as a point-of-sale system and a consumer’s smartphone – and enables consumers to take actions such as making payments simply by tapping their phones against a terminal. I’ve written about NFC quite a lot, as well.

Mobile marketing pundits have been trumpeting NFC as the next big thing for several years, but as recently as September 2013 only 18% of American smartphone users owned an NFC-enabled device. And that’s primarily because tapping a phone isn’t all that different from swiping a card or handing over cash. 

In other words, consumers have been so well conditioned to using cards (prepaid, debit or credit) that it’s difficult to get them to embrace a new technology that requires them to change their habits – and there’s a similar dynamic in loyalty.

Loyalty program engagement has dropped 4.3% since 2010, but program memberships have continued to climb – there are 2.65 billion of them in the US alone! Clearly, consumers are used to joining loyalty programs, but when they find them unengaging, they stop using them, remaining members in name only. 

Not exactly a recipe for lasting brand loyalty, is it? Brands need to earn their customers’ goodwill and repeat business. That means communicating with them through their preferred channels and taking the necessary steps to know their wants and needs and so give them rewards that add actual value to their lives.

ThinkInk works with some loyalty companies that really get this.

For instance, Toronto-based Points, runs a virtual loyalty wallet where members can track, trade and redeem a variety of rewards currencies in one convenient location. Not only do consumers have more freedom to use their rewards how they want to, participating brands get to share some of their customer data for a clear picture of customer wants and needs that allows the brands to make relevant offers.

Another company, Kula Causes, built an online platform where brands can allow their loyal program members to convert unused points or miles into cash donations to the charitable organizations that mean most to them (there’s over 2.5 million to choose from!)

In this case, Kula’s partner brands, which include JetBlue and Kellogg’s, earn their loyalty members’ “brand love” – and longer-lasting business relationships – by acting as conduits for those customers’ charitable instincts.

We’re also lucky enough to work with Kobie Marketing, an award-winning loyalty marketing firm that has built many of the world’s most successful customer loyalty and CRM programs for brands including Verizon, AMC Theatres, TGI Fridays, BJs Restaurant & Brewhouse and Royal Bank of Canada. They were recently selected as a leader in customer loyalty services for the second time by Forrester Research, Inc. The findings were published as part of a comprehensive assessment of customer loyalty program service providers in the Forrester Wave™: Loyalty Program Service Providers, Q4 2013. The recognition showcases Kobie Marketing as a loyalty industry innovator while underscoring how companies such as Kobie help brands build programs that track, understand, reward and grow customer value and engagement. Go Kobie!!

Another client, the Fuel Rewards Network is a free rewards program that significantly cuts consumers fuel costs. Members of the FRN program are rewarded at the pump and through their regular purchases at local grocery stores, restaurants and online retailers with cents-per-gallon off savings that can then be redeemed at Shell gas stations around the country. In just over a year, the Fuel Rewards Network has saved Americans more than $240 million in fuel costs with members saving an average of .28¢ on every gallon. All of us at ThinkInk have enrolled in the program – and it’s open to everyone. Visit www.fuelrewards.com to learn more.

Last but not least is PointsHound. PointsHound, which launched in beta in October 2012, is a new type of online hotel booking site that caters to the coveted and valuable frequent traveler demographic by offering an unprecedented rate of airline, hotel and retail rewards for every hotel stay booked on the site, at more than 150,000 properties around the globe. Travelers can choose to earn points and miles with a growing roster of 12 loyalty rewards programs, including American Airlines AAdvantage, My Best Buy, Flying Blue and Virgin America Elevate when making their hotel reservations at PointsHound.com.

You could argue that customer loyalty is bought with discounts – and that’s true if we’re talking about a program that incentivizes exactly the same behaviors without being imaginative and thinking about the whole customer experience. And in an age of diminishing loyalty engagement, the overall experience is more important than ever to earn and keep a customer’s ‘brand love.’

So, while it’s actually some of both, I’m of the opinion that the best and most powerful loyalty is earned by brands that go the extra mile to better know their customers and give them the kind of true value that can drive those relationships for a lifetime.

If you belong to a loyalty program – and chances are you do – how does the brand earn your “love,” if at all? What experiences have enhanced or diminished your brand loyalty? Share your stories with us below.

Tablets will soon be top, driving engagement and consumer relevance

This article originally appeared on Mobile Commerce Daily by Vanessa Horwell, Chief Visibility Officer of  ThinkInk on 06/12/12.

Make no mistake. The prediction business is a precarious game. According to the late astronomer-professor Carl Sagan, ancient Chinese court astrologers whose predictions proved wrong were executed. Less lethal are the quotes attributed to those who thought they knew what was coming but did not. I have been known to get a few wrong myself.

Whether it was Popular Mechanics’ no-longer-profound statement that “Computers in the future may weigh no more than one-and-a-half tons,” – an iPhone comes in at 4.9oz, an iPad under 1.5lb and my BlackBerry at 4.3oz – or BusinessWeek’s 1975 call that the paperless office would arrive before the close of the 20th century, both predictions, while bold for their time, could not entirely free themselves from the prism of their time.

In other words, envisioning a computer that weighed less than 3,000lb was impossible and the paperless office was as much inspired by Jetsons-era imaginings as it was based on the factual advance of the microchip.

Nevertheless, the guessing game continues.

Bet’s on
Marketers make predictions about mobile commerce’s 2016 dollar value, research firms postulate a laptop-less world, and the Kentucky Derby, Preakness and Belmont Stakes draw thousands of errant betters.

But if predictions are precarious, here is a safe observation I can make: when it comes to tablets and their ability to engage consumers and entice them with marketing messages, we have not even scratched the surface. Repeat, we have not even scratched the surface.

But since this article is about pushing the prediction envelope, here is a riskier call: in the tablet versus smartphone battle, tablets may ultimately win out as the go-to mobile Web interface and social media communicator.

There’s no denying that the tablet has had a rocky road, taking some 17 years to mature from the poorly received Newton Message Pad (remember that?) to having a category all its own.

But with the massive success of three iPad roll-outs over 29 months and competitors such as Samsung, Amazon and others locked in an aggressive game of catch-up broadening the consumer market, pushing their capabilities – retina display, Flash and NFC – tablets have become mainstream.

And like the modern smartphone whose arrival came shortly before it with BlackBerry in the late 1990s and the iPhone in 2007, the potential for marketers to reach and engage potential and existing consumers via tablets has never been greater – poised to have as great an impact on mobile marketing in the unfolding second decade of the 21st century as smartphones had in the closing years of the first decade of the new millennium.

On second thoughts, make that greater.

Tabulating the numbers
From what I can see, part of tablets’ success lays in the adoption rates – a fact, which began landing front-page ink and Google search hits back in January 2012.

One of my blog posts earlier in the year made note of the impressive statistic that in the span of a few weeks, the number of U.S. tablet owners nearly doubled to 19 percent from 10 percent. As it turns out, this was no Christmas gift fluke.

In April 2012 it was reported that global tablet sales tripled in year-over-year shipments. Some sub-groupings such as doctors saw adoption rates as high as 62 percent. Sound familiar?

Those were the same type of eye-popping data points surrounding iPhone purchases last October when just over a third of U.S. consumers owned one.

While it is important to remember that a tripling of anything is easy when you start with lower numbers, I do not think that is truly what is in play here.

Pardon the pun, but tablets have finally come out of their shells.

With smartphone adoption rates now at nearly half the United States population – and rising rapidly – consumers already expect high-speed mobile Web access. Tablets deliver a similar experience but deliver it better. Why?

Let us start with the larger screen that gives marketers greater “screen real estate.”

In other words, more space to engage and sell more stuff.

There are also indications that tablets, because of their larger size, ironically have greater market flexibility.

Apple might be today’s dominant tablet maker, but others such as Samsung continue to find their niche by designing so-called “hybrid devices” – smartphone and tablet combined.

The Galaxy Note, which launched in October 2011, is an excellent example.

While I am still married my BlackBerry because I can knock out articles such as this one with its miniscule 

keyboard in the back of a taxi or while I am between flights and so on.

As they say, old habits die hard but I am very close to committing device adultery. The device comes with a 5.3-inch screen, makes phone calls, stores music, runs Adobe Flash and comes with a stylus.

But the Galaxy Note is just the beginning.

Jablets, wablets, phablets?
So successful has Galaxy’s entry been into the “midsized” tablet market that a new term is rising up to define the industry segment. Enter the Phablet. And no, I did not just bite my tongue.

Phablet describes the combination of a phone and a tablet. These devices, being launched by HTC, LG and Huawei, are set to enter the market later this year and shipments are estimated to top 208 million units by 2015.

Their launch timetable may coincide with the rumored release of the “iPad mini” – another example of the specializing tablet landscape.

By contrast, smartphones are limited in their ability to adjust their size much further. Too small and the notion of hunting and pecking for touch-screen button and key strokes takes on a new, almost absurd notion. Any bigger and they bump into tablet turf.

“Tapping” into a whole new touch-screen audience
Referencing the term “midsized” tablet is reminiscent of the evolving family car.

Nearly all cars go from zero to 60 in similar-enough amounts of time, measured in second differences, offering similar performance, but nevertheless, the average size of the American car continues to grow, clipped only at brief interludes when high gas prices forced a downsize.

Arguably, cars got bigger because marketers could pack more amenities into a larger space and consumers soon expected the added room.

The technology under smartphones’ digital hood is no different than my car comparison and very similar to the technology behind the tablet.

iPhones have proven touch screen and retina display viable technology. But for marketers, a 3.5- to 4-inch screen space is no longer enough for customer engagement.

Tablets and phablets and whatever other names they will eventually be called bridge that gap while relying on the same anywhere and everywhere connectivity that 3G- and 4G-enabled smartphones presently deliver.

Already the National Retail Federation has found that nearly half (49 percent) of retailers say their tablet customers spend more per mobile purchase and account for 3.2 percent of Web purchases versus 1.5 percent for smartphone Web sales.

Think of tablets like digital shopping carts. Like cars, shopping carts have also expanded, along with aisle width, bricks-and-mortar square footage and the number of products per shelf.

Seen in this light, the digital shopping cart – the tablet – it is not surprising that half of retailers would report such findings.

Just imagine a 10th generation iPad that produces a three-dimensional holographic image of your favorite store. With the tap of a screen you can walk through an immersive environment of your choosing wherever you happen to be.

But before I leap into prediction mode, let us stick with the present.

If customer loyalty is all about engagement, then Apple’s 2048×1536 pixel retina display is critical. I have used it myself and agree with reviewers who describe its visuals as so rich and vivid that images appear “painted.”

While shoppers cannot gain a complete experiential marketing moment, touching and inspecting an item, nor has 3-D fully matured, but retina display, like HDTV, gets customers so very close to the actual bricks-and-mortar experience.

Combined with burgeoning Near Field Communication technology that promises a future of mobile wallets and location-based marketing via Bluetooth and WiFi – attracting shoppers when they are in-store or in proximity of a store – tablets are becoming a much larger picture – and screen – of the marketing landscape.

Future awaits – no matter how it is predicted to unfold
Back in September 1993, Peter H. Lewis, a writer for The New York Times, said this about the Newton:

“Apple promised too much and failed to deliver a useful device for everyday executive chores. 

[However,] the Message Pad practically hums with untapped potential, and six months…to a year from now it is likely to be a popular executive tool.”

Ha! Mr. Lewis’ prediction that the Newton tablet would be commonplace proved incorrect. But like the technology that began the tablet torrent 17 years ago, he was correct in his understanding of the device’s potential.

Almost a generation later and tablets are finally coming in to their own, un-tethered from PCs, laptops and, of course, smartphones.

For marketers and consumers, that is not a prediction – it is a fact.

Ultimately, predictions are not just made for the sake of it. Nor do they rely solely on existing technology. Predictions are a healthy amalgam of insight, foresight, facts and dreams. So was it foolish for BusinessWeek to envision the paperless office? No. It was quite daring.

The BusinessWeek article evaluated what was already possible in 1975 and extrapolated what was probable in the decades ahead.

In that leap-of-faith spirit, here is my final tablet truth: what tablets 2.0 – next-generation tablets – really need is for them to be as compact as today’s smartphones but be able to “unfold” to the size of a tablet.

Demonstrating what’s already possible, Atmel, a California-based semiconductor company, continues to promote its flexible touch screen technology, which uses thinner sensors than existing screens and has better battery life.

Such examples may not be the full realization of a Jetsons-style flying car that folds into a suitcase, but it is anyone’s guess – or prediction – of what is possible in the decades ahead.

As for me, I think it is an upgrade for which marketers should be on the lookout – before the still-hot traditional smartphone market folds. And I am not talking about in the flexible screen manner.

This article originally appeared on Mobile Commerce Daily by Vanessa Horwell, Chief Visibility Officer of  ThinkInk on 06/12/12.