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.

Proving PR’s Business Value Easier Said than Done, But Not Impossible

Here we go kicking off another week full of media pitching, content marketing, social business and thought leadership strategies, pitching for new business and, most importantly, keeping ThinkInk clients very happy. How do we do that?  It’s not easy but we start by demonstrating and creating value in everything we do.  Why do it otherwise?

So this week’s theme is all about value – what we create for our clients and ourselves.  We’d love to get your views on demonstrating value to your clients, whether or not you’re in PR.  What are the biggest hurdles you face? And your advice to others?

Please share your comments below.

“To know your enemy you must become your enemy” – Sun Tzu, The Art of War, ancient Chinese military treatise

The above quote might sound a little harsh, especially as it relates to public relations and determining its business value, but this is essentially what Kristin Jones, CEO of Wallop! OnDemand, suggests in a recent post on Bulldog Reporter article without directly saying it.

Jones argues that in order for PR execs and their companies to maximize their value to clients, they must begin thinking like them. In fact, not just think like them, but propose solutions and pitches that demonstrate an ability to act like them too. While clients certainly aren’t the enemy of PR companies, sometimes the economics-based and direct dollar value language they speak is so foreign to communications industry pros (who know more about marketing campaigns, crisis management and the sometimes-fuzzy ad value math) that those aspects of a client’s business can feel adversarial. The result is a PR team reduced to second- or third-place status rather than being an integral component to boardroom “elites” or partners.

Jones recommends the following steps to counter this problem:

·         Educate yourself on the economics behind value

·         Make value creation your mission

·         Step out of the shadows

But after reading her article again I was left with this nagging question…. how do PR execs actually educate themselves on the economics behind value?

The answer: they must become their enemy.

Mind you, this is not an easy task. Many in the PR industry claim to have gone the communications route partly because their brains “aren’t wired for finance or business.” Let someone else crunch the numbers I’ve heard many a time. Earning an MBA might seem impractical for more senior executives, but perhaps PR agencies should begin recruiting those with business backgrounds – much in the way they’ve hired ex-journalists to help tell more compelling client stories. Another approach might be an expanded role for a PR company’s in-house accountant, an individual most likely to appreciate and understand your client’s by-the-numbers needs.

There’s also continuing education on the cheap. Coursera, founded last April, is a for-profit online educational outlet that provides free web video courses and has gained significant notoriety in the past several months, attracting some $22 million in venture capital. Courses, which include topics on economics and business strategy, (among many others) are broken up into multiple pre-recorded sessions along with quizzes and the occasional written assignment. How much or how little the student does is entirely up to them.

So perhaps PR agencies should carve out additional time for staff to make use of resources like this. It won’t raise your company’s business IQ overnight. But it could make a lasting, positive impression whose “compounded interest” – an economic term we all should know – really adds up.

And isn’t that what PR is about after all? 

Loyalty Linguistics and the Loss of Value?

You know what the beauty of having your own blog is? The ability to instantly publish your thoughts – especially when you have a bit of a bone to pick with the thoughts of others. Here goes:

Last week, blogger-author and Loyalty specialist Bill Hanifin sought to parse out and expand on a recent LinkedIn post regarding the contemporary challenges facing customer loyalty and loyalty programs in his own blog, HanifinLoyalty.com. The LinkedIn poster, Annich McIntosh, the managing editor of C&M Publications, a UK event managing and media marketing publication, asked her followers if they could come up with one word to describe those loyalty obstacles. Several respondents chimed in over a six-month period. Never one to sit on the sidelines of a public relations debate, (I love a challenge) I too, buzzed in, writing the word: VALUE. “Creating value, shaping value, (of the program and rewards/incentives being offered), proving the program is of value,” I wrote.

I was surprised, then, to find out from Hanifin’s follow-up that no other readers agreed with my word choice, VALUE. What gives?

In my professional opinion, ‘Value’ is the word that best encompasses what respondents were addressing in both Hanifin’s and McIntosh’s posts. Instead, the word most commonly chosen to address loyalty challenges was “relevance.” While relevance is no question a critical component to promoting and expanding loyalty programs, I view it as more of a result than an action. Loyalty programs, or incentives and promotions that attract repeat customers, are essential for a business’s success. But with all the fierce competition and background noise created by many channels these days, it’s in some ways easier than ever for customers to tune out than tune in. Value includes relevance. As for a sampling of the other terms: engagement, differentiation, creativity, and budget, when added up, they too, equal value. (For instance, allocating a sizeable loyalty budget is easy once the value of the program has been established).

But rather than expending all this effort on somewhat trivial mental exercises over which are the most effective umbrella terms, as PR professionals, for ourselves and for our clients, shouldn’t we be promoting value, and not just throwing around terms? Contrary to some opinions that loyalty programs “have mastered the art of enrollment,” I think there’s plenty more to be done – especially as it relates to the still-growing mobile universe and increasing smartphone adoption across all demographics.

When it comes to loyalty campaigns, creating value while ensuring relevance is a good way to start!