Customer loyalty is dynamic, compelling and changing all the time. Awareness of a loyalty program’s importance was once relegated solely to a handful of sponsors of a program at a company, or those of us toiling in our industry to support the program. Today, loyalty programs are an enterprise initiative — reflective of the customer experience of brands, managed by customer service, finance, marketing, operations and IT, driven by segmented media and consumer campaigns, and expected to drive ROI, fostering lifelong connections and creating lifetime brand value.  The loyalty and customer experience landscape has been positively impacted by several exciting trends: - The analyses of Big Data which derive meaningful consumer behavioral insights.  We challenge ourselves and our clients to use it to create genuine experiences versus the more simplistic points-for-rewards stereotypes  - The need for devices and channels (think smartphones, tablets, digital signage, kiosks, radio, TV, print, etc.) to create a consistent customer experience.  We need to build omnichannel loyalty programs, and then mine the data sets they create - The importance of having programs that appeal to both the rational and emotional sides of the brain — emotional connections can include elements of gamification and social media, while rational are the tangible rewards e.g. discounts or coupons These trends – and other insights – form the backbone of the Kobie Knowledge Quarterly Review.  Our goal is to bring to you loyalty landscape commentary and analyses of where the loyalty industry is heading.  We welcome conversations about loyalty through our observations, commentaries, insights and, in some cases, criticisms of the developments taking place. We hope the Kobie Knowledge Quarterly Review leaves you with a greater appreciation that customer loyalty isn’t just about the program itself. Or even solely for driving ROI and heightening customer engagement. Loyalty, the bond an individual makes with another, is central to the human condition. It’s about reciprocity, faith, trust and at its greatest intensity, a type of moral obligation, akin to the connections we forge with family and friends.  Brands and businesses, the best ones, are no different. Michael Hemsey, President Kobie Marketing, Inc.

1. KOBIE
QUARTERLY
REVIEW
JUNE 2013
7 Spotlight
Creating Optimized
Customer Experiences
By Bram Hechtkopf
15 Retail Review
J.C. Penney and the
Billion-Dollar Question
17 Restaurant Spotlight
Genuine Customer
Experience is Back for
Seconds
By Marc Glazer
RETAIL EDITION
THINGS YOUR
RETAIL
CUSTOMERS
EXPECT THIS
YEAR
BY MICHAEL HEMSEY
PAGE 9
@Kobie_Marketing
on.fb.me/17n5zxV
linkedin.com/company/kobie-marketing www.kobie.com

2. CONTENTS
10% Of real-time data is
actually being utilized
missed opportunities
$$
The New Customer ConnectionThe New Customer Conn
big databig data
OMNICHANNEL LOYALTYOMNICHANNEL LOYALOMNICHANNEL LOYALTY
p.o.s. tweets likes surveysemailwebsites blogsforums purchases
Too often marketers fail to incorporate loyalty early enough
into the omnichannel “big picture.” It isn’t about offering a
discount, it’s about offering someone the right offer at the
right time.
Big Data refers to the constant incoming information so
large it surpasses what typical storage tools can handle. A
recent IBM study showed that only about 10% of real-time
data being collected is being used effectively by businesses!
$$ $$
$$ $$
$$
$$
$$
$$
$$
$$
Omnichannel loyalty (OCL) is an enterprise-level initiative to drive, track, measure and reward
incremental behavior throughout the enterprise and customer experience.
With omnichannel loyalty, traditional loyalty attrition is reduced, as brand advocates play
an enhanced role across the customer lifecycle. Consumers become empowered through
a mix of compelling and coordinated cross-channel engagements, as well as truly
personalized messaging that delivers more meaningful and relevant brand interactions, and the
right reward for the “right” behaviors along the way. The result when executed with precision is a
true impact on customer lifetime value (LTV) – the ultimate loyalty metric.
$$
$$
$$
$$
$$
$$
Of businesses created
an experience-based
42%
Of businesses defined
customer engagement
37%
Of customers expect a
similar experience
42%
Of businesses surveyed
indicated little to no
58%
90%
Of Big Data becomes
missed opportunities
$$ $$
$$
4
CREATING OPTIMIZED CUSTOMER EXPERIENCES
Ask marketers or loyalty marketing service providers (L-MSPs) what the common
2013 theme is and they’ll tell you “convergence” – just like 2012. But what type of
convergence do I mean? By Bram Hechtkopf
7
FIVE THINGS YOUR RETAIL
CUSTOMERS EXPECT THIS YEAR
While Toys “R” Us’ recent miss stems from
heightened discount competition, some of
the company’s shortcomings might be
internal too – hyper-reliance on excessive
discounts. By Michael Hemsey
5 WHEN IT COMES TO LOYALTY, EXPERIENCE IS EVERYTHING
Summing up loyalty comes down to experiences: positive experiences engendering
decades of loyalty and negative ones that take longer to subside. By Michael Hemsey
9
MOVING FROM TRANSACTIONAL
TO EMOTIONAL LOYALTY
Consumers increasingly expect an enhanced
brand experience, one that takes loyalty
beyond the points-for-rewards stereotype,
delivering on emotional experiences as much
as any tangible reward. By Bram Hechtkopf
www.kobie.com

3. FOUR THINGS YOUR RESTAURANT LOYALTY PROGRAM
SHOULD BE DOING TO EMPOWER CUSTOMER ENGAGEMENT
Faced with these uncertainties, restaurant loyalty programs are more valuable than ever
in attracting, engaging and retaining patrons. By Marc Glazer12
GENUINE CUSTOMER
EXPERIENCE IS BACK FOR
SECONDS
Ask the technology skeptics whether
they think technology has helped or
hindered interpersonal communication,
and invariably they’ll offer muted
grumblings like “talk much, say little,
connect less.” By Marc Glazer
SOLVING THE RIDDLE OF BIG DATA
For all the talk of Big Data and its global impact, more than a quarter of North American
retailers in 2012 — 27% — remain unaware of Big Data or are aware of its existence,
but uncertain of its retail potential. By David Andreadakis
JCP AND THE BILLION-DOLLAR QUESTION
Coupon king Myron Ullman is back in the spotlight trying to save J.C. Penney from
itself. But can he succeed? That’s the $1 billion question being asked by media and
retail industry experts. By Bram Hechtkopf
STARBUCKS AIMS TO
CREATE LOYALTY FROM ITS
DISLOYAL CUSTOMERS. HUH?
It’s rare when a company voluntarily
admits it could do something better –
especially when that company is
Starbucks. With a record $1 billion
placed on its Starbucks Cards in the first
quarter of 2013, the king of coffee has
little to worry about. By Pamela Sullins
25
THE KEY TO PERSONALIZING EACH CUSTOMER’S LOYALTY
EXPERIENCE? ACTING ON BUSINESS INTELLIGENCE
Individualized
pricing,
however,
is
just
the
beginning.
A
growing
number
of
brands
across
different
ver=cals
(most
no=ceably
in
financial
services
and
retail)
are
upping
their
loyalty
game
by
trumpe=ng
the
value
of
individualized
experiences
over
just
discounts
and
deals.
By Michael Hemsey
15
17
20
ARE LAST YEAR’S BIGGEST TRENDS IN THE LOYALTY INDUSTRY
CHANGING, OR ARE THEY GROWING?
Big Data, social media and the continued expansion of mobile market saturation were all
topics of wide discussion and analysis throughout the loyalty industry. By Bram Hechtkopf
22
www.kobie.com
2

4. Customer
loyalty
is
dynamic,
compelling
and
changing
all
the
=me.
Awareness
of
a
loyalty
program’s
importance
was
once
relegated
solely
to
a
handful
of
sponsors
of
a
program
at
a
company,
or
those
of
us
toiling
in
our
industry
to
support
the
program.
Today,
loyalty
programs
are
an
enterprise
ini=a=ve
—
reflec=ve
of
the
customer
experience
of
brands,
managed
by
customer
service,
finance,
marke=ng,
opera=ons
and
IT,
driven
by
segmented
media
and
consumer
campaigns,
and
expected
to
drive
ROI,
fostering
lifelong
connec=ons
and
crea=ng
life=me
brand
value.
The
loyalty
and
customer
experience
landscape
has
been
posi=vely
impacted
by
several
exci=ng
trends:
• The
analyses
of
Big
Data
which
derive
meaningful
consumer
behavioral
insights.
We
challenge
ourselves
and
our
clients
to
use
it
to
create
genuine
experiences
versus
the
more
simplis=c
points-­‐for-­‐rewards
stereotypes
• The
need
for
devices
and
channels
(think
smartphones,
tablets,
digital
signage,
kiosks,
radio,
TV,
print,
etc.)
to
create
a
consistent
customer
experience.
We
need
to
build
omnichannel
loyalty
programs,
and
then
mine
the
data
sets
they
create
• The
importance
of
having
programs
that
appeal
to
both
the
ra=onal
and
emo=onal
sides
of
the
brain
—
emo=onal
connec=ons
can
include
elements
of
gamifica=on
and
social
media,
while
ra=onal
are
the
tangible
rewards
e.g.
discounts
or
coupons
These
trends
–
and
other
insights
–
form
the
backbone
of
the
Kobie
Knowledge
Quarterly
Review.
Our
goal
is
to
bring
to
you
loyalty
landscape
commentary
and
analyses
of
where
the
loyalty
industry
is
heading.
We
welcome
conversa=ons
about
loyalty
through
our
observa=ons,
commentaries,
insights
and,
in
some
cases,
cri=cisms
of
the
developments
taking
place.
We
hope
the
Kobie
Knowledge
Quarterly
Review
leaves
you
with
a
greater
apprecia=on
that
customer
loyalty
isn’t
just
about
the
program
itself.
Or
even
solely
for
driving
ROI
and
heightening
customer
engagement.
Loyalty,
the
bond
an
individual
makes
with
another,
is
central
to
the
human
condi=on.
It’s
about
reciprocity,
faith,
trust
and
at
its
greatest
intensity,
a
type
of
moral
obliga=on,
akin
to
the
connec=ons
we
forge
with
family
and
friends.
Brands
and
businesses,
the
best
ones,
are
no
different.
Michael
Hemsey,
President
Kobie
Marke=ng,
Inc.
FROM OUR PRESIDENT
www.kobie.com
3

5. 10% Of real-time data is
actually being utilized
$$
The New Customer ConnectionThe New Customer Conn
big databig data
OMNICHANNEL LOYALTYOMNICHANNEL LOYALOMNICHANNEL LOYALTY
p.o.s. tweets likes surveysemailwebsites blogsforums purchases
Big Data refers to the constant incoming information so
large it surpasses what typical storage tools can handle. A
recent IBM study showed that only about 10% of real-time
data being collected is being used effectively by businesses!
$$ $$
$$ $$
$$
$$
$$
$$
$$
$$
Omnichannel loyalty (OCL) is an enterprise-level initiative to drive, track, measure and reward
incremental behavior throughout the enterprise and customer experience.
With omnichannel loyalty, traditional loyalty attrition is reduced, as brand advocates play
an enhanced role across the customer lifecycle. Consumers become empowered through
a mix of compelling and coordinated cross-channel engagements, as well as truly
personalized messaging that delivers more meaningful and relevant brand interactions, and the
right reward for the “right” behaviors along the way. The result when executed with precision is a
true impact on customer lifetime value (LTV) – the ultimate loyalty metric.
$$
$$
$$
$$
$$
$$
90%
Of Big Data becomes
missed opportunities
4
Lines
are
becoming
blurred
between
marke=ng
channels
and
media
in
a
way
that
has
a
huge
impact
on
how
customers’
want
to
experience
your
brand.
Omnichannel
Loyalty
is
the
key
to
bringing
this
all
together.
With
Omnichannel
Loyalty,
you
can
reach
your
loyal
customers
across
all
plaYorms,
mediums,
and
channels
in
a
more
efficient
and
aligned
manner
allowing
you
to
track
data
be[er
than
ever
and
ensure
the
most
meaningful
customer
experience
and
engagement.
One
size
fits
all
is
over.
SCAN ME!
FOR THE FULL
INFOGRAPHIC
OMNICHANNEL LOYALTY FRAMED

6. Summing
up
loyalty
comes
down
to
experiences:
posi=ve
experiences
engendering
decades
of
loyalty
and
nega=ve
ones
that
take
longer
to
subside.
But
let’s
focus
on
the
posi=ve
with
two
anecdotes.
On
Valen=ne’s
Day,
my
wife’s
friend
received
a
handwri[en
note
from
a
sales
associate
at
Neiman
Marcus,
thanking
her
for
a
Tom
Ford
perfume
purchase
while
sugges=ng
two
new
fragrances
from
the
same
line,
samples
included.
“Dear
XXX,
I
know
that
the
Italian
Cypress
must
s8ll
be
exci8ng
your
senses,”
the
card
began.
“Based
on
what
we
discussed
last
8me
you
were
here
I
put
together
a
couple
of
samples
of
what
I
thought
you
might
like.”
In
an
age
of
impersonal
emails
and
untargeted
offers,
personal
messaging
made
my
wife’s
friend
feel
valued.
It’s
great
to
see
handwri[en
notes
and
unexpected
samples
have
not
been
forgo[en.
Clearly,
the
Neiman
Marcus
salesman
recorded
customer
preferences
into
a
CRM
program
and
turned
data
into
ac=on.
Then
there's
my
own
experience
with
Uber,
a
two-­‐year-­‐old
app.
Uber
pinpoints
your
loca=on,
or
you
enter
a
pickup
address,
and
it
allows
you
to
select
private
taxis,
limos
or
SUVs
without
the
hassle
of
finding
a
cab
or
doing
the
“New
York
wave.”
The
app
links
your
credit
card
to
each
payment
and
eliminates
card
swipes
and
clones
while
accruing
points
on
various
loyalty
programs.
Chase
Sapphire
Preferred
awards
2.14
points
per
dollar
spent
and
car
services
count
as
travel
expenses.
Here,
too,
the
experience
concluded
with
a
Thank
You
email.
"Hi
Michael,
we
hope
you
enjoyed
your
first
ride
with
Uber!”
it
read.
“Below
is
your
custom
Uber
invite
link.
Each
friend
that
signs
up
with
your
link
will
receive
$10
off
their
first
Uber
ride.
And,
for
each
of
your
friends
that
takes
a
ride,
we'll
drop
$10
Uber
credits
on
your
account."
“Summing up loyalty comes
down to experiences: positive
experiences engendering
decades of loyalty and negative
ones that take longer to
subside”
WHEN IT COMES TO LOYALTY,
EXPERIENCE IS EVERYTHING
By Michael Hemsey
5

7. The
Science
Behind
Loyalty
These
examples
work
because,
as
Forrester
Research
pointed
out
in
a
2012
study,
consumers
reward
brands
that
“make
them
feel
special”
and
will
pay
more
for
that
service.
American
Express,
for
instance,
scored
37%
higher
than
MasterCard
on
delivering
special
experiences
and
enjoyed
18%
higher
pricing
power
as
a
result.
Part
of
that
experience
means:
brands
empowering
frequent
users
to
promote
products
via
social
media
and
tradi=onal
outlets,
good
corporate
ci=zenship
and
becoming
an
“invaluable
resource”
–
or
a
brand
that
consumers
feel
they
can’t
do
without.
None
of
these
findings
directly
link
to
specific
loyalty
programs.
It’s
the
li[le
things
— the
subtle
corporate
signals
that
inform
customers
that
their
experience,
managed
across
all
channels,
is
tops.
For
brands,
mee=ng
consumer
experience
expecta=ons
has
a
prac=cal
marke=ng
purpose,
and
is
only
the
beginning.
Delivering
quality
experiences:
• Is
how
brands
dis=nguish
themselves
in
compe==ve
markets.
For
instance,
global
ad
spending
was
up
4.3%
in
the
third
quarter
of
2012,
to
$139
billion.
Samsung,
Microsop
and
Apple
shelled
out
$3
billion,
$1.9
billion
and
$933
million,
respec=vely,
in
adver=sing
in
2011,
as
each
wrestled
for
dominance.
With
this
kind
of
rivalry
common,
experiences
set
brands
apart.
• Equals
emo=onal
connec=ons
that
drive
product
loyalty
—
a
vital
omnichannel
component
as
marketers
promote
brands
across
mul=ple
channels.
The
17th
Annual
Brand
Keys
Customer
Loyalty
Engagement
Index
found
that
emo=onal
engagement
trumps
promo=ons
and
discoun=ng
in
consumer
importance.
So
when
Hyundai
=es
for
the
number
one
spot
in
the
automo=ve
subcategory
of
the
loyalty
index,
something
is
right.
• Ensures
the
rise
of
brand
ambassadors.
Emo=onal
connec=ons
inspire
people
to
discuss
their
posi=ve
experiences.
And
despite
brand-­‐fickle
and
loyalty-­‐suspect
consumers,
commi[ed
fans
drive
further
brand
buzz,
resul=ng
in
higher
profits
and
ROI.
Loyalty
Management
Goes
A
Long
Way
Too
When
discussing
customer
experience
importance,
back-­‐end
loyalty
legwork
is
also
key
—
the
convergence
of
management
styles
uni=ng
tradi=onal
loyalty
program
metrics
and
customer
rela=onship
management
(CRM)
under
one
roof.
For
Neiman
Marcus,
imagine
customer
insights
volume
if
in-­‐store
experiences
(and
the
informa=on
used
craping
the
note)
were
augmented
with
loyalty
program
data.
I
suspect
far
more
customer-­‐specific
notes
could
be
wri[en.
Merging
CRM
and
loyalty
helps
realize
experience-­‐driven
outcomes,
increases
brand
efficiency
and
corrects
downstream
errors.
Experience
is
everything.
Yet
what
experiences
inspire
loyalty
remains
fluid.
Keeping
these
observa=ons
in
mind
will
not
guarantee
brand
success,
but
it
will
improve
loyalty
odds.
And
combining
tradi=onal
outreach
with
CRM
might
be
the
best
loyalty
solu=on
yet.
“When discussing customer
experience importance, back-
end loyalty legwork is also key
— the convergence of
management styles uniting
traditional loyalty program
metrics and customer
relationship management
(CRM) under one roof.”
6
GET AMPED!
A revolutionary new loyalty marketing platform is coming.
Find out more info@kobie.com

8. Ask
marketers
or
loyalty
marke=ng
service
providers
(L-­‐
MSPs)
what
the
common
2013
theme
is
and
they’ll
tell
you
“convergence”
–
just
like
2012.
But
what
type
of
convergence
do
I
mean?
There
are
two
types,
one
unfolding
in
response
to
the
other.
Last
year,
marketers
anxiously
sought
the
implica=ons
of
channel
convergence
capitalizing
on
many
touch
points:
smartphones,
tablets,
TV,
email
and
social
media.
The
upside
to
convergence
and
channel
prolifera=on
was
copious
customer
data.
Everything
from
shopping
habits
and
loca=on
to
loyalty-­‐program
status
can
be
tracked
across
mul=ple
channels.
One
challenge
for
marketers
and
L-­‐MSPs
comes
down
to
managing
the
data
deluge:
how
to
turn
data
into
ac=onable
insight
that
drives
ROI.
Tradi=onally
some
of
this
data
were
organized
through
CRM
sopware.
But
thanks
to
informa=on
inunda=on,
corporate
structures
developed
siloed
management
styles,
making
internal
communica=ons
difficult.
Now,
experien=al
metrics
gathered
from
loyalty
programs
plus
CRM
sopware
are
yielding
new
types
of
customer
experience
management,
or
CEM.
It’s
a
vital
convergence
helping
prove
loyalty’s
worth.
Even
so,
Temkin
Group’s
2012
report
finds
that
while
59%
of
respondents
plan
to
help
their
companies
become
CEM
leaders
in
the
next
three
years,
only
7%
of
North
American
companies
have
a
strong
grasp
of
CEM.
CREATING OPTIMIZED CUSTOMER
EXPERIENCES
By Bram Hechtkopf
“Experiential metrics gathered
from loyalty programs plus CRM
software are yielding new types
of customer experience
management, or CEM. It’s a vital
convergence helping prove
loyalty’s worth.”
- Bram Hechtkopf
7

9. Clearly,
there’s
more
to
do.
Loyalty
and
CRM
Converge
Crea<ng
Customer
Experience
Management
Like
omnichannel
loyalty,
a
loyalty
program’s
integra=on
with
CRM
and
CEM
must
start
at
the
highest
levels.
C-­‐Level
execu=ves
must
be
on
board
and
so
must
subordinates.
Only
then
can
CRM
–
what
Forrester
Research
calls
“the
right
metrics
to
track
success
and
prompt
correc=ve
ac=on”
–
be
used
to
give
more
of
what
customers
seek
at
the
right
=me.
As
with
channel
convergence,
CRM
and
loyalty
convergence
are
about
the
coming
together
of
data,
people,
process
and
technology
–
real-­‐=me
responses,
tracking
and
rewarding
customers
for
their
ac=ons
in-­‐store
or
online.
Of
course,
arbitrarily
rewarding
members
for
ac=ons
they
would
have
already
taken
via
social
media
is
foolish.
It’s
even
worse
if
the
social
channel
in
ques=on
isn’t
directly
driving
purchasing
behavior.
Yet
technology
that
manages
CRM,
CEM
and
loyalty
ensures
repeat
business,
improved
ROI
and
upselling
opportuni=es.
This
is
what
Bob
Thompson,
CEO
of
CustomerThink
Corp.,
calls
“lep
brain”
and
“right
brain”
teamwork.
CRM,
he
argues,
concerns
a
customer’s
value
to
a
given
enterprise.
It’s
about
systems
and
transac=ons
and
“func=onal
value,”
or
lep
brain.
CEM
is
about
the
enterprise’s
value
to
customers
and
concerns
people
and
interac=ons.
Here,
customer
“emo=onal
value”
–
right-­‐brain
thinking
–
is
priority
one.
But,
as
with
our
brains,
there
is
constant
sharing
of
data,
maximizing
problem
solving.
Loyalty
marketers
have
access
to
a
host
of
data
points
(travel
preferences,
frequently
visited
des=na=ons,
average
purchase
prices,
types
of
purchases,
purchase
loca=on,
customer
gender,
etc.,)
that
provide
valuable
insight.
The
convergence
with
CRM
allows
marketers
to
improve
CEM
through
that
insight.
Ul=mately,
consumers
will
demand
such
coordina=on
in
order
to
seamlessly
enjoy
the
mul=ple
channels
they
already
use.
Rediscovering
the
‘R’
in
CRM
While
the
‘E’
in
CEM
Evolves
The
above
subhead
is
a
nod
to
the
=tle
of
a
recent
Forbes
ar=cle
that
drives
home
the
essence
of
CRM
and
CEM
convergence
and
what
Forrester
calls
the
“age
of
agile
commerce.”
Whether
it’s
CEM
or
CRM
and
loyalty
management
programs,
converging
management
approaches
come
down
to
brands
driving
quality
rela=onships
with
customers
and
mee=ng
customer
expecta=ons
through
smart,
=mely
campaigns
and
op=mized
opera=ons.
It’s
about
taking
the
wealth
of
metrics
now
accumulated,
turning
that
informa=on
into
genuine
experiences
that
people
enjoy
and
managing
that
data
under
one
roof.
Think
of
management
convergence
in
terms
of
the
five
Es:
enterprise
(C-­‐
level
buy-­‐in),
economics
(your
converged
CRM/
Loyalty
management
system
yielding
tangible
economic
benefits),
experience
(do
your
sales
and
IT
teams
have
the
tools
and
training
needed
to
manage,
measure
and
track
an
omnichannel
and
CRM-­‐
CEM-­‐loyalty
framework?),
engagement
(is
your
data
aligned
with
your
messaging
and
branding?
What
is
your
level
of
data
accuracy
or
“hygiene?”),
and
execu=on,
or
actually
geung
the
job
done,
demonstra=ng
a
genuine
customer
connec=on
through
improved
ROI,
repeat
business
and
posi=ve
feedback.
Just
as
CRM
and
loyalty
convergence
discussions
begin
with
real
people
in
real
boardrooms,
real
salespeople–
“customer
advocates”
–
remain
vital
to
the
downstream
process,
humanizing
brand
interac=on.
Customers
are
a
business’s
most
valuable
asset
and
loyalty
ini=a=ves
are
the
best
way
to
drive
brand
allegiance.
Only
with
a
CRM
and
loyalty
management
system
working
together
seamlessly
will
the
best
customer
experience
emerge.
“As with channel
convergence, CRM
and loyalty
convergence are
about the coming
together of data,
people, process and
technology –
real-time responses,
tracking and
rewarding customers
for their actions in-
store or online.”
- Bram Hechtkopf
8

10. MOVING FROM
TRANSACTIONAL
TO EMOTIONAL
LOYALTY
By Bram Hechtkopf
A
Forrester
Report
and
CMS
Wire
cri=que
earlier
this
year
reiterated
a
point
which
Kobie
has
endorsed
for
quite
some
=me
in
our
efforts
to
educate
clients
and
the
loyalty
industry.
There
is
compelling
evidence
sugges=ng
that
consumers
increasingly
expect
an
enhanced
brand
experience,
one
that
takes
loyalty
beyond
the
points-­‐for-­‐
rewards
stereotype,
delivering
on
emo=onal
experiences
as
much
as
any
tangible
reward.
Despite
this,
brands
con=nue
to
play
catch
up.
They’re
stuck
in
what
we
and
Forrester
call
“loyalty
1.0.”
While
generally
an
objec=ve
review
of
the
data
at
hand
and
Forrester’s
handling
of
it,
the
ar=cle
raises
two
important
ques=ons
–
ques=ons
that
require
serious
thought.
Con8nued
on
page
11
FIVE THINGS
YOUR
RETAIL
CUSTOMERS
EXPECT
THIS YEAR
By Michael Hemsey
For
Toys
“R”
Us,
this
year
has
been
a
troubled
one.
The
global
retailer’s
CEO,
Gerald
Storch,
stepped
down
aper
the
company
failed
to
hit
revenue
targets
and
had
lackluster
same
store
and
overall
store
sales
during
the
2012
holiday
season.
While
Toys
“R”
Us’
recent
miss
stems
from
heightened
discount
compe==on,
some
of
the
company’s
shortcomings
might
be
internal
too
–
hyper-­‐reliance
on
excessive
discounts.
Discounts,
as
we
have
seen,
can
do
a
lot
of
damage.
But
at
least
there’s
a
lesson
to
be
learned
by
other
retailers.
Despite
Storch
being
credited
for
heralding
an
omnichannel
strategy
at
Toys
“R”
Us,
relying
heavily
on
in-­‐store
and
merchandising
across
mul=ple
channels,
increasingly
consumers
are
striving
for
quality
brand
experiences
as
much
as
they
seek
quality
prices.
And
with
experiences
being
central
to
customer
engagement
and
loyalty,
here
are
five
things
that
retail
customers
can
expect
more:
#1.
The
con<nued
rise
of
corporate
philanthropy
and
brand
social
awareness:
Panera
Bread
is
a
good
example.
While
the
brand
is
spending
some
$70
million
on
its
“Live
Consciously”
campaign
through
mul=ple
channels,
its
Panera
Bread
Founda=on
established
Panera
Cares
Cafés.
These
are
places
offering
variable
pricing
based
on
customers’
ability
to
pay,
if
at
all.
Instances
like
this
support
recent
eMarketer
data
which
finds
56%
of
US
Internet
users
have
purchased
a
product
based
on
a
brand’s
cause
allegiances.
Con8nued
on
next
page
“56% of US Internet
users have
purchased a product
based on a brand’s
cause allegiances”
- eMarketer
“Consumers increasingly expect an
enhanced brand experience, one that takes
loyalty beyond the points-for-rewards
stereotype, delivering on emotional
experiences as much as any tangible
reward.” - Bram Hechtkopf
9

11. Con8nued
from
previous
page
top...
#2.
An
increase
in
loyalty
program
transparency,
where
fewer
hoops
means
happier
customers:
It
should
be
obvious
–
shoppers
want
the
most
bang
for
their
loyalty
buck.
Consider
gas
sta=ons.
Most
gas
sta=on
loyalty
programs
link
their
rewards
to
convenience
store
purchases.
But
Bri=sh
Petroleum
is
changing
that
with
its
BP
Driver
Rewards
program.
Star=ng
in
April
2013,
BP
will
launch
a
new
loyalty
program
where
consumers
earn
5
cents
off
every
gallon
of
gas
they
pump,
aper
the
first
20
gallons.
Consumers
will
see
direct
savings
for
buying
something
they
already
need:
fuel.
Similarly,
Winn
Dixie’s
Fuelperks
program
earns
users
5
cents
off
per
gallon
pumped
at
Shell
sta=ons
for
every
$50
they
spend
on
groceries.
Simple,
honest
and
direct
loyalty
programs
mean
business
and
retailers
are
eager
to
jump
on
board.
#3.
Customer
engagement
that
uses
21st
century
Big
Data
metrics
to
drive
tradi<onal
outreach:
Or
as
Claud
Cecil
Gurney,
founder
of
design
firm
de
Gournay,
describes
a
consumer
purchase:
“[Feeling]
like
something
they’ve
created
for
themselves
rather
than
something
that’s
been
bought
off
a
shelf
and
stuck
in
their
house.”
Accomplishing
that
genuineness
requires
constant
engagement
across
all
channels.
It
also
requires
ac=ng
on
gathered
data
which
is
a
central
tenet
of
the
omnichannel
loyalty
experience.
#4.
The
improved
organiza<on
and
de-­‐siloing
of
Big
Data:
This
one’s
a
no-­‐brainer
but
it
bears
repea=ng.
A
Forbes
ar=cle
discusses
how
brands
should
opt
for
a
single
“golden
version”
of
customer
data
and
maximize
engagement
by
taking
a
holis=c
view
of
the
customer.
To
me,
this
sounds
a
lot
like
convergence
and
the
need
to
bring
loyalty
data
and
tradi=onal
CRM
data
under
one
de-­‐siloed
roof.
Forbes
refers
to
it
as
“master
data
management.”
Whatever
you
call
it,
convergence
is
key.
The
good
news
is
that,
according
to
a
2012
Retail
Horizons
report,
nearly
67%
of
retailers
surveyed
ranked
customer
sa=sfac=on
as
their
top
strategic
ini=a=ve
for
2012.
Another
82%
said
customer
service
strategies
would
be
top
priority,
up
from
75%
the
year
before.
If
that
was
the
sen=ment
in
2012,
you
can
be
sure
2013
will
be
just
as
intense.
#5.
Growth
of
alterna<ve
forms
of
payment:
We’ve
wri[en
about
the
increasing
popularity
of
mobile
wallets
and
the
brand
possibili=es
that
come
with
Apple’s
Passbook
app.
But
here’s
another
take.
Walmart
is
expanding
use
of
its
iPhone
“Scan
&
Go”
app
to
40
Denver,
Co.
stores.
The
app
allows
customers
to
scan
products
while
they’re
shopping.
When
they’re
done,
the
app
organizes
purchases
under
a
single
QR
code
that
can
be
read
by
QR-­‐
equipped
readers
at
checkout.
Think
of
Apple
stores,
where
salespeople
are
on
hand
to
scan
products
throughout
the
store.
There’s
no
checkout
line.
Walmart’s
experiment
is
proving
similarly
effec=ve
in
streamlining
the
in-­‐store
shopping
and
checkout
process.
And
if
Walmart’s
doing
it,
others
will
follow.
But
as
Toys
“R”
Us
con=nues
its
search
for
a
CEO,
it
would
be
wise
for
it
–
and
other
retailers
–
to
keep
these
five
customer
expecta=ons
in
mind.
An
omnichannel
approach
is
great
and
compe==ve
prices
are
too.
But
that’s
just
the
first
step
toward
enhancing
loyalty
and
driving
ROI.
Enhanced
social
good,
loyalty
program
transparency,
Big
Data
and
the
use
of
its
metrics
in
a
de-­‐siloed
data
environment,
and
one
that
relies
on
innova=ve
payment
methods
are
increasingly
vital
components
to
include
in
the
loyalty
mix.
“Accomplishing that
genuineness requires
constant engagement across
all channels. It also requires
acting on gathered data
which is a central tenet of
the omnichannel loyalty
experience.”
10

12. Con8nued
from
page
9
boUom
1. Why
isn’t
a
customer
who
uses
a
discount
coupon
engaged
with
the
brand,
since
the
purchase
experience
might
result
in
a
product
or
service
so
terrific
that
the
customer
is
sold
for
life?
2. How
is
emo=onal
loyalty
to
a
brand
different
from
becoming
a
brand
advocate
—
and,
if
it’s
the
same,
why
single
out
loyalty
programs
for
that
challenge
when
other
marke=ng
efforts
might
be
needed,
such
as
proac=ve
customer
service?
“Dis”
loyalty
Cards
Versus
the
Need
for
Experience
The
fact
that
the
first
ques=on
needs
to
be
raised
underscores
in
part
why
companies
remain
at
loyalty
1.0.
Consumers
want
to
know
whether
or
not
they’re
being
offered
“just
another
discount”
(hence,
the
rewards
stereotype)
or
if
they
are
being
provided
relevant
offers.
Relevant
and
=mely
offers
are
the
beginning
of
an
emo=onal
brand
connec=on.
That’s
because
there’s
recogni=on
on
the
part
of
the
consumer
that
craping
that
relevant
offer
required
detailed
customer
knowledge
–
not
something
gleaned
from
email
spam.
In
other
words,
the
challenge
for
marketers
is
answering
the
following
ques=ons:
• How
well
do
we
know
our
customers?
• Do
we
know
what
offers,
customer
experience
and
engagement
techniques
will
drive
customer
life=me
value
and
incremental
behaviors?
• What
strategy
and
loyalty
tac=cs
make
the
most
sense
and,
just
as
important
as,
how
long
will
it
take
our
brand
to
reach
next-­‐level
loyalty
engagement?
• Finally,
do
we
have
the
metrics
in
place
to
measure
these
outcomes?
Emo<onal
Loyalty
Yielding
Brand
Advocacy
As
for
the
second
ques=on
above,
there
are
obvious
connec=ons
between
emo=onal
loyalty
and
becoming
a
brand
advocate.
I
would
argue
it’s
best
to
describe
one
folding
into
the
next.
Emo=onal
loyalty
is
about
the
brand
connec=ng
with
the
consumer,
making
the
customer
feel
good
about
their
purchase
and
experience,
crea=ng
opportuni=es
for
the
customer
to
return
and
experience
“more
and
be[er”
over
=me.
Customer
service
is
important
too,
as
is
social
media.
In
today’s
tech-­‐centric
world,
consumers
appreciate
genuine
engagement
via
conversa=on.
For
instance,
sop-­‐selling
loyalty
could
be
a
hotel
manager
discovering
that
one
of
their
frequent
guest
couples
a[ends
annual
local
wine
fes=vals.
Rather
than
bombarding
this
couple
with
two-­‐dimensional
email
message,
the
hotel
instead
sends
SMS
messages,
push
no=fica=ons
or
Facebook
posts
related
to
the
fes=val
(and
not
the
rewards)
to
inspire
a
stay.
In
another
concrete
example,
Burberry’s
new
London
store
features
a
22p
digital
screen,
500
speakers
and
RFID
chips
in
certain
clothes
that,
when
worn
in
front
of
the
screen,
show
wearers
a
virtual
catwalk.
While
less
conversa=on-­‐specific,
technology-­‐driven
loyalty
is
also
at
the
heart
of
the
new
engagement.
Only
aper
these
connec=ons
have
been
established
can
marketers
expect
true
brand
ambassador
engagement
–
consumers
willing
to
promote
a
given
brand
as
much
out
of
rewards
expecta=on
as
they
are
mo=vated
to
support
a
brand
they
believe
genuinely
connects
with
them.
Regardless,
achieving
both
kinds
of
loyalty,
experience
and
rewards-­‐driven
(because
loyalty
1.0
is
s=ll
very
important),
requires
engagement
throughout
the
customer
lifecycle
and
through
all
touch
points
–
the
central
tenet
of
an
omnichannel
loyalty
focus.
Defined
as
an
enterprise-­‐level
ini=a=ve
to
drive,
track,
measure
and
reward
incremental
behavior
throughout
the
enterprise
and
customer
experience.
The
result
is
personalized
messaging
that
delivers
more
meaningful
and
relevant
brand
interac=ons
and
the
right
rewards
for
the
“right”
behaviors
along
the
way.
This
results
in
a
true
impact
on
customer
life=me
value
(LTV)
–
the
ul=mate
loyalty
metric.
As
has
been
rightly
pointed
out,
emo=onally-­‐driven
loyalty
2.0
remains
a
struggle.
But
perhaps
answering
the
above
ques=ons
will
help
illuminate
steps
brands
can
take
to
get
the
job
done
faster.
What
addi=onal
steps
can
brands
take
to
turn
transac=onal
loyalty
into
emo=onal
loyalty
and
where
else
are
they
falling
short?
To
add
your
comments,
visit
the
Kobie
blog
at
www.blog.kobie.com.
11

13. Just
when
it
seems
that
an
economic
spring
has
arrived
–
stocks
are
up
and
unemployment
con=nues
to
fall
–
we’re
treated
to
a
blizzard
of
hard-­‐to-­‐stomach
restaurant
industry
sta=s=cs.
According
to
a
recent
Knapp-­‐Track
Index
of
monthly
restaurant
sales,
casual
restaurant
sales
fell
5.4%
in
February,
.6%
in
January
and
1.6%
in
December.
This
was
the
first
consecu=ve
three-­‐month
drop
in
nearly
three
years.
While
some
of
those
declines
might
reflect
winter
doldrums,
when
more
people
stay
home,
it
might
also
signal
=ght
consumer
spending
and
the
specter
of
renewed
economic
troubles.
Faced
with
these
uncertain=es,
restaurant
loyalty
programs
are
more
valuable
than
ever
in
a[rac=ng,
engaging
and
retaining
patrons.
It’s
not
so
much
that
diners
require
coaxing
via
points-­‐for-­‐rewards
gimmicks.
Rather,
as
much
as
diners
crave
a
great
meal
and
great
service,
they
seek
loyalty
programs
that
are
accessible
on
their
preferred
channels,
offer
meaningful
rewards
and
enhance
their
overall
experience
with
the
restaurant.
To
that
end,
I’ve
listed
four
sugges=ons
that
can
help
restaurants
nourish
their
loyalty
programs
and
be[er
feed
restaurant
goers’
desires
to
enjoy
fun
rewards.
Number
1:
Rewards
need
to
be…
well…
rewarding
–
That’s
a
line
borrowed
from
Cynthia
Boris’
Marke=ng
Pilgrim
blog.
With
data
showing
that
58%
of
loyalty
program
members
prefer
to
dine
at
eateries
with
a
rewards
program,
there
are
strong
indica=ons
that
if
restaurants
improved
their
offerings,
more
members
would
join.
That’s
true
even
if
the
same
study
reveals
only
36%
of
respondents
are
members
of
a
given
program.
“58% of loyalty program
members prefer to dine at
eateries with a rewards
program; there are strong
indications that if restaurants
improved their offerings, more
members would join.”
FOUR THINGS YOUR RESTAURANT
LOYALTY PROGRAM SHOULD BE
DOING TO EMPOWER CUSTOMER
ENGAGEMENTBy Marc Glazer
12

14. Too
many
restaurants
make
their
loyalty
program
members
jump
through
too
many
hoops
to
earn
a
reward
or
don’t
offer
rewards
commensurate
to
customers’
outlays:
no
one’s
going
to
eat
at
a
restaurant
full
price
10
=mes
just
to
earn
a
free
T-­‐shirt.
But
consider
BJ’s
Restaurant
and
Brewhouse’s
Premier
Rewards
loyalty
program,
which
offers
rewards
including
a
5-­‐course
dinner
valued
at
$30
per
person.
They
also
offer
the
chance
to
purchase
items
via
points
at
auc=on.
The
latest
offer:
a
Guinness-­‐sponsored
mountain
bike.
Number
2:
Get
Your
Game
on
–
Ea=ng
out,
even
if
it’s
just
for
dessert,
is
supposed
to
be
fun.
And
it
isn’t
only
children,
tweens,
teens
and
20-­‐somethings
playing
video
games
(the
average
gamer
is
more
like
30+).
So
why
not
add
gamifica=on
to
your
program
and
link
virtual
points
to
real-­‐world
rewards
as
an
added
endorphin
rush?
Take
Rita’s
Italian
Ice,
the
Italian
ices
chain.
Recently
the
brand
created
a
new
loyalty
program,
Rita’s
Rewards.
Timed
to
coincide
with
the
first
day
of
spring,
the
Rita’s
Rewards
app
lets
users
share
their
Rita’s
experiences
via
Facebook,
write
reviews
and
earn
points
toward
free
Italian
ices.
In
May
the
app
will
expand
to
include
a
Rita’s
Italian
Ice
Factory
game.
While
details
are
unknown,
the
game’s
working
=tle
suggests
users
will
be
able
to
create
their
own
virtual
flavors
and
dream
up
their
own
concoc=ons,
earning
addi=onal
points
along
the
way.
With
chain
restaurants
like
the
Cheesecake
Factory
specializing
in
dessert
offerings,
similar
sweet
tooth
incen=ves
could
apply
here
too.
Number
3:
Serving
up
SoLoMo
Hot
or
Cold
–
Central
to
gaming’s
popularity
are
its
communal
and
social
applica=ons.
SoLoMo
refers
to
the
connec=on
of
social
media
and
local
or
proximity-­‐based
adver=sing
through
smart
mobile
devices.
Smartphone
and
tablet
adop=on
rates
hover
near
55%
and
30%,
respec=vely,
and
digital
signage
costs
con=nue
to
fall.
For
restaurants,
this
means
the
=me
for
new
levels
of
patron
engagement
is
now.
Third-­‐party
“social
apps”
are
helping
restaurants
be[er
achieve
this
goal
by
allowing
customers
to
share
their
dining
experiences
with
their
networks.
Open
Table,
a
San
Francisco-­‐based
company,
connects
diners
via
Facebook
and
allows
users
to
make
mobile
reserva=ons.
Beginning
in
February,
the
Places
I’ve
Eaten
Facebook
app
will
let
users
view
their
friends’
restaurant
preferences
–
where
they
ate,
what
they
ordered
and
descrip=ons
of
their
general
experience.
While
it’s
not
strictly
a
loyalty
program,
restaurants
could
easily
add
a
=ered
loyalty
structure
to
an
in-­‐
house
Open
Table-­‐like
app,
incen=vizing
visits.
Number
4:
Don’t
Get
Aggravated,
Aggregate
–
Not
only
do
rewards
need
to
be
rewarding,
the
earning
process
needs
to
be
seamless
and
efficient.
One
way
to
achieve
this
is
through
points
aggrega=on.
While
the
average
American
household
is
a
member
of
18
loyalty
programs
—
the
restaurant
industry
alone
claims
9.7
million
members
–
a
third
of
all
loyalty
dollar
value,
$16
billion,
goes
unredeemed
yearly.
Part
of
that
disconnect
stems
from
the
clu[ered
nature
of
exis=ng
loyalty
currencies.
However,
Chicago
startup
Belly
is
working
to
change
that.
The
loyalty
currency
aggregator
allows
members
to
use
and
share
the
same
points
across
small
businesses
that
include
restaurants,
while
benefi=ng
from
social
media
and
the
metrics
gathered
from
the
experience.
In
February,
Belly
announced
that
it
boasted
over
1
million
loyalty
members,
had
4,500
businesses
signed
up
and
planned
to
hire
150
more
employees
this
year.
Plink,
another
burgeoning
loyalty
aggregator
that
includes
retail,
restaurants
and
the
American
Red
Cross,
recently
announced
that
it
had
surpassed
50,000
offline
loca=ons
to
earn
rewards.
The
restaurant
industry
may
have
a
bit
further
to
go
in
realizing
its
own
economic
spring.
But
adop=ng
these
four
guidelines
will
help
encourage
new
levels
of
patron
engagement,
increased
revenue
and
a
chance
for
your
eatery
to
help
break
this
recent
three-­‐month
sales
slump.
13

15. WOULD YOU ASK A MECHANIC TO
PERFORM OPEN HEART SURGERY?
PUT YOUR PROGRAM BACK IN THE
HANDS OF THE LOYALTY EXPERTS
Kobie is the secret. Reach your customers at
every touchpoint with omnichannel loyalty.
Scan the QR code or go to kobie.com/GRMA.

16. Coupon
king
Myron
Ullman
is
back
in
the
spotlight
trying
to
save
J.C.
Penney
from
itself.
But
can
he
succeed?
That’s
the
$1
billion
ques=on
being
asked
by
media
and
retail
industry
experts.
It’s
also
how
much
J.C.
Penney
lost
last
year
when
so
many
of
its
customers
took
their
loyalty
elsewhere
aper
the
retailer
phased
out
the
coupons
shoppers
had
come
to
love
and,
more
importantly,
expect.
As
part
of
its
turnaround,
pundits
argue,
JCP
needs
to
return
to
basics:
no
more
costly
store
redesigns,
fewer
in-­‐store
bou=ques
and
a
complete
restora=on
of
the
retailer’s
daily
discounts.
Judging
from
its
latest
ad,
JCP
recognizes
its
errors,
admits
its
mistakes
and
says:
“we
learned
a
very
simple
thing,
to
listen
to
you.”
I
think
what
the
retailer
is
also
trying
to
say
is:
“we’re
sorry.”
At
Kobie,
we’d
recommend
not
geung
stuck
in
that
kind
of
discount
dilemma
to
begin
with.
Stereotypical
points-­‐
for-­‐rewards
programs
and
coupon-­‐condi=oning
aren’t
what
inspires
true
brand
loyalty.
They
simply
inspire
behavioral
condi=oning
based
on
cost,
not
brand
a[ributes
–
and
it’s
very
difficult
to
build
a
sustainable
loyalty
program
based
on
offering
the
lowest
price
alone.
And
at
the
2013
GRMA
Leadership
Forum,
a
high-­‐
level
gathering
of
retail
execu=ves
and
industry
influencers
which
took
place
in
Kobie’s
home
city
of
St.
Petersburg,
many
shared
that
sen=ment.
JCP AND THE BILLION-DOLLAR
QUESTION
By Bram Hechtkopf
“Stereotypical points-for-rewards
programs and coupon-
conditioning aren’t what inspires
true brand loyalty. They simply
inspire behavioral conditioning
based on cost, not brand
attributes – and it’s very difficult
to build a sustainable loyalty
program based on offering the
lowest price alone.”
- Bram Hechtkopf
15

17. The
Response
to
Coupon
Condi<oning
Let’s
say
you
are
a
retailer
who
offers
daily
deals
or
coupons
as
part
of
your
corporate
culture.
What
do
you
do
then?
Does
that
contradict
our
typical
customer
reward
program
recommenda=ons?
In
light
of
a
recent
2013
Coupon
Trend
Report
which
showed
a
14%
drop
in
the
US
coupon
redemp=on
rate
for
2012,
can
J.C.
really
win
back
its
formerly
loyal
customers
this
way,
one
penny
at
a
=me?
Yes.
I
think
it
can
–
by
embracing
both
old
and
new
tac=cs.
That
means
returning
to
brand
experience
basics,
including
a
store
filled
with
discounts
and
deals.
But
it
also
means
the
use
of
omnichannel
marke=ng
and
loyalty
tac=cs
–
an
approach
which
growing
numbers
of
US
retailers
are
adop=ng.
Omnichannel
loyalty,
an
enterprise-­‐
level
ini=a=ve
to
drive,
track,
measure
and
reward
incremental
behavior
throughout
the
enterprise
and
customer
experience,
is
channel-­‐
agnos=c
and
delivers
true
customer
engagement.
So,
if
I
were
in
Myron
Ullman’s
shoes,
I
would
be:
• Launching
aggressive
campaign
outreach
across
mul=ple
channels,
asking
members
of
JCP’s
Rewards
program
which
discounts
they
would
like
restored
first
–
beyond
what’s
already
been
put
back.
• Making
in-­‐store
product
research
and
price
comparisons
easy
and
transparent.
• Puung
myself
in
the
shoes
of
your
customers.
Don’t
just
listen
to
my
customers.
Understand
what
it
means
to
“be”
them.
• Considering
QR
codes
or
at
least
using
image-­‐
recogni=on
technologies
like
Google
Goggles,
a
standard
feature
on
the
mobile
search
engine.
• Improving
the
brand’s
mobile
interface
and
online
buying
experience.
• Becoming
Amazon-­‐aware
and
bea=ng
compe=tors
at
their
own
game,
improving
rewards
technology.
Almost
a
year
ago,
I
wrote
a
blog
called
The
Drug
of
Discounts:
Couponing
Addic=on
and
What
to
Do
About
It,
tepidly
endorsing
the
now
defunct
“Fair
and
Square”
pricing
ini=a=ve
and
praising
the
brand’s
a[empt
to
break
its
couponing
addic=on.
Rather
than
going
cold
turkey
though,
perhaps
JCP
should
have
explored
some
form
of
“coupon
replacement”
therapy
instead.
Retail
analyst
Robin
Lewis
calls
the
current
JCP
crisis
a
“saga”
and
“perhaps
the
most
colossal,
drama=c,
tragic,
transparent,
rapid
and
microscopically-­‐tracked
meltdown
in
the
history
of
retailing.”
Let’s
see
if
Ullman’s
approach
to
the
brand
and
to
rebuilding
customer
loyalty
can
prove
him
wrong.
Retail analyst Robin Lewis calls the
current JCP crisis a “saga” and
“perhaps the most colossal,
dramatic, tragic, transparent, rapid
and microscopically-tracked
meltdown in the history of retailing.”
Bram Hechtkopf
16

18. STARBUCKS AIMS
TO CREATE
LOYALTY FROM
ITS DISLOYAL
CUSTOMERS.
HUH?
By Pamela Sullins
It’s
rare
when
a
company
voluntarily
admits
it
could
do
something
be[er
–
especially
when
that
company
is
Starbucks.
With
a
record
$1
billion
placed
on
its
Starbucks
Cards
in
the
first
quarter
of
2013,
the
king
of
coffee
has
li[le
to
worry
about.
Which
is
why
Joe
LaCugna,
Starbucks’
director
of
analy=cs
and
business
intelligence,
may
have
surprised
a
few
people
when
he
revealed
what
Starbucks
is
doing
now:
catering
to
its
disloyal
customers.
Con8nued
on
page
19...
GENUINE
CUSTOMER
EXPERIENCE
IS BACK FOR
SECONDS
By Marc Glazer
Ask
the
technology
skep=cs
whether
they
think
technology
has
helped
or
hindered
interpersonal
communica=on,
and
invariably
they’ll
offer
muted
grumblings
like
“talk
much,
say
li[le,
connect
less.”
In
their
minds,
services
like
tex=ng,
Facebook
and
Twi[er
have
done
plenty
to
help
people
broadcast
what’s
on
their
minds
from
the
highest
mountain,
but
done
li[le
to
actually
facilitate
meaningful
communica=on.
In
other
words,
the
more
we
become
digitally
linked,
synced
and
wired,
the
less
we
establish
genuine
rela=onships.
They
do
have
a
point.
It
could
be
easy
to
agree
with
the
skep=cs
that
something
has
been
lost—that
something
has
been
lep
off
the
modern
menu
of
restaurant-­‐diner
rela=ons.
“Love
Can’t
Be
Automa<c”
Dining
remains
one
of
the
most
in=mate
and
important
human
experiences—a
celebra=on
of
good
food,
service,
style,
atmosphere
and,
of
course,
good
company.
When
you
think
about
it
driving
a
genuine
personal
experience
in
the
casual-­‐
dining
and
quick-­‐service
restaurant
space
shouldn’t
be
that
difficult.
The
experience
of
warmth
and
connectedness
is
as
memorable
when
the
waiter
brings
you
your
meal
as
it
is
when
the
friendly
drive-­‐
through
a[endant
asks
you
the
“light”
to
“sweet”
balance
in
your
coffee
rather
than
taking
the
order
on
faith.
That’s
the
way
to
drive
true
restaurant
loyalty
and
enhanced
revenue:
through
engagement.
Today,
technology
(in
the
form
of
smartphones,
tablets,
and
on-­‐the-­‐go
social
media
as
well
as
the
omnichannel
loyalty
and
CRM
programs
they
augment)
is
bringing
back
a
bit
of
that
dining
nostalgia—
and
finding
new
and
crea=ve
ways
to
mone=ze
it.
The
reality
is
that
people
have
changed
far
less
than
our
technology.
The
craving
for
a
genuine,
personal
dining
experience
remains
as
true
now
as
when
McDonalds
first
opened
its
doors
in
1955,
or
when
its
first
class
of
15
Hamburger
University
students
graduated
in
1961.
Con8nued
on
next
page...
“The reality is that
people have changed
far less than our
technology. The
craving for a genuine,
personal dining
experience remains
as true now as ever.”
- Marc Glazer
17

19. Con8nued
from
previous
page
top
...
The
disconnect
between
truly
“human”
customer
service
and
“just
geung
it
done”
customer
service
began
some
years
ago,
and
it
con=nues
to
accelerate
with
the
help
of
technology.
Yet
some
people
out
there
truly
“get
it,”
and
are
saying,
“Stop!”
Speaking
“at”
people
isn't
enough.
Case
in
point,
a
guy
who
gets
it:
Ramon
De
Leon,
a
former
Domino’s
Pizza
delivery
guy-turned-social
media
marke=ng
director
for
a
six-­‐
store
Domino's
franchise
in
Chicago.
“Love
can’t
be
automa=c,”
he
says.
It's
one
of
the
most
memorable
sentences
I've
heard
in
years.
He
said
it
passionately
at
the
RAMP
Advanced
Commerce
&
Mobile
Retail
Services
Summit
in
Chicago
last
year.
It
was
possibly
my
biggest
takeaway
from
three
days
spent
at
RAMP.
His
point
was
simple
and
elegant:
automa=c
tweets
and
Facebook
bots
that
try
to
a[ract,
retain,
and
engage
customers
can
only
get
a
restaurant
so
far—if
anywhere
at
all.
This
isn’t
a
new
concept
for
Ramon;
this
is
a
guy
who
back
in
1998
began
using
his
cell
phone
to
call
people
if
they
were
not
at
their
door
when
the
delivery
arrived.
By
building
that
level
of
personal
interest,
customers
soon
began
calling
him
directly
for
a
pizza
delivery.
Social
Media
Gets
Real
What’s
needed
is
a
return
to
a
genuine
one-­‐on-­‐one
personal
connec=on.
Learning
names.
Coaxing
people
into
a
smile.
Fostering
real
rela=onships.
Ramon
De
Leon
buys
the
idea—he
likes
to
impress
this
“truth”
on
his
employees,
encouraging
them
to
develop
similar
rela=onships.
He
calls
it
“the
nonstop
online
conversa=on.”
How
does
Domino's
start
this
conversa=on?
Simple.
Employees
are
encouraged
to
interact
with
their
customers
via
Facebook,
Twi[er
and
other
social
media
outlets.
Rather
than
hard-­‐selling
the
pizza,
the
interac=on
is
about
geung
to
know
the
customer—offering
deals
and
discounts
that
are
relevant
and
=mely.
Even
back
in
2010,
speaking
to
an
audience
at
WordofMouth.org’s
SuperGenius
Conference
in
New
York,
De
Leon
explained
that
90
percent
of
his
Twi[er
posts
had
nothing
to
do
with
pizza
per
se,
but
instead
were
genuine
reac=ons
and
comments
on
other
people’s
conversa=ons.
It’s
important
that
social
media
be
more
like
a
genuine
conversa=on
between
good
friends.
There
is
a
need
for
brutal
honesty
and
unparalleled
transparency.
Ex=nguishing
social
media
“fires”
(nega=ve
reviews)
with
social
media
“water”
(apologe=c
videos
admiung
mistakes)
is
as
important
as
addressing
a
“real-­‐world”
problem
like
a
mixed-­‐up
order.
Serving
and
Servicing
One
Customer
at
a
Time
Before
the
pizza
dough
rises,
other
restaurants
are
re-­‐engineering
their
social
media
efforts
too,
driving
newfound
loyalty
and
engagement
in
the
process.
Recently,
I
stumbled
upon
a
story
about
the
Blue
Heron,
a
small
“farm-­‐to-­‐table”
restaurant
nestled
in
the
Connec=cut
River
Valley
in
Sunderland,
Mass.,
co-­‐
owned
by
Deborah
Snow,
61,
and
her
partner.
Snow
knew
it
would
be
hard
to
convince
her
mostly
40-­‐
and
50-­‐something
diners
of
the
value
of
social
media.
Yet
she
has
found
Twi[er
to
be
an
excellent
way
to
keep
in
touch
with
regular
patrons
while
gaining
new
converts.
Rather
than
twee=ng
about
deals,
discounts,
and
the
latest
dishes,
she
tweets
food
recipes
and
even
food
poetry.
She
calls
Twi[er
her
“crea=ve
outlet.”
When
it
comes
to
restaurant
customer
engagement
and
loyalty,
it’s
important
to
remember
that
yes,
promo=onal
offers
are
important.
S=ll,
in
an
age
when
it’s
so
easy
for
customers
to
become
reduced
to
faceless
en==es,
personal
connec=ons—connec=ons
that
evoke
an
earlier,
less
tech-­‐centric
=me—are
cri=cal
in
breaking
through
to
the
quick-­‐service
and
casual-­‐dining
crowd.
To
stay
ahead
of
“the
wave
of
the
now”
is
to
become
an
omnichannel
marketer
who
delivers
omnichannel
loyalty
and
customer
experiences,
no
doubt.
In
light
of
Ramon
De
Leon's
speech
at
RAMP,
however,
it's
important
we
remember
the
real
people
at
the
other
end
of
each
channel.
There
must
be
an
ongoing
dialog,
a
conversa=on
that
advances
a
true
rela=onship.
So
is
genuine
customer
experience
back?
You
be[er
believe
it!
“It’s important that
social media be more
like a genuine
conversation between
good friends. There is a
need for brutal honesty
and unparalleled
transparency.
Extinguishing social
media “fires” with social
media “water” is as
important as addressing
a “real-world” problem
like a mixed-up order.”
- Marc Glazer
18

20. Con8nued
from
page
17
boUom...
Starbucks
will
use
its
metrics
gathering
to
discover
which
members
use
their
rewards
card
least
frequently,
sending
text
messages
to
mobile
phones
offering
free
cups
of
Joe
and
other
=mely
and
relevant
rewards.
So
far
the
company
has
analyzed
about
half
of
its
6
million
loyalty
program
memberships.
The
ques=on
is:
what’s
the
harm
–
if
any
–
in
promo=onal
adver=sing
when
it
costs
Starbucks
pennies
per
cup?
With
its
new
approach
to
the
disloyal,
my
advice
to
Starbucks
would
be
to
think
about
the
‘Five
Es,’
–
that
is,
Enterprise,
Experience,
Economics,
Enablement
and
Execu=on.
Enterprise
speaks
to
the
business
at
hand,
experience
relates
to
the
brand
rela=onship
customers
seek,
economics
concerns
the
cost
of
genera=ng
such
loyalty,
enablement
relates
to
the
mechanics
of
making
loyalty
happen
and
execu8on
refers
to
its
real-­‐=me
deployment.
Brands
that
try
appealing
to
every
consumer
segment
all
the
=me
risk
dilu=ng
what
they
stand
for,
undermining
the
enterprise
at
large
and
weakening
the
customer
experience
for
truly
loyal
customers.
They
also
risk
raising
short-­‐term
costs,
making
execu=on
sluggish.
In
contrast:
• Commi[ed
long-­‐term
customers
usually
possess
a
strong
sense
of
brand
pride
and
devo=on
for
which,
historically,
loyalty
programs
reward
them.
• Doing
so
promotes
posi=ve
brand
engagement
and
the
opportunity
for
genuine
experiences
that,
ideally,
loyalty
program
members
are
eager
to
tell
their
friends
and
family
about
through
every
channel
they
use,
including
mobile,
social
media,
online
and
of
course,
word-­‐
of-­‐mouth.
Starbucks’
brand
message
is
clear:
it
caters
to
the
upscale
customer,
who
doesn’t
think
twice
about
ordering
a
$7
cup
of
coffee.
Is
it
wise,
then,
to
spend
such
effort
seeking
to
a[ract,
engage
and
retain
a
rela=vely
disloyal
subset?
Widening
the
loyalty
net
a
li[le
further
isn’t
a
bad
thing
by
any
measure.
It’s
just
that
the
intensity
of
its
rollout
needs
to
be
measured.
So
if
you’re
a
brand
intrigued
by
Starbucks’
novel
loyalty
approach,
by
all
means
gather
the
data
and
start
hun=ng
for
your
most
disloyal
customers.
But
take
the
economics
(read:
cost)
of
the
Five
Es
seriously,
otherwise
your
enterprise
could
suffer.
Consider
a
six-­‐month
trial
period
to
see
if
the
expense
of
catering
to
disloyal
customers
yields
higher
spends
and
increased
brand
interac=ons.
Otherwise,
efforts
to
a[ract,
engage
and
retain
the
disloyal
might
be
to
your
company’s
disservice.
19

21. Ask
Siri,
the
genderless
iPhone
personal
assistant,
what
the
weather
is
and
it
can
tell
you.
If
you
ask
it
a
ques=on
like
“are
you
married?”
you’ll
get
an
almost
human
response
(it
coyly
dodges
the
ques=on).
But
ask
Siri
what
you’re
likely
to
buy
from
your
favorite
retailer
—
a
deduc=on
based
in
part
on
purchasing
history
and
other
behavior-­‐
based
metrics
—
and
Siri
will
falter.
Siri
fails
for
the
same
reason
that
many
retailers
fail
when
it
comes
to
a[rac=ng,
retaining
and
engaging
customers.
For
all
the
talk
of
Big
Data
and
its
global
impact,
more
than
a
quarter
of
North
American
retailers
in
2012
—
27%
—
remain
unaware
of
Big
Data
or
are
aware
of
its
existence,
but
uncertain
of
its
retail
poten=al.
The
rest
report
par=al
awareness
and
knowledge.
For
the
more
than
1
in
4
retailers
that
have
yet
to
embrace
the
poten=al
of
Big
Data,
here’s
a
refresher.
For
them,
the
engagement
riddle
is
that
retailers
have
always
been
data-­‐driven,
but
on
paper
and
in
siloed
formats.
It’s
surprising,
then,
that
so
many
have
failed
to
grasp
Big
Data’s
customer
engagement
and
loyalty
implica=ons.
Big
Data
concerns
the
accumula=on
and
analysis
of
—
as
well
as
ac=on
on
—
the
2.5
quin=llion
bytes
of
data
created
every
day,
much
of
it
freely
available
online
or
on
mobile.
In
fact,
90%
of
all
data
that
exists
today
was
created
in
the
last
two
years.
Big
Data
and
the
customer
rela=onship
management
sopware
(CRM)
managing
today’s
omnichannel
environment
—
POS,
smartphones,
tablets,
kiosks,
digital
signage,
etc.
—
do
one
thing
well
and
another
increasingly
well:
The
recording
of
consumer
habits:
That
includes
items
purchased,
purchase
loca=on,
purchase
frequency,
amount
spent
and,
some=mes,
purchaser
gender.
“For all the talk of Big Data and
its global impact, more than a
quarter of North American
retailers in 2012
— 27% — remain unaware of
Big Data or are aware of its
existence, but uncertain of its
retail potential.”
SOLVING THE RIDDLE OF BIG DATA
By David Andreadakis
20

22. The
accumula<on
of
psychographic
metrics:
Retailers
can
be[er
predict
customer
feelings
in
real-­‐=me
and
use
that
informa=on
to
tailor
product
offerings
and
loyalty
rewards
that
address
their
immediate
emo=ons.
Reverse
engineering
what’s
already
being
done,
this
new
approach
to
behavioral
Big
Data
analysis
helps
retailers
predict
customer
wants
—
possibly
even
before
those
customers
are
even
aware
of
wan=ng
something.
Loyal
to
a
more
social
data-­‐driven
experience
Retailers
are
gaining
this
more
subtle
but
vital
informa=on
through
gamified
loyalty
programs
and
social
media.
Take
Raley's
Family
of
Fine
Stores,
a
California-­‐based
grocery
chain.
The
brand
recently
enhanced
its
Something
Extra
loyalty
program
with
Try-­‐It,
an
online
loyalty
feature
only
available
to
Something
Extra
members.
Try-­‐It
members
are
invited
to
share
their
product
experiences
via
blogs,
social
networks,
site
tools
or
offline
communica=on.
Consumers’
omnichannel
interac=ons
are
scored
by
the
brand
based
on
their
number
of
“likes,”
comments
and
re-­‐tweets,
earning
higher
scores
the
greater
their
interac=on.
Higher
scores
also
mean
access
to
be[er
deals
and
campaigns
down
the
road.
Another
example
comes
from
David’s
Bridal,
a
U.S.
wedding
gown
and
formal
wear
chain.
In
an
effort
to
a[ract
and
retain
customers
by
using
social
media
to
gather
even
more
real-­‐=me
customer
informa=on,
David's
launched
the
"My
Event"
sec=on
of
its
Web
site.
Brides-­‐to-­‐be
use
the
site
to
organize
and
discuss
the
en=rety
of
their
wedding
experience
with
select
Facebook
friends.
The
goal
is
for
brides
to
help
generate
conversa=on
beyond
the
dress.
Party
planning,
shopping
lists,
tasks,
even
a
wedding-­‐related
newsfeed
are
all
encouraged.
Perhaps
the
most
interes=ng
feature
is
the
“mood
board”
where
members
describe
how
they
envision
their
big
day.
While
the
above
helps
the
bride
and
her
family
stay
organized,
the
big
win
for
David’s
comes
in
the
form
of
accumulated
psychographic
metrics
and
the
possibility
that
more
people
—
the
bride’s
social
network
-­‐-­‐
will
consider
David’s
when
it’s
their
turn
to
say
“I
do.”
Conversa=onal-­‐based
data
crea=ng
a
more
accurate
customer
behavioral
picture
is
at
the
forefront
of
where
Big
Data
is
going.
Considering
the
speed
at
which
new
informa=on
is
generated
and
consumers’
increasing
desire
for
=mely
and
relevant
offers,
the
more
than
1
in
4
retailers
who
have
yet
to
embrace
Big
Data
are
running
out
of
=me.
This
“retail
riddle”
shouldn’t
be
hard
to
crack.
If
retail
chains
both
large
and
small
— like
David’s
and
Raley’s
—
have
figured
it
out,
shouldn’t
your
brand
as
well?
21
AMP

23. Walk
into
a
Kroger
supermarket
and
you
might
be
surprised
by
what
you
see:
adver=sements
promo=ng
individualized
pricing
linked
to
loyalty
program
membership.
It’s
a
business
intelligence
strategy
that’s
been
gaining
trac=on
for
several
months
since
the
grocery
chain’s
pilot
pricing
program
launch
last
summer
and
I
expect
its
popularity
(and
rising
acceptance
by
skep=cal
consumers)
will
con=nue.
According
to
a
recent
Loyalty
Report,
Kroger
Rewards
was
the
grocery
sector’s
most
popular
loyalty
program,
with
an
83%
overall
sa=sfac=on
ra=ng.
Why
the
success?
Because
individualized
pricing
isn’t
just
about
strict
discounts
and
offers.
It’s
about
enhancing
the
customer
experience
and
elici=ng
life=me
customer
value.
Kroger
bases
its
individualized
pricing
on
past
purchases
and
what
customers
have
typically
spent.
The
result
is
a
sense
of
brand
loyalty
that
far
exceeds
what
you
could
achieve
with
something
as
simple
as
weekly
cutout
coupons
sent
in
the
mail
–
or
similarly
generic
offers
via
email
or
other
channels.
In
other
words,
Kroger
is
taking
loyalty
to
the
next
experience-­‐driven
level,
demonstra=ng
to
its
customers
through
clear
and
transparent
ac=ons
that
“this
company
has
taken
the
8me
and
effort
to
get
to
know
me.”
Individualized
pricing,
however,
is
just
the
beginning.
A
growing
number
of
brands
across
different
ver=cals
(most
no=ceably
in
financial
services
and
retail)
are
upping
their
loyalty
game
by
trumpe=ng
the
value
of
individualized
experiences
over
just
discounts
and
deals.
This
is
known
as
transac8onal
loyalty.
While
remaining
a
bulwark
of
loyalty
program
engagement,
transac=onal
loyalty
is
open
a
simpler
consumer
behavior
modifica=on
model
that’s
costlier
to
implement.
“Individualized pricing isn’t just
about strict discounts and
offers. It’s about enhancing the
customer experience and
eliciting lifetime customer
value.”
PERSONALIZING YOUR CUSTOMER’S
LOYALTY EXPERIENCE THROUGH
BUSINESS INTELLIGENCEBy Michael Hemsey
22

24. Contrast
that
with
experience-­‐driven
loyalty:
a
consumer
engagement
model
built
on
psychographic
triggers
and
status
that
strives
to
make
an
emo=onal
connec=on
with
loyalty
program
members,
building
a
sense
of
reciprocity
along
the
way.
Brands
would
be
wise
to
adopt
the
tenets
of
experience-­‐driven
loyalty,
and
here’s
why:
• Brands
that
fail
to
engage
their
increasingly
experience-­‐driven
(and
tech
savvy)
customers
risk
loyalty
program
membership
fall-­‐off
or
non-­‐engagement
• Aggressive
rival
brand
compe==on
undermines
exis=ng
loyalty
outreach.
Thus,
if
your
brand
isn’t
exploring
new
ways
to
drive
innova=ve
customer
experiences,
you
can
be
certain
a
compe=tor
is.
• Data
suggests
the
loyalty
landscape
is
at
a
cri=cal
crossroads
and
stellar
programs
are
essen=al
in
order
to
prevent
loyalty
program
backlash.
The
last
bullet
point
deserves
further
emphasis
as
the
latest
Colloquy
data
shows
something
of
a
mixed
bag
for
loyalty
program
popularity.
While
overall
loyalty
program
membership
has
risen
27%
from
2010,
only
44%
of
survey
respondents
were
actually
engaged
in
any
one
of
their
approximately
21.9
memberships
per
household.
That’s
a
decrease
of
4.3%.
And
while
it
may
not
sound
like
a
lot,
a
2.2%
annual
slide
amounts
to
approximately
10%
drops
every
five
years.
The
point:
a
disengaged
loyalty
program
subset
is
as
toxic
to
the
program’s
overall
health
as
is
outright
non-­‐membership.
Chase-­‐ing
Rewards
and
Zapping
Up
Loyalty:
Two
(Addi<onal)
Brands
Promo<ng
A+
Loyalty
Beyond
innova=ve
grocery
chains,
Colloquy’s
study
found
that
Chase
and
its
Chase
Ul=mate
Rewards
loyalty
program
led
the
financial
services
industry
with
an
84%
approval
ra=ng
while
Kohl’s
and
Kohl’s
Rewards
snagged
the
top
spot
in
retail
at
73%
approval.
A
quick
visit
to
Chase’s
website
illustrates
exactly
why
they
remain
a
financial
services
category
winner.
Two
of
the
Chase
Ul=mate
Rewards
subcategories,
“Experiences”
and
“Travel,”
make
up
40%
of
the
en=rety
of
the
Chase’s
rewards
framework.
In
terms
of
experiences,
Chase
members
can
enjoy
a
selec=on
of
perks
including
VIP
access
to
concerts,
wine
tas=ngs,
movie
premieres
and
spor=ng
events.
Best
of
all
is
that
these
experience-­‐driven
rewards
are
based
on
consumer
preferences
gleaned
from
the
business
intelligence
gathered
from
today’s
omnichannel
–
and
omni-­‐
empowered
–
loyalty
member.
That
means
customer
outreach
across
all
channels.
But
omnichannel
loyalty
isn’t
just
about
channel
preference.
It’s
also
about
ensuring
that
at
each
step
throughout
the
purchasing
con=nuum,
consumers
feel
engaged
with
a
brand
and
that
rewards
have
been
tailored
specifically
to
their
wants
and
needs.
While
Kohl’s
was
the
focus
of
the
study
I
men=oned
earlier,
I
also
want
to
men=on
Zappos.com,
the
online
shoe
and
apparel
retailer.
Aper
a
recent
purchase
of
hiking
shoes,
I
no=ced
the
emails
I
was
receiving
from
the
etailer
changed.
Rather
than
generic
offerings
that
could
easily
end
up
in
my
junk
mail
or
being
deleted,
Zappos
looked
at
my
purchasing
history
and
adjusted
its
offers
accordingly.
Instead
of
sending
more
shoe
offers,
Zappos
deduced
that
the
kind
of
hiking
shoes
I
purchased
is
indica=ve
of
inland
outdoor
ac=vi=es
and
not
a
lazy
day
at
the
beach.
As
such,
I’ve
received
offers
for
camping
gear
and
other
outdoor-­‐related
products.
What’s
interes=ng
is
that
none
of
Zappos’
engagement
required
loyalty
program
membership
as
such
tac=cs
have
become
central
to
the
company’s
DNA
and
brand
promise.
Internally,
Zappos
calls
its
customer
engagement
its
“WOW”
philosophy.
I
can’t
speak
for
Zappos’
other
customers
but
this
customer
is
definitely
wowed.
Taking
the
Pulse
of
the
Customer
Experience
As
consumers
interact
with
their
smartphones
and
tablets
–
browsing
the
Web,
sharing
recent
purchase
informa=on
or
brand
likes
or
dislikes
on
social
media,
swiping
and
tapping
on
apps
–
they
create
a
digital
informa=on
trail
that
reveals
individual
preferences.
23

25. Just
as
physicians
gauge
pa=ents’
health
through
blood
tests
and
blood
pressure
measurement–
loyalty
program
managers,
whether
in
retail,
financial
services,
or
any
other
consumer-­‐facing
ver=cal,
need
to
take
their
customers’
pulse
–
albeit
while
respec=ng
consumer
privacy
while
seeking
opt-­‐in
engagement.
This
means
implemen=ng
solu=ons
that
collect
and
analyze
valuable
informa=on
so
it
can
be
turned
into
ac=onable
business
intelligence
that
dictates
how
each
customer
is
approached
and
engaged
with
offers
and
experiences
that
are
relevant,
=mely
and
add
value.
For
loyalty
marketers,
the
tools
to
create
individually-­‐
tailored
customer
experiences
that
seamlessly
cut
across
all
channels
and
draw
customers’
a[en=on
and
repeat
business
are
easily
accessible.
With
so
many
loyalty
programs
compe=ng
for
consumers’
a[en=on
and
the
posi=ve
long-­‐term
consumer
percep=ons
of
loyalty
program
effec=veness
at
risk,
brands
need
to
offer
something
more
than
the
stereotypical
points-­‐for-­‐rewards
model.
When
they
turn
customer
insights
into
genuine,
consistent
and
customized
experiences
that
drive
op=mum
engagement,
brands
stand
a
much
be[er
chance
of
crea=ng
a
strong
base
of
sa=sfied
customers
and
brand
advocates
who
keep
coming
back
again
and
again
–
maybe
even
for
life.
“For loyalty marketers, the tools
to create individually-tailored
customer experiences that
seamlessly cut across all
channels and draw customers’
attention and repeat business are
easily accessible.”
- Michael Hemsey
24

26. Big
Data,
social
media
and
the
con=nued
expansion
of
mobile
market
satura=on
were
all
topics
of
wide
discussion
and
analysis
throughout
the
loyalty
industry
during
2012.
And
it
looks
as
though
these
trends
will
con=nue
to
grow
and
amplify,
establishing
themselves
as
essen=al
components
of
today’s
customer
rewards
experience.
Some
of
the
ships
we
expect
to
see
more
of:
o As
brands
adop=on
of
social
media
as
a
customer
engagement
tool,
the
original
focus
was
on
quan=ty
–
how
many
Facebook
“likes”
or
Twi[er
followers
can
we
amass?
Now,
brands
with
loyalty
programs
are
shiping
the
spotlight
to
the
quality
of
customer
rela=onships
on
social
media
and
turning
those
rela=onships
into
revenue.
o Driving
loyalty
through
data
will
con=nue
to
become
more
sophis=cated
as
brands
–
for
example:
restaurants
that
store
informa=on
on
where
regular
patrons
like
to
sit,
what
are
their
favorite
appe=zers
and
when
their
birthdays
are–
use
tech
channels
to
assemble
data
snapshots
of
individual
customers’
preferences.
o Focus
will
con=nue
to
ship
from
brands
trying
to
win
customer
loyalty
through
tradi=onal
points-­‐for-­‐rewards
models
and
toward
winning
stronger
“emo=onal
loyalty”
–
and
that
comes
from
providing
customers
with
a
great
experience
and
making
them
feel
truly
valued.
o Loyalty
marke=ng
is
never
sta=c;
it
must
con=nually
change
shape
to
fit
the
latest
channels
of
communica=on
that
customers
favor.
As
they
enter
the
second
half
of
2013,
rewards
program
managers
will
con=nue
to
seek
more
sophis=cated
ways
of
leveraging
the
engagement
poten=al
of
Big
Data,
social
media
and
mobile
to
build
ever-­‐
stronger
rela=onships
with
their
best
customers.
As
we
look
ahead
to
the
remainder
of
2013,
Kobie
is
excited
to
be
part
of
the
discussions
that
are
taking
place
about
how
companies
with
customer
rewards
programs
are
accoun=ng
for
these
trends
when
designing
programs
for
maximum
value.
ARE LAST YEAR’S BIGGEST
TRENDS IN THE LOYALTY
INDUSTRY CHANGING, OR ARE
THEY GROWING?
By Bram Hechtkopf
25
GET READY FOR AMP™
Alchemy Marketing Platform, coming soon
to a loyalty program near you.