My Latest Article for Loyalty 360

There is seemingly no end to the new wave of innovative loyalty and rewards programs in the market. Many are centered around mobile.  Others require the customer to check in as a part of an e-statement engagement based on spending habits and like merchants.  Meanwhile, the traditional miles and points programs push onward, though most have higher redemption hurdles and restrictions than ever before.

The bottom line seems to have shifted in many loyalty and rewards programs. Instead of looking to generate revenue and repeat sales by building bonds with the customer, many in the industry have simply tried to create another direct revenue stream from their loyalty and rewards programs. The outcome results in the news like this: Reward schemes see 31% drop in participation.  (My personal favorite word choice in this article being the word ‘scheme’ of course.  Ponder that for a moment.)

Somewhere we lost the idea of trying to create positive brand interaction (feel good experiences, if you will – you know the kind that put a smile on your customers face) in exchange for bells and whistles, or quick profits.  We need to find the balance, and start putting usage, simplicity and value back in the center of our efforts. I offer my thoughts in this article I put together for Loyalty 360 and Loyalty Management magazine.  Your thoughts are welcome in the comments.

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Filed under Increasing Loyalty Program Effectiveness, Loyalty Programs, Merchant-Funded Rewards, Mobile, Points Programs, Promoting Your Loyalty Program, Redemption, Rewarding Rewards, The Loyalty Programs of the Future, Uncategorized

Diving into the World of Virtual Gift Cards

Yesterday Access Development announced an expansion of our relationship with Firethorn and their SWAGG mobile app. Access currently enlists merchants willing to offer mobile coupons for the SWAGG Offers component, and now we’re adding virtual gift cards to the mix. Users will be able to purchase, send, redeem and swap gift cards from a growing list of merchants, all from the SWAGG interface on their phones.

loyalty programs around, but our secret weapon is a killer Partnership Marketing unit that manages and builds relationships with hundreds of thousands of merchants across the nation. Our Partnership Marketing team has it down to a science, communicating the value a merchant can realize by being a part of the specialized, private, Access discount network. Smart companies like Firethorn, a subsidiary of Qualcomm, are taking advantage of it so they can focus on building amazing products.

I’m proud to work with our Partnership Marketing team, as well as the great people over at SWAGG. If you haven’t tried it out, stop what you’re doing and go download it now.

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Filed under Merchant Adoption, Merchant-Funded Rewards, Mobile, Partnership Marketing, Redemption, The Loyalty Programs of the Future

Are You Active in Your Own Loyalty Program?

When I’m talking with loyalty executives about their needs, one of the first things I ask is how involved is your executive or senior management team in your loyalty program? Most of the time, the answer is “not very.”

Executives That Don't Pay Heed to Customer Demands

If the leaders of a company (or even a rewards division) don’t support or engage with their own programs…how can we expect our customers to engage?

It’s indicative of a much larger issue: antipathy. Or the thought line of “Well, I have a loyalty program because I must have a loyalty program.”

See also: “We have a loyalty program that fits our current budget abilities.”

A lot of these same companies then sit back and wonder why their loyalty programs do nothing to move the dial. If only they would tune in to their customers.

Communicating with the customer and knowing what they need and want will add value and build a successful program. As a customer, I want to feel like I’m being reached out to and that my opinions matter. Companies then need to use those opinions to shape their programs.

According to the 2011 Colloquy Loyalty Census, the number of loyalty memberships in the U.S. exceeds 2 billion. The number of active members in the U.S. is still less than half the total. And, the definition around ‘active’ is defined with engaging with the program once per annum.

Not too engaging.

The lack of value (mission critical!) and good communication, from my perspective, results in unused rewards, disengagement, un-involvement, and no relevance.  I suggest partnering with a loyalty company who is considered an expert in the particular field of loyalty you are considering. If you want to grab the attention of myself and other consumers, you must implement and market your loyalty program’s value, benefits, and how it helps solve ‘problems’ I have (one caveat: without stating the problem – we consumer don’t like to be told about them, but we know they exist!)

Obviously I strongly recommend key management personnel get involved, use the program, then help employees get engaged and use the program, learn and listen to all of their feedback.  Leading by example and firsthand experience/knowledge is so crucial to a successful program.

Really it boils down to putting yourself in the shoes of your customers, which is something you ought to be doing on a daily basis.

What’s it going to take to get you involved in your own programs?  You may not be your target audience, but you will understand if the “ask” (or the behavior you are seeking) is sufficient for the “reward” your customers/employees will benefit from.

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Filed under Increasing Loyalty Program Effectiveness, Loyalty Programs, Promoting Your Loyalty Program

Holiday Shopping: The Lesser of Two Evils

I don’t know about you, but my overall experience with holiday shopping continues to be one with dread expectations. I have fought the Black Friday crowds at 4:00 am in years past and scored a ‘few’ deals that I used to justify my pre-dawn effort, lack of sleep, and overall angst when I could have been home dreaming about the true meaning of the season.

As I’ve said here often, Deal Fatigue doesn’t exist. I, like you, love to get a deal. So each year we are faced with a dilemma—the “two evils” of holiday shopping:

1)      Fight the crowds and lose the sleep in an attempt to snag one of the few (understocked) mega-sale items, or

2)      Surf countless websites to find deals on items I can’t see, touch, feel and be left with uncertainty after I purchase that I got the “right thing.”

Last year I gave into #1.  I got up early and drove from store to store and, yes, I did score some deals.  I also lost some deals as well, as well as my temper as I became increasingly frustrated with the entire process and ended up having a rotten day—on the day after ‘Thanksgiving,’ no less.

Essentially, I following a day of joy, happiness and gratitude with a day of – well, something less than that.  So this year, I decided to give way to #2 and try my luck online.

I began by checking all the ads for items I was interested in and plotted out a game plan. I would still get up early, about 5:30, walk downstairs in slippers and PJs and get online (and perhaps rely on the more tried-and-true approach of picking up the phone for a couple items) in an effort to accomplish my goals.

The results?  First, while I wasn’t able to ‘handle’ the merchandise (call me old school), I was able to get about 75% of what I set out to acquire.  Second, for the items I wanted, the vast majority of them were available online with free shipping or ‘site-to-store’ features to avoid shipping costs.  Third, in a few instances where the deal was not available online (sold out) I actually picked up the phone and was pleasantly surprised to reach actual people and even better, those actual people were willing to put items on hold for me—at the sale price!  (This wasn’t Walmart of course, but places like Game Stop and Big 5 Sporting, etc.)

Finally and best of all, I was able to go back to bed around 7:00 am having accomplished a great deal. I later drove to the different stores (around 12 noon) and actually picked up the items they held for me and secured that ‘early bird’ pricing.

The good news is, “The Deal” still lives on.  We sometimes have to fight for the Deal, but it’s even better when we can get the deal by being smart instead. In this case, I found that almost all of the ads I had were available online and I was able to quickly cross-reference to make sure I was getting the best deal. And, I was able to do it from my home.

I am still very much a ‘brick & mortar’ guy and like to get the deals in-store. However, as far as my holidays are concerned, I enjoyed my weekend ten-fold more than prior years and was truly ‘Thankful’ for the experience.

Happy Deal Hunting!

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Filed under loyalty discounts, Loyalty Fatigue

Credit Unions & Merchant-Funded Rewards

How competitive are credit card rewards today? A recent report showed that consumers search online for the best credit card rewards 514,610 times a month, according to Orange Soda, an online search marketing company based in American Fork, Utah.

Add 8,200 searches made specifically for debit rewards and it becomes evident that not only are payment card rewards in high demand, they’re expected. Consumers are clearly shopping to find the best rewards before they put a card in their wallets.

This level of demand is coming as many financial institutions feel pushed to lower the cost of their cardholder rewards programs. The recession is taking a toll, interchange fee pressures are mounting, and balance sheets are increasingly weighed down with liabilities from existing points-based programs.

Facing lower margins, many of these organizations are seeking more affordable ways to attract and keep customers while building card preference.

Enter the merchant-funded program, which has flourished in this environment. In this model, a network of merchants offers exclusive discounts or a cash-back amount to the credit union’s member cardholders.

Read more . . .

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Filed under Credit Unions, Increasing Loyalty Program Effectiveness, Loyalty Programs, Loyalty Programs for a down economy, Merchant-Funded Rewards, Redemption, The Loyalty Programs of the Future

Staying Relevant in a Down Economy

Recession Coupon UseAlmost every company has felt the impact of this economy, and we have seen it transform our customers. As we face the reality of double-digit unemployment, the largest loss in personal wealth, savings, retirement since the great depression and high consumer debt (an average of $10,482 in credit card debt per household), it is clear the consumer mindset has shifted into survival mode. 

This change demands that businesses, for their own survival, must shift as well. Consumers overall are increasingly disengaged and focusing primarily on the MUST haves for their family vs. many of the products and services each of us may provide in the market.  In an attempt to keep these customers engaged and drive more loyalty/profitability, loyalty programs are a logical strategy. 

Some attempts are more successful in this effort than others.   An essential component of those programs that do succeed in this environment is the ability to tie a company’s given products and services to these same fundamental needs that have recently become the main concern of households. Put simply, consumers want to save, and are increasingly drawn to loyalty programs that help them do that. In fact, there has even been a 25% growth in loyalty membership between 2006 and 2008. Among financial institutions, retail checking and debit card rewards have seen a 77% increase.

If the economy has challenged the relevance of your primary offering, a successful loyalty program that delivers consumer savings can help you realign your proposition with the current consumer mindset. Put simply, consumers never stop wanting a good deal. They can feel overwhelmed by loyalty programs because so many don’t deliver true value (loyalty fatigue) but they won’t ever tire of actually saving money.

We have recently calculated the potential impact of such a program on money-conscious households at Access.  We found that our merchant-funded discount and rewards network, which emphasizes everyday, relevant discounts, could deliver $135 in savings a month on average to a household with the national median income of $45K. With this message, our clients have been able to better align with the changing needs of their customers.

We all want to be top of mind and top of wallet in the minds of the consumer. The key in the current economic climate is to put the consumer mindset in your favor with offerings that enhance the value of your existing products/services and effectively boost the bottom line for your customer on a daily basis, not only when they buy from you.  In turn, your business also maintains a healthy bottom line–even in difficult times.

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Filed under 24512140, Increasing Loyalty Program Effectiveness, Loyalty Programs

The Friend of My Friend is My Friend



Twenty-five years ago last October, the President of Ameritech, Bob Barnett, made the first commercial cell-phone connection by ringing up Alexander Graham Bell’s grandson on a DynaTAC handset that weighed 2.5 lbs and cost $3,995—a call that launched a $150B industry.


Yet, for another decade, the mobile phone was generally just seen in movies, and, unless you were a rock star or a member of the G7—the cell phone on your car dashboard was probably just a plastic gag to amuse the neighbors.  This evolved into the fabulous gray phone-brick that trickled down to the upper middle-class, and, well—the slick minicomputer in your pocket (that has never been more than 10 feet away from you since you bought it?)—that tells the rest of the story. 


The mobile phone has fed and fueled the demand for immediacy in a way that is only second to the internet.  It offers instant information, instant communication, instant solutions to our daily problems.  With mobile couponing (and next, complete mobile commerce), it can provide instant value—and in turn—instant loyalty.


I noticed on my drive to work recently that a local bike shop put up on their marquee a code I could text to receive exclusive discounts.  Merchants are seeing the power of this medium, as they know that from the moment I enter that code, a tie has been made.  When I am next in the market for parts or service or a new birthday bike for my kid—can you see me going to another shop?   Unlikely.  The bike shop just tied itself to one of my most essential and most-used possessions.


The company tied to the ubiquitous mobile phone essentially becomes tied to the mobile user. 


Things have come full circle.  As business became more technologically driven, we saw the business relationship grow less personal.  Now, as technology becomes increasingly individualized and profile-driven, we are seeing the ability to create even more individualized relationships with consumers than ever before.  From a loyalty and incentives standpoint, mobile is the perfect platform for immediacy and direct, personal contact—even if it is simply through the devices we now hold dear. 

I wonder what good old Alex Bell would think of that.

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Filed under Loyalty Programs, Mobile, The Loyalty Programs of the Future

The Troll Under the Bridge


As we attempt to bridge the gap between what mobile can do now and the future of mobile commerce, what are the issues that stand in the way?  Put simply, the majority of merchants, consumers and service providers need to see a reason to invest in a standardized mobile platform. 


Such widespread retooling efforts are not unprecedented when there is a clear financial benefit—think high-speed internet cabling, the conversion to digital TV or way back when with the installation of payment card terminals.  The wide adoption of a new, mobile-based system will evolve in the same way—as scaled-down mobile campaigns are able to show long-term value to the parties involved.


The troll under the bridge (our bridge to full mobile commerce) is uncertainty:

  • Merchants won’t adopt a technology when they are unsure of consumer interest. 
  • Consumers won’t largely convert to a technology not in standard use
  • Merchants cannot calculate favorable cost/benefit ratios on terminal upgrades
  • And, despite years of mobile-based payment system use in Europe, consumers on this side of the Atlantic remain uncertain of the security of the platform
    • 71% mobile user respondents report that they would not consider using a mobile device to bank or shop online
    • 59 % stating they do not believe their mobile devices will provide secure transactions.

(March, 2008 Study by Unisys reported by Cardline)


The troll of uncertainty will let us cross this technological bridge only when we an answer the riddle:


What will get merchants to see the power of adopting a mobile the platform to drive increased revenue while getting consumers to do the same for increased value?


Once again, mobile couponing is the the key to tackling this uncertainty, as it has the power to use the current platform to demonstrate value and relevance to the consumer and increase traffic to the merchant.  In this economy, the relevance of such a program can play an even greater role. 


It may take longer to tackle that troll with merchants and consumers becoming even more risk averse in this downturn, but at the same time, there’s never been a better time to help consumers save while driving low-cost foot traffic into retailers.


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Filed under Merchant Adoption, Mobile

Why Merchants Love Mobile

Juniper Research recently estimated that by 2011, retailers worldwide would be sending out nearly 3 billion ‘m-coupons’ to mobile phones.  Big names—from McDonalds to Amazon—are incorporating this channel into their marketing strategies.  They all see it coming.


I recently conducted a survey within my company’s merchant coalition of 250,000 locations.  These merchants typically offer traditional or payment-card-based discounts for our client’s members, but I wanted to gauge their interest in mobile marketing to build loyalty and drive revenue.  I sampled merchants from across all fourteen categories we offer (dining, hotel, recreation, etc.) on both the local, regional, and national levels.


The result?  Out of this limited sampling, we immediately identified 50,000 merchant locations ready to participate.


Merchants see the potential of mobile, yet they are still waiting for the couponing strategy to prove itself before they are ready to invest in an infrastructure change at the point of sale.  At the same time, they realize that this initial couponing effort can focus in on the customer to determine what ‘content’ and/or ‘applications’ are most likely to meet their needs and build true brand loyalty in today’s market.



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Filed under Mobile, Redemption

The Bridge to Mobile Magic

“There are more mobile devices than televisions, the devise is rarely apart from its owner, and the potential for targeting a specific audience is tremendous.” (June 25, 2008 – Aite Group Report, Analyst Nick Holland)

 No one questions the powerful promise mobile offers as a means to connect with consumers.  But we still have yet to see how this platform will transform from where it is today into to the magical device of the future.


Even from the perspective of five years ago, today’s cell phone already looks magical—phones are clearly not just for talking on anymore.  It is our key to SMS, texting, PDA/calendaring, taking pictures, mapping/GPS and checking the web for everything from our bank balances cameras to the weather.  As mobile web browsing has slowly become more practicable, today’s mobile has become a powerful tool more and more people can’t live without.


However, from a loyalty perspective, the next level gets even more exciting—with the prospect of using the handset to create real-time, profile-driven relationships with mobile users.  In this new world, platforms will be put in place to provide more relevant, timely and location-specific incentives than ever before.  Combined with a widely-accepted contactless payment platform and the ability to request (pull) and present (push) offers on demand—we have a formula for instant redemption that can immediately and effectively create the loyalty tie.


Imagine driving down the street and, as you pass a Barnes & Noble, you receive a text that offers 15% off at that location.  And, since you previously set up a profile requesting deals on books as they are available, this GPS-enabled message is not seen as an intrusion, but welcomed as a personalized, practical and immediate reward for participating in a mobile incentive program.


Now that’s magic.


Yet, while we love to daydream of that day, we still face the challenge of finding a way to bridge the gap from today’s mobile to the instant, personalized world of tomorrow.  So, how can we use the existing mobile platform to convince consumers, merchants and service providers that they want to take the next step? 


The first step is simple—start with MOBILE COUPONING: simple text or barcode offers sent to the handset and redeemed in the same way as their paper counterparts.  This high-tech, old-fashioned medium can be the first step to demonstrating the potential the handset offers in delivering true value.   Effectively implemented, this strategy will create demand for even faster and more personal delivery while showing merchants that the demand is there and infrastructure  investment is warranted—and get us across the bridge to true mobile incentives. 

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Filed under Increasing Loyalty Program Effectiveness, Mobile, The Loyalty Programs of the Future