How Generation Y will reshape customer loyalty

Generation Y are skeptical of the location-based offers that pop up on smartphones but (not unsurprisingly in the era of over-sharing on Facebook) will reveal personal details for fast, free and easy rewards.

Gen Y (or Millennials) are a fair portion of the global population today at 1.7billion strong (there’s more of them than there are Baby Boomers and three time as many of them as Gen X).  We’ve completed a proprietary study in the USA, UK and Canada (with possibly markets closer to home to follow) on this important market segment.

In all markets we’ve found that Millennials are active in loyalty programmes (75% participate and they’re more willing than their parents to do so) and 75% of them will prefer a brand that gives offers a programme over one that doesn’t. In unprompted responses, Millennials rate loyalty rewards as the top incentive they look for in exchange for sharing personal information with marketers.

Millennials are willing to promote brands or products through social media in exchange for rewards.  This doesn’t extend to them wanting to receive location based offers on a smart phone (only 10% have responded to these offers).  They do however (25% of them) want their smart phones to be a replacement for a plastic loyalty programme card and for the loyalty programme to deliver coupons or gift cards through the smart phone.  Only 10% though want the smart phone to replace their credit or debit card.

The first part of the study covering the USA is available for download from Aimia.com.

Rick Ferguson, Aimia's VP Knowledge Development lead the research and presented it in Sydney this week at The Customer And Loyalty Show.  

Rick Ferguson - Aimia's VP Knowledge Development -  presents the Millennial Research in Sydney this week.

"Millennials are even more willing to participate in loyalty and reward programs than their parents, but they expect reward programs to be free, easy and fast," said Rick. "This generation also relies heavily on outside information to make purchase decisions—information that is often out of the realm of control for marketers. The winners in building sustainable brand loyalty with Millennials will be those who break through the information overload to deliver value at the level of the individual customer."

Digital marketing technology – the best thing since sliced bread?

I recently attended the Shopper Marketing conference in Sydney which featured speakers, workshops and case studies on how to best drive sales, engage shoppers and subsequently influence their purchasing power while in store.

One consistent theme at the conference was that digital marketing technology is the latest trendy must-have for retailers and manufacturers. From iPhone apps, digital billboards and interactive LED screens, digital was touted as the next best thing.

However, many of the opportunities lacked a strong business case and ROI - primarily because the core foundations of new product development were missing. This means for marketers - beyond the "cool" factor, the ability to get a solid ROI out of the innovation is missing.

It's a good reminder, whether working with loyalty programmes, promotional communications, or iPad apps, to look beyond the trend to ensure that the opportunity;

• meets a need that a customer has yet to realise they have (if not meeting an existing need);


• relates to your product or service and the purpose of your business;


• tells you something about your customer that you can use in your business;


• is difficult for your competitor to replicate.

And don't forget, if your customer service is poor, your product unappealing or the pricing is wrong, the coolest app will not save your sales.

Driving better returns from retention dollars

M1 Telecom - Singapore's smallest telco lost more customers this year than last year - 33% more customers to be precise (their customer churn rate increased from 1.2% per month to 1.6% per month). This on the back of a retention budget that increases 12% in 2008. Not the kind of result they were likely expecting.

Customer retention expenditure needs to be focused and disciplined. Sutowu of Carlson Marketing Asia Pacific has outlined a disciplined investment taxonomy for retention dollar investment.

Our man Sutowo is based in Singapore - he's responsible for our Decision Science Services in Singapore, Malaysia, India, Japan and Hong Kong.

Published in the Marketing Institute of Singapore's April journal issue, Sutowu's model relies on 3 pillars :

1. Customers need to be targeted at the right time
2. The right customers must be selected in the targeting
3. They must receive the right offer or value (which in our business is often driven through a loyalty programme)

All of this is underpinned by frequent Test and Learn programmes.

Sutowo's full article is available here.

February 10th - We present international mobile marketing case studies at Auckland's AmCham

We at Carlson Marketing count ourselves fortunate to have been trusted by our international clients to mobilise their businesses through apps, smartphones and mobile sites over the last few years. We'll be sharing some of our key learnings at the American Chamber of Commerce in Auckland on February the 10th.

Doug Rozen (our Senior VP Creative, Interactive, Media & Mobile based in the USA) will present a working model built up through his hands-on operational experience. He'l specifically discuss case studies from our clients:

• AT&T - a leading USA based Telco
• Coca-Cola - their new direct to customer strategies
• Amtrack - a leading US rail network
• The UK’s Nectar loyalty programme (Nectar is our sister company).

He’s a frequent speaker at mobile marketing events and most recently presented at ad:tech in New York.

Doug Rozen presenting at last year's loyalty conference in India

According to Doug "Around the world there is significant consideration and investment being placed in mobile marketing. The mobile channel offers not only a means to distribute marketing messages to customers on the go but also provides a litany of tactics. While many marketers are focused on the technological marvels that can be achieve through apps, there is a rising opportunity and more importantly a customer demand to add mobile as part of multi-channel CRM initiatives".

Doug Rozen interviewed at ad:tech in New York in November 2010

Date : Thursday the 10th February

Place : The University of Otago House, Street Level, 385 Queen Street Auckland

Time : Registration 3:45 pm

Presentation 4:00 pm

Refreshments 5:00 pm

Concludes 6:30 pm

If you would like to be our guest at this event please email me at simon.rowles@carlsonmarketing.co.nz or call on (09) 524 1122

Foursquare provides mobile loyalty interactions to established loyalty programmes

It's taken a while for the mobile phone to to produce exciting innovations in the world of customer loyalty. Finally though there are two key developments that have achieved sufficient consumer adoption that programme operators are including them in their offerings. Both are products of the mobile app stores delivering cool tools to smart phones.

Cardstar

The first and somewhat more mundane of the two is Cardstar

- a smart phone app downloaded over 1.5 million times globally (Apple, Android and Blackberry). Once on the customer's phone - the app stores the bar codes of all the customer's loyalty cards (which can then be tipped out of overloaded wallets). The customer then presents the selected card's bar code on the phone's screen for scanning at checkout.

Foursquare

Foursquare is much more exciting. Its not the first of it's type of service but it's not generally accepted to be the leader with the largest installed user base. Also an app downloaded to a smart phone (and also usable over the mobile web but not as good) - it's a geo-location app that allows customer's to "check in" at retail or other locations by tapping a button their phone screen. Once in you can see which of your friends is there or nearby and what they recommend you try there (it cleverly gets your friends from Facebook). Foursquare awards you badges (on the screen) for various achievements (earn the Newbie for your first check in). You can also become Mayor if you've checked in to a specific location more than anyone else.

It gets interesting when the local coffee shop elects to run campaigns against the customers checking in. Starbucks (USA) awards Mayors $1 off a frappuccino. All they need do is show their Mayor status on the phone to the barista. In fact - Starbucks have their own barista badge to be earned on Foursqare.

Domino's Pizza in the UK cited their use of these

types of Foursquare promotions as a leading driver of a 29% increase in pre-tax profits on July 12th this year.

Pepsi in the USA is also using Foursquare while developing its own proprietary platform called Pepsi Loot based on a form of Foursquare from Zumobi (where Eric Hertz - CEO of Two Degrees Mobile - was before he hit New Zealand). While it's Foursquare play seems solid - Pepsi Loot has been panned for being "Foursquare, minus the cool and built in incentives".

And in New Zealand ?

Foursquare is just over a year old and in March

had half a million users (globally) and 1 million venues registered. It's small. But it's growing fast - it hit 2 million users on 10th July this year (that's 100,000 new users per week) and pulled funding from Marc Andreessen (who invented Netscape all those years ago). Numbers are hard to come by but in New Zealand we estimate everyone has a phone and 2% have an iPhone while 9% have Blackberrys (Android's not really here yet). Also small.

Air New Zealand has been the first (again) to deploy a Foursquare offering. Mayors at our airports get Koru Lounge access or Airpoints Dollars - an excellent programme tie in. Air New Zealand beat the Intercontinental Hotels Group to market with IHG announcing last week that customers in its loyalty programme can also earn points for checking in at the hotel venues globally.

Foursquare is now integrated through Facebook Connect and last week announced tie up with Cardstar. After flashing their loyalty card bar code at the till customers can also check in to the retail venue.

Loyalty programmes have long aspired to be able to reward interactions as well as transactions. Transactions are generally discovered through the payments cycle. This is an example of interactions being rewarded inside the framework of the larger loyalty programme.