Category: Offer Development

DO POINTS PROGRAMS ADD UP TO RELEVANCE AND ENGAGEMENT?

As one of the sponsors of the Loyalty 360 Expo in Orlando this year, our strategy team was there in force – looking and listening for innovation, trends and best practices.

While mobile, referral, and geo targeting are cutting impressive new paths that cross into this space and customer experience and segmentation disciplines are maturing to gold standards, for me, one of the biggest trends may in fact be a fundamental shift in loyalty itself is taking place. That is that loyalty, when defined as a hard-line program of points building or quid-pro-quo behavior, is not a big growth area for most marketers.

Most of the dialogue and information at the Expo surfaced more debate than conclusion about what Loyalty was, let alone any trends clear growth opportunities. Some themes, however, ran through many conversations – and are areas that have been of great focus for us here at SolutionSet.

Those themes were the ideas of:
1. Engagement
2. Relevance

In essence, companies are running programs that achieve these things under a title of “Loyalty”. GameStop’s program was self described as more “CRM titled as Loyalty”. At Starbucks, points accumulation was is a good component of their program, but really only covers about a third of the overall relevance (monetary value customers gain). Their program also tied in community and recognition, which were arguably more emotional, compelling, and uniquely ownable for their brand.

The innovative new social and mobile developments are also pointing more to the ideas of “people like me” than “earn points to redeem”.

As our CEO, Zain Raj, has pointed out in his blog, traditional Loyalty programs are really just frequency programs. As I reflect on the term “Loyalty”, it also strikes me as a very company-centered, not consumer-centered term. It doesn’t seem to cut it with regard to talking about what this stuff is.

My suggestion is “Brand Fan Programs” – the effort to surface and exploit those attributes inherent in a brand and offerings that resonate with a customer group such that we can drive unique levels of relevance and engagement.

As with facebook, fanning should be measurable – and in a way more in tune with these efforts. Fans should have a lifetime value that can be maxed, referral and influence value that can be tallied, data profile completes that can be totaled, spend for return that can be optimized. The behavior, term and measure seem to fit – and fit with the important activities that make them happen: relevance and engagement.

It could be that the best course for a given brand is a more singular focus on a standards points/rewards programs (aka: Frequency Program), and that’s fine. I believe that there is greater opportunity at the higher relevance and engagement end of the scale, building a “Brand Fan Program” for our clients.

When is the last time you saw something advertised as being “FREE” and believed there was any real value there?

Thoughts like “you get what you pay for,” “what’s the catch?,” or “let me read the 5-point font disclaimers to get the real story,” probably went through your mind.

You’re not alone.

Consumers are growing immune to “FREE OFFERS.” The term FREE is overused, typically overpromises and consumers are just over it! Mistreatment of the term FREE with bait and switch gimmicks that end up requiring an actual purchase has eroded consumer trust in this term. Plus, FREE offers most often serve to cheapen your brand; if you can afford to provide a product or service for free then it must not be of any value anyway.

Let it go. Give it a rest. Set your FREE OFFERS free.

In this age of the “New Normal,” consumers are craving VALUE and their perception becomes reality. So, how do we get consumers to perceive value?

It’s all in how you frame your offer. At Getmembers.com, we spend a great deal of time each day working with our clients to craft value-driven offers that drive strong results. We have learned that positioning introductory offers as a purchase for less than face value really stimulates demand. For example, an offer of “$20 for $50 worth of personal training” has real value because the consumer is clearly buying more for less. This is perceived as being no different than exchanging a $20 bill for a crisp, new $50 bill. Equally as important, this offer protects your brand value because your new client will be getting training which they still value at $50 as opposed to $0. And assuming you deliver a satisfying, sweat-producing training session that leaves your new clients wanting more, they will more likely sign up for future training packages at a higher price that will support your desired profit margins.

Another value driver is the word “unlimited.” What a great concept. It implies no limits and no rules and can be yours for just one value-set price. It’s the new “all you can eat.” Look at the success Netflix is having with its unlimited monthly rentals versus Blockbuster’s a la carte rental model. “Unlimited for one month” makes a great introductory offer that gives your new clients time to get hooked on your products or services and then purchase going forward at your regular rates. And don’t worry about being at risk for “unlimited” use – having eyes bigger than our stomachs, we all bite off more than we can chew. Consider the offer “unlimited boot camp classes for only $19/week,” versus the overused, traditional “free week of boot camp classes.” With the unlimited offer, you are establishing your classes as having greater value than those being offered for free plus you are still collecting $19.

Take this free advice: Consumers know that nothing worthwhile is free. The value in this lesson is unlimited.

In today’s sluggish economy, a good offer requires thought and creativity. Gone are the days of 10 to 15% off. Many businesses are competing for a smaller pool of spending consumers. As a result, leading companies and businesses are turning to strategies that create more compelling offers.

Offers are intended to increase or boost response. They must be meaningful and provide value to the targeted consumer. Also, a solid call to action date gets the consumer motivated to act sooner rather than later.

Multiple offers

Multiple offers are now combined on the same direct mail piece. This strategy is designed to provide value to a wider range of consumers. If one of the offers on the direct mail does not apply to a consumer, the second or third offer may be the one that drives the sale.

Be aggressive with offers

Which sounds better to a consumer 15% off or 78% off children’s dental services? How about offers like “Up to 63% off Facial Treatments” or “$50 worth of pizza for $25”? Offers that are stronger to the consumer are inclined to provide more activity.

Shorter call-to-action periods

In today’s economy, it is not necessary to provide consumers with 30 days time to act on an offer. The goal is to drive traffic as quickly as possible, right? Consider offers with limited windows - remember Black Friday or Cyber Monday? Offers of “One day only” or perhaps “This weekend only” can drive significant consumer traffic by compelling them to act now rather than later. Today’s consumers are searching for the best values that meet their needs. Companies who utilize direct mail regularly develop short call to action periods with great success.

Picture this: It’s the first of the month. Your highly qualified prospects just received your attention-getting postcard in the mail. The postcard brilliantly showcases your latest fabulous offer that promises wide appeal and strong response. The offer is good all the way until the end of the month…about four weeks away.

Answer this: Do you think you’re doing your prospects a favor by giving them a long window in which to respond? More importantly, do you think you’re setting yourself up for the strongest results by enabling such a long and drawn out expiration?

The answer to both questions is most certainly NO.

Your prospects are busy people with lives full of innumerable distractions. If you’ve caught their interest, why give them time to act? Time is not your friend. Let’s think of all that can happen in 4 weeks: Prospects can change their mind after giving the promotion more thought, misplace their postcard in a drawer full of other discarded postcards they meant to act on, be exposed to a competitor’s attractive offer, or most likely just plain old forget. If you’ve got your prospects’ interest you must make them act on it and quickly.

Hence, the attraction of the “One Day Sale,” as in there is only ONE DAY TO REDEEM your latest, fabulous offer. Only one day? Now your prospects MUST act if they’re going to benefit from your attractive deal. And quickly. The urgency required to act on your promotion will drive swift, voluminous response. Not only will this kick-start your cash flow earlier in the month, it will free you up to start focusing on your next blockbuster One Day Sale…that could be scheduled for as early as the following week. Our clients have experienced record results with our recent Black Friday and New Year’s Day sales. Scheduling One-Day Sales on memorable calendar dates can also help drive greater response. Clients have reported huge windfalls on sales held this past 1-11-11 (over 6% direct mail response rates!) and you can bet we’ve got planning already underway for our clients’ blowout 11-11-11 sales.

Does a One Day Sale sound too restrictive to you? We’ve had success with Two- and Three-Day Sales as well. The key, of course, is only offering a super-short duration. Still not a believer in the magic of urgency? Consider the success of newcomer Groupon and its fellow category competitors offering one-day-only online deals. Their models revolve around “Today’s Deal” – not “This Week’s” or “This Month’s” deal.” You want the deal? Commit today.

Everyone wants a deal. Everybody loves a sale. And anyone can innocently forget anything over time.

Driving a sense of urgency in your marketing will get your prospects motivated to drive over to your business, which in turn will drive up your profits.

Let’s address the elephant in the conference room. Everyone’s talking about apps, social and email, especially brick and mortar businesses looking to get ahead in the online world. You’d be crazy not to. But here’s a little secret: Direct channels can be just as powerful for the “traditional” online-only business. Yes, even today.

According to last year’s Channel Preference Study by ExactTarget, direct mail influenced 76% of Internet users to buy a product or service online. As our own Jeremy Gustafson recently pointed out, research suggests that online shoppers who receive a catalog in the mail spend 163% more (on average) than those who don’t.

We’ve seen it time and again with many of our own clients, most recently Tiny Prints. Here are a few of the tactics that truly pan out:

Multiple formats. Keep things fresh. People tune out when they see the same old thing. This holiday season, we’ll be delighting Tiny Prints’ customers with multiple formats including a mailer and a catalog.

Short and sweet vanity URLs. Take customers to a destination landing pages with an easy-to-type URL. It’ll give you a great way to track traffic while providing customers with the exact content they came to find. Imagine trying to direct people to various mile-long links for Christmas cards, party invitations and photo books. Yikes.

Personalization. Take the opportunity to talk to customers, but do it in a way that reinforces your brand. For our catalog’s front cover, we added the customer’s name to an actual card design. It was an attention-grabbing way to introduce the offer, and it showed how a real product could be customized.

Sweet offers—that expire. Give your customers something they want. For our first touch, Tiny Prints created a steep offer for early bird shoppers that had a limited window to create a sense of urgency. Initial positive experiences are crucial to getting the word out over social channels throughout the holiday season.

A word to the wise: Once a prospect or returning customer arrives at your website, be ready to deliver. The Tiny Prints brand promise is strong, combining the thickest, most luxurious cardstock in the industry with unique designs, premium printing and exceptional service—and they deliver on it. Can you say the same?

Visit your favorite big box or grocery store online to find special offers available at your nearest stores and print coupons to use during your next visit. Simply type in your ZIP code and you have the same deals from the free-standing inserts (FSIs) found in your Sunday paper.

Now for the fun part: We’ve launched a turn-key solution for creating electronic FSIs that attract customers to local retail stores or to your site. We’re not talking about just uploading a PDF. We’re talking about creating elegant, interactive environments to advertise multiple products, complete with 360-degree product views and videos to highlight specific features. Customers can print coupons, save products to a wish list, and email themselves both to use later. We make it easy to update text and images, too. To learn more about the eFSI and to arrange a demo, email business@solutionset.com

The barometer for consumer spending attitudes might be tucked away in your wallet or purse right now. Sandra M. Jones of the Chicago Tribune reported that Americans have rediscovered coupons in 2009, with a projected 3.2 billion redemptions. That represents a 20 percent jump from 2008 and the first year-over-year increase since 1992.

While newspaper circulars account for 90 percent of the coupons distributed and more than half of those redeemed, the web is quickly becoming the next frontier for spendthrift consumers. From the article:

Searches on Google for “printable coupons” and “online printable coupons” more than doubled this year, and Yahoo, Inc. reported that “coupons” ranked first on its list of economy-related searches for 2009. Of consumers surveyed by the National Retail Federation, 42 percent said they plan to use a coupon for their holiday shopping.

At Coupons.com, one of the first and largest online coupon sites, consumers printed coupons worth $313 million in 2008. The site surpassed the 2008 annual figure in June 2009 and expects a total of $1 billion in printed coupon savings by the end of the year.

It doesn’t take much head scratching to figure out why coupons have become all the rage. But what retailers and manufacturers should learn from this trend is that 2010 might be the perfect year to readdress customer loyalty programs.

Are your print and in-store promotions prompting customers to sign up for email and mobile marketing streams? Have these segments been rewarded with a measured flow of value-first content?

Ultimately you want your customers to have category tunnel vision, where it’s your products or bust. And a strong loyalty program could help get you to this point.

One parting thought: If a third-party site is the primary source for your coupons, why not create (and promote!) a dedicated coupon corner on your own site? Keeps them that much closer to the point of purchase.

French fries. Gnocchi. Kugel. Pierogi. Europeans love them some potato. But it wasn’t long ago when this Peruvian import was viewed as hog feed that caused leprosy in humans.

This all changed thanks to research and savvy marketing by the French scientist Antoine-Augustin Parmentier. It was the mid-18th century and Parmentier was serving as an army pharmacist in the Seven Years’ War. The Prussians captured the big thinker and forced him to eat potatoes. He survived (with all limbs and digits intact) and returned to France determined to promote the potato as a viable food source.

Parmentier conducted experiments that proved potatoes were nourishing and helped cure dysenteric patients. He was showered with praises and awards from the scientific community. The French Parliament even lifted the national ban on potato cultivation. Yet his countrymen couldn’t seem to shake the hog feed stigma and continued in their non-potato eating ways.

When support from the government and academia failed his efforts, Parmentier turned to marketing. He hosted dinners for dignitaries (including Benjamin Franklin) with potato dishes proudly served. He delivered beautiful bouquets of potato blossoms to the King and Queen. But perhaps his most ingenious tactic was placing guards around his potato patch with explicit instructions to accept all bribes and look the other way when people tried to steal the crop.

Parmentier understood the basic human condition and marketed against our weaknesses. He sought celebrity endorsements, influenced the influencers, and created a high perceived value among consumers. After the potato saved France from famine in 1785 and 1795, the hearty tuber officially made the jump from feared to revered.

So the next time you order steak frites, take a moment to thank Monsieur Parmentier.

[Source: Wikipedia]

Free operating systems. Free content. Free apps. Free email. Free hosting. In an article published on Fast Company, author Farhad Manjoo questions the merits of the business model that dominates the web:

Why? Because free costs too much, weighed down with hassles that you’ll happily pay a little to do without. That’s why people buy bottled water and cable TV. That’s also the model that The Wall Street Journal uses to goad people into paying for news online. Anyone can read its stories for free through Google or a news-aggregation site like Digg, but people who want the full newspaper experience pay $103 a year for the privilege. More than a million subscribers consider that a good deal.

Manjoo notes customers understand that responsibility for product quality is only truly passed when money changes hands. If a free iPhone app is busted, you’re not too terribly surprised and will just delete it. If a $4.99 app is busted, you’re ready to write an angry letter. It’s all about expectations. If you can justify a cost with a promise of quality and support, then why mingle with the businesses in the free pool that can’t? Read the full article.

KFC wanted America to focus off the fryers and sample their new grilled chicken. An “Unthink KFC” TV campaign aired. Restaurant signage was hung. And then they brought in Oprah (aka the grand hen of promotion) to announce this finger-licking offer: Two free pieces of grilled chicken, two sides and a biscuit to anyone who downloaded a coupon within a two-day period. Emily Bryson York of Ad Age gives a chronology of how this offer spun out of control:

KFC’s offer sent the chain skyrocketing to the No. 1 topic on Twitter. By Wednesday, blogs began reporting “riots” at New York City KFCs. On Thursday, local news crews interviewed fuming customers getting turned away in other markets, including Chicago. Consumers complained about rude service, and media complained about a PR team that seemed asleep at the wheel. By Friday, the day after KFC pulled the promotion.

Big giveaways don’t always crash and burn. Denny’s announced a free Grand Slam breakfast promotion during the Super Bowl and came out big winners. Bryson York chatted with John Dillon, VP of marketing at Denny’s, about the right way to hold an orderly giveaway:

Communicate, communicate and then communicate some more: Denny’s executives toured the restaurant system, talking to franchisees and staff about the coming promotion. They also held town-hall meetings to share ideas.

Energize the staff. Happy front-of-the-house folks are a critical component to a positive guest experience. Denny’s goosed enthusiasm among wait staff with its first-ever Super Bowl ad.

Keep it simple. Make the offer clear and easy to understand. Hold it on one day and within a set timeframe. And make sure it supports an overarching brand strategy.

Pray for the best but prepare for the worst. “We did as much modeling as we could to plan through different scenarios,” Mr. Dillon said. “But at the end of the day, you don’t know what to expect.” Before the event, Denny’s shipped thousands of rain-check coupons to its restaurants, just in case.

Don’t hurry, or don’t do it. Denny’s planned its giveaway months in advance, and it took different forms throughout the process. But the planning paid off. “We heard of a couple of restaurants that ran out of syrup,” he said.

Giveaways are an excellent way to get buzz and foot traffic. Just be prepared for both.