Articles from Loyalty Marketing Blog

Housing Woes May Lead to Lower Holiday Spending
2007-12-01 11:07:25
This may not come as a surprise to anybody, but the economic slowdown driven by the housing market and sub-prime mortgage market may have a significant impact on how much money consumer are expected to spend this holiday season. In a recent study, consumers reported that they will probably spend only 2% more than last year on holiday shopping, compared to much higher number in years past. There is an ongoing debate as to how this slump in consumer spending will affect high-end versus low-end retail. While I don’t have an answer to this question, I do think that there will be a significant decrease in purchases driven by consumer loyalty in lieu of more price-sensitive shopping. Loyalty marketers will face a tough time this holiday season. I think that consumer brand loyalty is a luxury that many consumers may not be able to afford this year. When economic times get tough, people who would spend more on their favorite consumer goods may look for cheaper options, indicating th ...

Are you more loyal to Eco-friendly companies?
2007-11-23 14:19:44
I recently read an interesting article about the correlation between consumer loyalty and eco-friendly brands. I think we all can agree that the ‘Green Movement’ is gaining popularity and changing the way we view consumer goods and Corporate America. While I personally believe in supporting the environment, I haven’t yet changed my consumption behavior to reflect my environmental beliefs. The article states that consumer advocacy and environmental groups are targeting even the most reputable brands with green boycotts if they don’t follow eco-friendly practices. Some of these business minds feel a company that isn’t managed with eco-sustainability in mind may not be inherently sustainable over the long-term. I don’t completely agree. Many companies have jumped on the Green bandwagon, especially large banks. Most large banks have embraced special credit cards with rewards that have a green focus believing they can benefit financially from the recent cr ...

Shopping Bag Gets Press
2007-11-15 19:42:11
I was searching on google for any type of news on rewards programs and came across a great article on EcommWire.com. It talks about Shopping Bag, which is a new software application by iBakeSale.com that gives members the ability to collect their cash-back rewards by going directly to any participating merchant’s website. Here’s headline quote from the article… “Shopping Bag makes shopping rewards appealing to larger audience - Frees users from affinity sites Getting rewards for online shopping is no longer limited to affinity websites because of www.getShoppingBag.com. Shopping Bag users can now search freely, shop and still collect cash rewards.” You can check out the rest of the article here. If you are interested in earning rewards in the easiest possible way when you shop online, then this is the way. ...

The Economics of Co-Branded Credit Cards
2007-11-11 19:23:56
Somebody recently asked me why an organization would opt for its own credit card. There are a few rewards programs out there that have done deals with large banks for their own co-branded cards. Many of you are familiar with co-branded cards in the form of a Visa or MasterCard for a favorite sports team, charity, alumni association, or large consumer rewards programs like Upromise and SchoolPop. The economics are pretty simple. An issuing bank (e.g. Bank of America, Citibank, Chase etc.) make money on a credit card usually around 2-3% of each purchase by a consumer. With a co-branded card deal, the bank usually shares part of the discount rate (usually around 1%) with the consumer organization. The banks also normally provide some money up-front for purposes of promoting the card to the organization’s membership. With these economics, that’s why many of you will see a 1% reward on your Upromise or SchoolPop credit card on every purchase you make. This is in fact the revenu ...

What’s The Deal with Debit Card Rewards?
2007-11-03 11:33:41
The Motley Fool recently reported that debit card rewards are measly compared to that on a credit card. The report doesn’t go into much detail but sheds light on the well-known fact that the banks that issue these cards make substantially less money on debit card transactions than they do on credit card transactions. On average a bank makes less than 1% on a debit card purchase and anywhere from 1-3% on a credit card purchase. This means that banks can afford to offer more rewards on credit cards than debit cards. This also means that banks have an obvious incentive to drive more spending on their credit cards than on their debit cards by offering higher rewards on credit than debit. This all boils down to the fact that no matter how much debit card holders kick and scream, they will never get any real rewards when they spend with their debit cards as long as the banks have to pay for those rewards. However, there is a solution. Introduce merchant-funded rewards. Here’s th ...

Affiliate Marketing is Booming
2007-10-31 23:28:01
In a recent report by E-Consultancy, affiliate marketing techniques have witnessed dramatic growth recently, with 78% of brands surveyed reporting that they will increase their investment in affiliate marketing over the next 2 years. This is incredible, even for an industry that has been growing dramatically since it’s inception over 10 years ago. The CEO of E-Consultancy references the decline of broadcast advertising as a boon for affiliate marketing and other performance-based marketing channels. Nearly one-quarter of those that are spending more reported having doubled their spending on the channel in the past two years. Two-thirds of respondents said that the number of sales generated by affiliate marketing has increased over the past two years, and 40% said they have more people employed to manage affiliate marketing than they did two years ago. Half of those expect this number to continue to grow over the next two years. Interestingly, the merchants surveyed site the main ...
Marketing

How important is the human touch in customer service?
2007-10-23 21:20:22
The Ken Blanchard Companies recently announced results of a study that shows passionate employees as the key component to a quality customer experience. This sounds like common sense to me. I’ve had some terrible experiences with customer service both online and offline. Companies are continuously trying to balance the value of a positive customer service interaction with the significant costs associate with it. There is no simple answer here. It comes down to corporate culture and values. I recently purchased something via iBakeSale (of course) from Drugstore.com and received free shipping since I spent over $24. So far so good. However, when I received my order, I realized that they forgot one of my items and sent me a completely different one by mistake. Things turned from bad to worse as I tried to contact customer service at Drugstore.com to explain the mix-up. The problem was that they didn’t make it easy to get in touch with them. I emailed the one customer service ...

Compare Rewards reviews iBakeSale.com
2007-10-17 11:31:52
I was recently approached by Compare Rewards, a well-known blog that focuses on rewards programs and the shopping rewards industry, to see if I would be interested in participating in a blog interview about iBakeSale, how it started, and how it is different from the multitude of other rewards programs on the market. If you’re interested in seeing her synopsis of iBakeSale.com, check that out here. If you would like to read the blog interview, you can find that by clicking on this link. Enjoy! ...

Engaging customers through social networking
2007-10-15 22:22:33
I recently saw an announcement that 1-800 Flowers was launching a new marketing strategy on Facebook to capitalize on the social networking phenomenon. I’m not 100% sure of everything the application does, but the major focus is on rewarding Facebook users for referring friends to the 1-800 Flowers website. The application also rewards their best customers for various activities on the social networking site. I think this is a great move for 1-800 Flowers. They are an incredibly innovative retailer and one of the first movers into the social networking space. There is an opportunity to engage Facebook users with their brand. I think that more and more companies will join the fray as they try to understand the social networking opportunity and how they can take advantage of it. Over time, Facebook users will likely become disenfranchised as more brands try to compete for their limited attention. But I think that until that happens, 1-800 Flowers will be see real benefits from enga ...

Can you build loyalty with extreme price-shoppers?
2007-10-11 19:17:41
In a study by the Yale School of Management, they analyzed the impact of extreme price-shoppers on retail profits, specifically focused on grocery stores. The study shows that extreme price-shoppers, which account for no more than 1.0% of total customers, are the largest drain on profits for any grocery store, but the aggregate impact to overall profits are minimal at around 0.2%. Furthermore, the study analyzes the personalities of extreme price-shoppers and places such individuals into 4 distinct categories: Spatials, Spatio-Temporals, Incidentals and Temporals. These sound like esoteric terms but can be simplified / distilled into the following definitions: Spatials - People who travel to multiple stores on a single shopping trip to seek-out the best deals Spatio-Temporal - People who go from store to store every time they shop to find the best deals Incidentals - People who don’t care about promotions and shop for convenience Temporals - People who go only to one store and ...

What is Wugging?
2007-10-05 22:43:12
This has to be the coolest made-up word I’ve ever heard. I stumbled across it on Wallet Mouth blog in a recent blog post. Wallet Mouth defines Wugging as follows: Wugging, or web-use giving, lets you raise money for do-gooder groups by shopping online and using search engines. Sound familiar? Sounds a lot like iBakeSale, my favorite online fundraising rewards program for local community causes. Other online companies that are wuggers include GoodSearch, which allows users to search the internet and donate search revenues to charities and schools, FreePledge, a shopping portal where you can donate shopping savings to charity, and SchoolPop, which allows users to shop and donate savings to schools across the country. I’ve never hear the word “Wugging” before but I think it will soon become one of my favorite words. It describes something near and dear to my heart, online giving. There are a myriad of companies that enable online giving through having consumers tak ...

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