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Web 2.0 and its impact on customer loyalty 2007-09-05 17:27:58 John Todor of The Whetstone Edge recently wrote a book called “Addicted Customers” that focused, in part, on Web 2.0 and its impact on loyalty marketing. While I did not read the whole thing cover to cover (sorry John), I was able to glean a few interesting take-aways. Web 2.0 means different things to different people. To some (including me), it means social networking sites like MySpace and Facebook. To others, it might just describe emerging technologies on the internet. From a marketers point of view, it is important to look at both definitions to figure out what the impact will be on consumers, their lifestyles, and their shopping preferences. Let’s start with my definition, social networks. As a marketer, social networks are communication channels between customers and potential customers. They are incredibly fast channels and probably the most effective at disseminating information to different people both directly and indirectly. For example, if I wish a frien ...

Rewards that pay your doctor’s bill… 2007-09-03 17:01:35 In a news release by Lifespring Health, a credit card and rewards provider, they recently announced a new credit card with an interesting rewards twist. As everybody knows, the cost of health-care and fitness activities have been going up and up with no true end in sight. Lifespring Health internalized this consumer dilemma and created a rewards program to go with their new credit card that enables cardholders to apply points they accumulate with the card to “health service, prescription, elective surgery, gym membership, wellness products, and contributions to Health Savings Accounts (HSA) and many other related services.” The problem as I see it is that the program only works with 275 online retailers. If you look at the demographic of people who worry about healthcare costs (45+ years old) and the demographic of avid online shoppers (<45 years old), there isn’t as much overlap as one might hope. Maybe I’m misreading the press release. If not, I don’t ...

BlogTipping - When are we going to tip? 2007-09-03 16:59:39 I was just contacted by a fellow marketing blogger over The Marketing Minute, Drew McLellan. He emailed me a link to a new post on the top blogs he enjoyed reading last month. I was pleasantly surprised to see that our blog was at the top of that list. You can check out the post here. Drew pointed out a few things he likes about our blog and one area for improvement. His points are well taken and I realize that I need to start linking more to other blogs that I reference in my posts. Thanks Drew for the great feedback! I’m so glad you (and many others) like what you’re reading here. Blog Soon, JT ...

Registered card technology hits the debit card market 2007-09-02 21:52:55 Thanks Again, a provider of rewards to consumers, recently announced that they are launching a service that allows consumers to register up to 5 debit cards with their service, turning every debit card into a rewards card. Their philosophy is refreshing and simple. People don’t want new cards in their wallet. They want more rewards on the same card. This philosophy is embraced by only a few players in the market, including OnCard Marketing. Most banks and retailers alike believe that consumers are going to want a new card because it carries their brand name. This is one type of loyalty strategy but one that is not that effective (or popular) with customers. Thanks Again offers members various currencies, predominantly airline miles, but include cash-back as one option. This is a great announcement because debit cards are the red-headed stepchild of the rewards industry. Since margins / profits are so low on debit cards for banks, it is simply unprofitable for them to offer any ki ...

Discounts - how low can we go? 2007-09-02 21:42:43 In a recent report by The Wise Marketer, it is noted that retail discounts may be at an all-time high, raising concern over the future of shopping discounts. Basically, retailers are offering more and deeper discounts than ever and are desperate to find solutions that will attract repeat customers without giving away all their margins. The story indicates that retailers are taking a harder look at loyalty programs and other ways to engage customers without discounting. In marketing speak, retailers are trying to find a way to steer customers away from discounts without losing loyalty. This may be tougher than you think. The benefits of a good loyalty program are numerous and include things like, rich customer data, one-to-one communications, selective promotions, just to name a few. However, with anything in life, there is the “right” way to launch a loyalty program and a “wrong” way. Many retailers are hasty and launch programs that are well-disguised discounti ...

New York Times cancels rewards program 2007-09-01 12:59:36 In a recent email from the New York Times, they announced that they are closing the doors on their recently launched rewards program called Times Points. This program can be no more than a year old, and they notified members that they will be ending the program on December 15, 2007. While I have no insider specifics as to why they are terminating the program, I will try to shed some light on the factors that may have lead up to this decision. For starters, Times Points is a free program for any consumer to join. You don’t have to be a subscriber. The points you accumulate from dining and shopping at participating merchants can be redeemed for standard things like a NYT subscription or a variety of gift cards etc. Now where did Times Points come from? Well, Times Points was created out of two different partnerships. The first was a partnership between Rewards Network and the NYT. Rewards Network is a publicly traded rewards program that focuses exclusively on restaurants. Reward N ...

McDonald’s will offer rewards to Upromise members 2007-08-31 09:53:05 In a recent report by CardLine, Upromise & McDonald’s will reward gift card purchases made by customers. Upromise and McDonald’s will offer customers rewards for buying McDonald’s gift certificates and prepaid cards: 1 percent of the purchase price for registering the cards and certificates. On the McDonald’s re-loadable Arch Card, 1 percent will be applied to both preloads and reloads. This is a big win for both parties. The way the deal probably shook out, McDonald’s will be paying Upromise around 3% of each gift card or Arch Card Refill amount. Upromise will keep 2% as their affiliate marketing fee and will give the end-user 1% back, which will be applied towards college savings in their Upromise 529 plan. McDonald’s was smart to offer the cash-back only on prepaid cards and not for in-store meal purchases for one simple reason. McDonald’s is a high frequency and low margin business when it comes to food. The biggest margins for them are on prepaid car ...

Charities using mobile marketing 2007-08-29 09:09:56 The Non-Profit Times just announced in their weekly newsletter that a few non-profits are starting to use mobile marketing to communicate with consumers. The amazing thing is that it is not limited to text messaging. They refer to this initiative as the new-age affinity credit card that rocked the credit card market about 20 years ago. Only a few of the largest non-profits adopted their own affinity credit card, however, due to the large membership numbers required to make the program profitable for the card companies. With mobile marketing, any size organization can benefit. The major benefits are pretty clear from a loyalty perspective: -Stay in touch with donors more frequently -Attract and appeal to younger donor base -Customized phones branded with non-profit logos -Phone software chock full or customized ring tones and news Practically speaking, I’m not sure how many people are going to adopt these phones, since it’s hard for people to decide which charity to choose a ... Marketing

iBakeSale rolls out new merchant names 2007-08-24 23:35:46 This past week, iBakeSale.com launched two hundred additional top-tier brands to their online mall. Names such as Best Buy, GAP, Old Navy, Zappos, Sephora, Brooks Brothers, PetCo and many others. This is a great announcement from iBakeSale.com because it brings their top-name brands up to about 450 of the best online retailers. This should hopefully give members greater choices of where to shop and save, thereby allowing them to donate more savings to important causes. To see the expanded merchant list, click here. ...

Loyalty program sign-up via kiosk? 2007-08-21 23:42:08 In an article by The Wise Marketer last week, Pay By Touch announced plans to roll out kiosks with a variety of retail clients that will rapidly enroll customers in their loyalty programs. Pay By Touch, the biometric payments provider, is piloting its ‘Rapid Enrol’ kiosk with retailers in specific geographic regions, namely NY, New England, Wisconsin and Florida. This is obviously useful for retailers, who can eliminate tiresome paper trails and data entry for consumers with the new electronic enrollment. Plus, electronic enrollment is easier for customers and will most likely yield greater customer sign-ups. The interesting take-away is that Pay By Touch, which has developed a brand name in the marketplace with biometric payments at the point-of-sale with fingerprint recognition tied to credit cards, is going down the road of a seemingly unrelated business with kiosks. I’m not sure how this business will benefit Pay By Touch in the short term, given the cost-intensiv ...

Citibank offers new cash-back rewards 2007-08-21 23:08:51 Last week, Citigroup announced that it was launching a new cash-back credit card called CashReturns Card that offers cardholders unlimited cash-back. The big improvement over ordinary cash-back programs is that they will automatically write a check for the cash-back over $50 without the cardholder having to request it. This is in lieu of the $300 maximum cash-back most cards allow members to earn each year. The interesting twist to this card is that they have reduced the % back on each purchase to 1% in order to offer unlimited cash-back. By reducing the percentage from 2% to 1% and eliminating the 5% on gas and convenience purchases, Citi has basically made it impossible for an average spender to exceed the traditional $300 cash-back limit they removed. But in the process of reducing the cash-back percentage, they are able to create one rule for people instead of various tiers. The gurus at Citi must have seen the Capital One commercials and taken notice. The main implication of this ...

How lucky are college students? 2007-08-21 15:14:16 In another interesting write-up by the guys at The Wise Marketer, it might not seem surprising that many students (almost half) receive funding from their baby-boomer parents. I can’t knock this because I was certainly the recipient of a generous dose of parental support. Nevertheless, it shows that based on a recent study, about 50% of all college-age girls and 46% of boys are funded by parents. At first glance, that should be a great statistic for any retailer looking to target the student market. Traditionally, students have been thought of as spend-thrifts, young adults who have no money of their own and are scraping by on student loans and part-time jobs. While this is true to a substantial portion of college students, many students have sufficient discretionary income in the form of allowance to spend as they like. One fact of the study which may make retailers cringe is that most of the $300 dollars a month that a parent-funded college student receives is actually put in t ...

Rewards that recycle… 2007-08-17 01:09:49 I just came across this interesting article on The Wise Marketer this week that mentioned a company called RecycleBank, a US-based consumer rewards program that motivates people to recycle. This is a great idea. I would summarize their mission as Rewards for Good. Environmental issues are at the forefront of the political scene with issues such as pollution, global warming, deforestation, among others taking the spotlight. RecycleBank has found tremendous interest by public interest groups and governmental bodies who want to promote more environmentally-conscious consumerism. I’m not exactly sure how they make money as a for-profit organization, but the basis for their business model is very compelling. They use a weight system whereby garbage collectors weight recycled materials and then reward the individual or family with a certain number of RecycleBank “dollars,” which can be redeemed for incentives at a large network of retailers participating in the system. I th ...

Seth was published in iMediaConnection.com 2007-08-15 03:00:46 My partner, Seth Sarelson, was published yet again in a well-regarded online marketing publication called imediaconnection. After much follow-up and persistence from our killer PR team, imediaconnection has published Seth’s piece on Coca-Cola’s rewards program. It’s also got a killer mug-shot. Check out the full article by clicking here. Congrats Seth! ...

Cellphone rewards? 2007-08-15 02:56:53 In another report by the guys at COLLOQUY, found here, there are rumblings that cell phone carriers might look more carefully at a type of loyalty or rewards program for heavy mobile users. While this is news to me, heavy cell phone users are expressing widespread interest in a cellphone loyalty program to reward them for their usage. Currently, these heavy users (i.e. most profitable customers) feel a bit neglected and “unappreciated” by the large carriers, the report claims. I think this would be a brilliant idea to institute a loyalty scheme for all cell phone users, not just the heavy users. It is amazing that the guys at Cingular/AT&T and Verizon haven’t thought of this yet. The loyalty options are limitless and could be applied to drive usage of text messaging or cellphone gaming etc. The carriers seem to be late to the loyalty game and need to start thinking of what increased loyalty could do for their customer churn and up-selling and cross-selling of prod ...