Tag Archives: Loyalty

American Express Taps Into A Legendary Community?

All brands are looking for ways to tap into large communities.  In some cases, it is simple enough to buy your way in through advertising, sponsorship or promotions. In some, there’s a number of hurdles a company would have to jump through in order to associate themselves with that coveted community.  Imagine working to tap into a highly-coveted group of 30+ million millennials who are part of a passionate community that has defied normal convention by building via social and word of mouth.  It’s no longer hard to imagine as Riot Games is allowing American Express to tap into their League Of Legends community with branded pre-paid Amex cards.

AmexLeague

 

While American Express did create a co-branded card for a program with Zynga in Spring of 2012, many would argue that Zynga’s games were open to such intrusion of branding since corporate logos had been incorporated into gameplay since the beginning.  We don’t even know how successful that program was and how many points were recorded through the branded cards. A relationship with Riot is completely different and exciting.

Riot differs from Zynga in that they have not incorporated logos into their actual gameplay.  There is brand incorporation via sponsorship of their competitive eSports teams – where teams of five get together to compete in round-robin tournaments for major prizes and international coverage. But that’s almost an entirely different experience than the 5 million-plus daily players experience. In effect, Riot is taking a big risk here as such a large corporate partnership could possibly lose favor among the deeply entrenched players – those who are more interested in an unblemished world.

Something that Riot has done extremely well is build on the idea that it is created by gamers for gamers. As such, there is a community pride in the fact that you could play a very long time without spending a dime, so therefore, they are willing to put some money in (a lot of money in) to enhance their experience.  But, that “consumerism” is all in the spirit of gameplay and community.

Will this partnership turn on deaf ears – even with loyalty rewards being offered? Or, will this be a huge play for penetration into the highly-sought millennial market? That is where the excitement comes in.

If American Express is able to penetrate this community, it would be a huge win for them as they attempt to increase brand awareness and loyalty for a finance firm that traditionally plays to much older audiences. It will be interesting to see how it all plays out and whether they tap in or trip out.

Hotels Working Hard To Connect The Dots on Young Loyalty

USA Today filed a report on hotels and their “new” quest to engage teens and pre-teens with programming and other benefits to build early hotel loyalty. The quest is all fine and good, but USAT assumes that the marketing is specific to the teens, when the real recipient is the parent.  When you look at the samples of activities, they didn’t really make sense as marketing tools to kids – but they might make sense to draw their parents to their properties.  The biggest issue is that it seems the hotel operators might not have their finger on the pulse of what their teen and pre-teen prospective consumers would even be drawn to. It’s good to look for ways to build brand loyalty – especially with young consumers – but you can’t build that loyalty with confusion about who you need to connect with.

The article recounts a few of the offerings that have recently been launched by some hotel chains. What the article doesn’t do is cover how these features are marketed. If there is no specific marketing strategy for these offerings, then too much is left to chance – making the offerings less effective. But, let’s just say that the offerings were marketed through specific media or even as part of their CRM or email communications. You still have to question who (and when) the target is for some of these offerings:

  • At select Omni Hotel locations, a “Teen Connection” program has been launched where the teen-aged guests can communicate with a Teen Concierge through Twitter, Facebook, e-mail, or text. Besides the obvious question of “why don’t you just go downstairs and speak face-to-face with someone?”,  I question how much business (or loyalty) will be generated for something so specific. If, as a teen, I had connectivity – which should be paramount – I would be communicating with friends not rushing to communicate with a stranger about things I would need permission from parents in order to actually do it. Since the marketing would be toward parents, would parents want their kids to be asking for reccos through social?  Maybe they would feel more comfortable that it is from a more substantial (i.e. hotel) source, but again, why not go down to the lobby to ask someone? Which leads to the bigger concern about the Teen Concierge idea.  As a parent, do I want an 18 year-old to be a concierge telling my son or daughter to go see a rock show at the Beacon or skateboard through Central Park when I am visiting New York City? David Strebel, the teen concierge at Omni Berkshire in Manhattan gave those examples of what he would offer. While those suggestions are borderline fine options for  teens who know the city well, as a parent, I’m not so happy about the argument that is probably going to happen when I tell my kid they can’t do what the cool guy at Teen Concierge got them to set their mind on.
  • Hyatt has rolled out their “For Kids by Kids” menu and it seems like it makes the parents happy due to its healthier options.  But, the concept of “by” is an interesting one as it seems the menu was only “approved by a group of young taste-testers.” To be upset about the lack of offerings like  “curried shrimp lettuce wraps” on a kids menu could just as easily be appeased by hotels in offering child-sized portions (and costs) of the regular menu items. But, again, there is confusion as teens are not the sweet spot for children’s menus.  Most children’s menus are targeted at 12 (at the high-end) and under with many targeting even younger. Maybe another solution is to rethink some menu options entirely to more strongly relate to their target audience. Maybe the rethinking leads to a couple of items on the menu that are healthy, but are more of a “grazing” type of offering – where young adults can lay around and idly eat healthy foods like crudite, crackers and tuna or chicken salad, etc.
  • Some real head scratchers are Sofitel’s French Language TV station, Tivi5MONDE, for children under 13 and the Ritz-Carlton Orlando Grande Lakes teen massage and facials. What’s the audience size for kids under 13 who want to watch something in French and are teens really that interested in spa treatments as a progenitor or loyalty? The Ritz offering might make perfect sense due to its overall demographic, but the loyalty they have going has very little to do with how kids are treated.  In fact, there are many who stay at such hotels that would prefer there were not pre-teens or teens running around…

We’re not even dealing with Tyson’s Corner Marriott’s belief that American Girl packages with free viewings of American Girl’s McKenna Shoots for the Stars are perfect for pre-teens and teens.  American Girls’ target is considerably younger than that demo.

It could all come down to how the writer, Nancy Trejos, framed the story as attempts to target and draw in those demos. It seems that the examples either over think the target or don’t really address them.  One commenter on the article succinctly stated that “the best way to keep teen guests content – offer free wi-fi.”

Obviously, the best way to provide loyalty is to offer great experiences without being too gimmicky. As the adults are usually (hopefully) the ones making the decisions, the effect the offspring have is based on their content and how much they enjoyed things.  So, there are probably inexpensive ways to convey to parents that there are great offerings for the kids to allow for sampling and, based on good experiences, many happy returns.

The low-hanging fruit is for hotels that are heavily used for business travelers.  By way of CRM programs and booking confirmation emails, they can easily include a little blurb inviting those business travellers to bring their families along. They can work on programs that make travel for children, pre-teens and teens more comfortable.  And, there are things that can provide a sense of security and comfort for the parents.  Maybe its just having a late-afternoon kids and teens “only” reception in a part of the hotel restaurant where healthy choice foods and fun activities are provided at no extra charge.  Maybe its in the form of borrowable MP3 players that have music that conveys the spirit of the city they are visiting.  Obviously, there are so many more options – all with different degrees of difficulty.

The thing is, a lot of what was listed seemed like it was from some ideal story of teens who visit the Waldorf-Astoria and take it over. While it might seem exciting to talk about QR codes and healthy choice education in order to get press coverage, the results are what matter and the ones shown just don’t seem to do the trick.

If you want to target a certain demo, you’ve got to know who they are, what they want and then deliver on that.  But that’s not all… You’ve also got to be clear in how you’re going to communicate it.  You’ve got to make sure you’re communicating clearly to the people who really matter.  In this case, is the kids that the initial communication needs to happen with?  No.  It’s the decision makers – who happen to be the parents. And ultimately, it doesn’t matter how much the parent’s love an idea of something, f the child doesn’t like it, there will be problems.  The challenge is in connecting the dots – or at least leaving the right breadcrumbs to draw target demos to your product and generate loyalty.

Developing The “Concept Car” Of Digital Marketing

The Los Angeles Auto Show just rolled through and there were a few concept cars being shown.  They weren’t as far-out or exciting as the fantastical concept cars I remember from the past.  Some were not really true concept cars, but just a year or two away from production.  Some bystanders were swearing to the fact that BMW’s i series would actually not change much prior to production – glass sides and all.  In the past, you would look at concept cars and guess what components would actually make it to the car dealer lots.  In the case of Digital Marketing, we can rely on the innovation of the larger companies to derive the same knowledge and foresight.  Perhaps Kraft’s innovations can serve as our “concept cars” to derive the future from.

Kraft has always been good at taking chances in bringing things to the market.  One of my favorites of theirs was an early iPad App, Big Fork Little Fork.  It was perfect for the medium and was also one of the first native Apps out of the gate.  At the beginning of this year, Kraft introduced their Meal Planning Solution that they developed with Intel.  Here is a video conveying its main features:

When this was released, they were pitching it to a number of grocery chains with the promise they were going to roll out wide.  From my understanding, they might have only reached a few test locations.  8-9 months later and they’re nowhere to be seen.  Perhaps they were too big and costly.  Perhaps they couldn’t secure enough placements to bring the per/unit costs down.  Perhaps grocers did not want to have such a large semi-permanent footprint for one company (an installation that reduced the threat of moving the company’s items from an end cap to the bottom shelf…) I’m sure there’s numerous reasons why we’re not seeing the cool kiosks all over the place.

But, there were a number of great elements they developed that could provide solid opportunities if used on their own – with or without changes.

  • The ability to interact with the screen was good, but the multitude of steps and choices were a bit too involved/complicated for my tastes.  So many selections to go through in an environment that usually doesn’t allow for mulling around brought somewhat limited rewards.  But, if there were quick responses or activities based on reading your loyalty card code – basing suggestions on previous purchasing habits or not – that could be cool.
  • The provision of samples is also a strong plus.  It allows brands to distribute samples with descriptive text or videos without having to pay or train a person.  Additionally, there’s a stronger defense against loss due to the fact that you can control how many pieces a user gets based on the requirement that they swipe a loyalty card.  It’s also a nice additional incentive to sign up for the loyalty card.
  • The seasonal theming via video/digital is a nice touch.  There are in-store solutions like PRN to provide seasonal elements like this, but those experience are usually at the end of the shopping and not before it – where you can influence purchase better.
  • Menu options are nice as well, but they need to be quick and then perhaps coupons should come with it for the multiple ingredients.
  • Their interface with Kraft’s shop assist app was a nice touch, but if users don’t have that, it requires even more time for download.  Could there be a more generic form of adding to the shopping list?  It could even be sent via bluetooth so the customer at least has the list and perhaps coupons on their phone.
  • The video capture is nice to get the basics of demo without asking for it and then capturing use patterns across all users.  I just think that having the user manipulate the photos is a bit of a waste of time – again, we don’t go to the grocery store to mess around.  It is one more thing to add time to the experience and you really want to process users through as quickly as possible.  If there’s a line, most people won’t even bother. The interesting thing is that much of the buzz in January was that the camera would scan your face and figure out what you want to eat.  I think some bloggers were misreading the technology as Kraft or Intel did not present this auto decision maker as part of their program.  From my understanding, it was just for recognition and tracking.  How wierd to think that a computer would deduce what you want to eat just from scanning your face…

Perhaps the best future solution doesn’t even stand in Kraft’s court.  Maybe this kiosk is a sound solution for a third-party to place in the stores so that brands can book time/representation and the stores can get a piece of the profits.  Maybe strong elements of this are presented in a way without the kiosk – perhaps through marrying a bluetooth or Near Field Communications execution with a loyalty program would allow specials to be sent to your mobile when you enter the store so that you can view as you are moving through the store.  To save the sample solution, there could be a distribution box that is triggered by scanning whatever was sent to your mobile as you walked in the door.

Perhaps I’m riffing on Kraft’s concept and laying the groundwork for a succesful company of the future… The reality is that technology is not linear and much like the auto industry puts out a whole concept and then pulls parts from it or uses the concept to inspire their designers, we marketers should be looking to do the same.  Yes, we may come up with some bombs or cool products that might be “too soon,” but to not look smartly for innovation is lame. Just as we can learn from everything, we can pull pieces apart and engineer them in different – hopefully better – ways. Who knows how todays concepts will turn into reality and change our world?

Warning! Budget Advertising May Induce Claymation Vomit

Sometimes, you come across campaigns that are so hard to believe because they are to true to their company’s core. A campaign by an Amsterdam hostel, The Hans Brinker Budget Hotel, seems more like a joke than a true marketing presence.  There’s been many fictitious campaigns that reveal in the end that the location was actually an entry point to show off the trailer.  Imagine the surprise when finding that these Hans Brinker elements are not sets or jokes, but marketing elements from management who proudly offer that their accommodations are a fine alternative to sleeping on a park bench.

The way I found it was through a YouTube campaign that offered to pay anyone who posted a video that mentions Hans Brinker Budget Hotel AND got more than a thousand views would receive 10 Euros.  The video itself seemed too lo-fi to be true.

But when you check out the YouTube page, it is legitimate.  Granted, there’s not a bunch of entries and it seems like only one video other than the challenge video has received more than 1000 views. The YT page does show their classic Brinker commercials – one of which provided my first opportunity to experience claymation vomit.  On its own, the competition is somewhat lame and you really can’t tell if it’s for real or not. 

The thing is, the management seems to be OK with that.  Its consistent with the rest of their marketing.  On the home page of their site, the proudly begin with the copy;

The Hans Brinker Budget Hotel has been proudly disappointing travellers for forty years. Boasting levels of comfort comparable to a minimum-security prison, the Hans Brinker also offers some plumbing and an intermittently open canteen serving a wide range of dishes based on runny eggs.

There’s no photos to speak of, but they have created quite a bit of content on their site to show off how bad they are:

All of these pieces make for a fun waste or diversion from mundane lives. But it is still a mystery whether this place is for real or not!  Kudos to the management and their agency who seemingly have a bunch of time to waste.  In all seriousness, the campaign seem perfectly suited for their target consumer. It is refreshing to see that they have truly embraced what they are and don’t try to sell themselves as something more. The big travel brands could possibly learn a thing or two from them.

Best Buy Having Loyalty Issues

A lesson can be learned from Best Buy – and not necessarily a good one.

Best Buy’s Loyalty Program, Reward Zone, has been around for a number of years.  The point values have changed a bit and customers are no longer asked to pay an annual fee to participate, but much of it – earn points to receive coupons worth dollars off of a purchase – has remained the same.

Any time a Reward Zone member makes a purchase in the store, they are asked to confirm their address to make sure it is current.  I have bought a considerable amount of items in their stores over the years and have confirmed my address plenty of times since moving in October ’09.

The comedy of errors began last Monday when I went to buy THE THRONE Best Buy Exclusive Special Edition by Jay Z and Kanye West.  All of the sudden, my old address was showing up.  When I told them it was incorrect, I was told they couldn’t change it in the store AND I wouldn’t get any points for the transaction because I had told them the address was incorrect.  Knowing that it was a larger database issue that seems like it reverted back to an old version – affecting many more people than me – I said something to them.  There’s no need to go into the details of what happened in the store as I knew they really have no control of it on that level, but the lack of concern and the repeating mantra about my going online to change the address back was almost humorous.

I got back to the office and tried to get into the system and found that the whole system was down, not allowing me to use my credentials to get in and just giving a myriad of issues.

When I finally remembered, today, to get back around to making sure my address was correct, I found that you have to register for both bestbuy.com and also their Reward Zone site separately.  There is an option to merge the two together, but that means having both systems set up – and working.  When I tried it the first time, it told me the system could not complete the connection of the two accounts at this time.  I tried again and was finally able to do so.

Certainly, what I did was probably more than the usual consumer would go through.  Frankly, as a consumer, I had no care for doing that work and figured I would be fine continuing without it.  But, I wanted to see what was going on from a business perspective as many of my clients look for ways to expand their loyalty program.  Sadly, this Best Buy experience was not a good one and provided some insight into what not to do.

If you cannot promise value and return, loyalty programs cost more than they are worth.  If you can’t make it simple for your customer, than it really is not just a value of worth, but a matter of customer retention.  There is always the concern of technological hiccups – and that is fine if you have an escalation process to fix it quickly – but there are systematic issues within the Best Buy experience that add obstacles to simplicity and ease of use (requiring different account creation for both sites)  that make it much easier for competitors to swoop in to convert your customers; loyalty program or not.

Groupon’s Valuation – The 30 Billion Dollar Question

Regarding Groupon and it’s valuation, I agree with many of the concerns that Diane Mermigas brings up in her On Media post, “Is Groupon an Overvalued One-Trick Pony?” With the economy doing what it is doing and the opportunities for competitors to reproduce the mechanics easily and quickly, Groupon could very easily be (and most likely, is) overvalued.

One of the beautiful things about the speedy entry of Groupon into the market was its simplicity, but that could certainly cause trouble in the long-term.  The thing is, having 83 Million users – and growing – is nothing to shake a stick at.  It seems that Groupon understands that and is spending a dramatically high amount of money on advertising, awareness, retention and registration – effectively to keep growing at a pace that nobody can catch up to.

Unfortunately, the power of that 83M number is seemingly lost in Mermigas’ post as it relates to marketing opportunity for businesses.  Whether it is because Groupon doesn’t do a good enough job in espousing that reach as a resource to introduce your brand or product to fresh eyes and expand the base, or analysts aren’t looking at that when considering the dollar value, I don’t know.  There are many items and experiences that Groupon – and their competitors’ users would not have known about or tried had it not been for this.  I don’t believe that Mermigas downplays that power and realize that this particular post’s posit is about valuation, but the relevance of that marketing value must be a part of the valuation picture.

When bringing up the possible shift to brands only offering steep discounts to their own apps greatly contrasts that 83MM+ opportunity to grow your base. Additionally, the downgrading of value in the 18-34 female demo due to their less likely income goes directly against the reason for discounts to be there – not to mention that prime target age in fostering brand/product affinity and loyalty. My how things have changed since that demo was the ultimate demo to reach…

So, yes.  Groupon is seemingly overvalued, but some of its key components should not be pulled from the equation of what makes it a success. Those exclusions add back some of the value that was deemed lacking.  If meticulous exclusion applies, then it draws all valuations into question.

Affinity and Loyalty – Never Underestimate the Experience

There’s a couple solid years of service left in my Lexus, but the wandering eye has come into play – big time.  The funny thing is what I’ve been focusing on.  First of all, its a brand that I have disliked immensely in the past.  There was a point where I would have never wanted it because I didn’t like what I thought it stood for, felt the seats were uncomfortable, felt it was pretentious, boring… need I go on?

I could say my change in taste is based on new design and technology coming off their conveyor belt, but then some of their new designs are pretty tacky. It could be because I’m able to afford the pretentiousness and therefore are pretentious, but who would admit that?  I really believe it has to do with actual experience – not the experience of life or growing up, but an actual experience which ingrained an affinity or loyalty in something that I have never owned.

The auto-maker I’m referring to here is Mercedes-Benz.  I do have a strong liking for other brands like BMW, Audi, Lexus (which has been very good to me) and even Chrysler, Jeep and a couple others, but I’m actually finding myself to have an emotional response to Mercedes-Benz because of an interactive experience.  The experience was in Germany a few years ago.  I was fortunate enough to have been upgraded for free to a Mercedes for my ventures on that amazing thing called the Autobahn.  The car drove beautifully and barely even shook when I drove faster than humans without roll cages, helmets and other safety equipment should dare to do – its a good thing my wife was asleep in the passenger seat.  The other factor was our visit to the Mercedes-Benz museum in Stuttgart.  I never knew that a museum about cars would be as beautifully represented as the museum was, but this one proved it and we spent hours there.

What I can do with certainty is point to those two elements from a trip to Germany over 3 years ago as the reason for my feelings now.  Again, I was not in the frame of mind for purchasing a car then.  I wasn’t even thinking about what kind of car I could want – it was all about a great experience.  The experience was not within any purchasing cycle, season or other.  It was just a solid experience.

So, whether you think you are a brand or not, or whether your product or brand is relevant at certain periods in the year or a person’s lifecycle, there is nothing as powerful as the Experience to increase the possibility of future sales.  Sometimes you have control of that experience (like the MB Museum) or sometimes, it’s luck ( the MB rental upgrade) but what you can control is the enabling of Experience.  Much like I look at Non-Profit events as enabling people to give where they might not have otherwise, Companies should always be mindful of how can consumers can be given the opportunity to have good experiences with their brand or product, because that’s where Affinity and Loyalty come from – not just shiny ads or logos…