On the Fifth Day of Loyalty Marketing Nirvana: Build Consensus on Improvement

Retail loyalty marketing - building consensus on improvementWhen launching loyalty initiatives it’s easy to start imagining how your new efforts will improve your marketing results, and ultimately, the bottom line. But for the desired results to happen, your retail loyalty program will need to continuously improve as well. And that’s why, on the fifth day of loyalty marketing nirvana, we address the need to build consensus on improvement.

It’s vital that everyone in your company – and especially the stakeholders we discussed on day one – fully supports the loyalty investment. Before running plays, athletes huddle. Before elections, citizens rally. What is your business doing to ensure everyone is using the same playbook to both prepare for and implement your future retail loyalty marketing investment?

Before we get ahead of ourselves, let’s take a step back and discuss ownership of building consensus on improvement. Failing to address ownership can cause delays and roadblocks that make it difficult to get your retail loyalty program off the ground. You can certainly use the experience and historical performance data from your loyalty vendor to help you ideate, plan and project, but ultimately your company needs to commit to the data, process and metrics you will use. Getting your project approved will be an uphill battle if you are only using historical data from your vendor to justify your business case.

Okay, now that we’ve got that caveat out of the way, let’s talk about how we can build consensus on improvement. Eilene Zimmerman shared a cool story about Butter Lane Cupcakes, which opened in 2008 at the dawn of the economic crisis. With business slow, co-founders Pam, Maria and Linda knew they needed to take a different approach to getting customers in the store, so they agreed on the idea of offering cupcake-making classes. For $20, attendees could learn how to make batter and frosting. The classes only attracted four attendees at first, but gradually increased to about 10 people a night as word-of-mouth spread.

Seeing the class model was catching on, the owners decided to expand to the space next door and also tried a Groupon promotion, offering half-price classes. They hoped to sell a few hundred coupons. They sold 9,000.

Discount included, the company still made money. “That first seat is expensive,” said Pam, “because you are paying for the instructor, the room, the oven and utilities, but every seat after that, the marginal costs are lower, so you’re highly motivated to fill the room.”

Butter Lane’s revenue has since increased significantly and they also added another location. Approximately 40% of Butter Lane’s revenue will come from classes this year.

Tying it back to building consensus on improvement, Butter Lane’s endeavor wouldn’t have worked if the company didn’t:

Believe in the value of growing customer loyalty

Teaching classes was a risky move, as they were giving away baking secrets to customers, but it ended up driving retail loyalty with all the goodwill it generated.

Get consensus on improvement

For this to work, everyone needed to agree that teaching customers how to bake their own cupcakes was a great move. The team at Butter Lane ultimately agreed on the promotion details and the profit margin metrics that would be used to determine success. They also agreed on a plan for expanding the initiative once it proved successful.

Chances are your organization is much larger than Butter Lane. You will have larger sets of data to work with, there will be more factors to consider and you will have more stakeholders involved – which is why it is absolutely necessary to establish an agreed-upon plan upfront for continuously evaluating and improving your retail loyalty initiatives.

Do you have questions regarding building a consensus on improvement? We’re happy to help. Tweet us @TIBCO, hashtag #LoyaltyLab.

To Supply and Demand, Add Context and Timing

By Jeanne Roué Taylor

We’ve spent most of our lives hearing about the law of supply and demand. Brands create supply through manufacturing and the building out of service capabilities. Through marketing, quality, and some amount of skill and good fortune, our customers demand our products. Can this well-tested, age-old law survive our times? Yes, but only if it adds two more components: context and timing.

A real-time marketing system does exactly that. The new supply chain is about more than goods and transactions—it is also about relevant marketing that takes into account the subtleties of what’s happening in the customer’s world.

Thanks to fundamental shifts in technology, the new laws look something like this:

Supply – What is my current inventory level? What inventory is stressed because of low sell-through or seasonality? Where are my services overstaffed? From where can I fulfill an order that makes the most sense cost- and timing-wise? Where should I stage my inventory for most efficient sell-through?

Demand – What are my hottest items that shouldn’t be discounted? What is the market talking about, and where can I join the conversation? What can I do to better capture the interest of my customer as both an individual and a refined segment of all of my customers?

Context – What are my customer’s buying patterns: When do they shop, how do they shop, and where do they make their buying decisions? What do their patterns reveal about what they’re most likely to buy next? Where is my customer at this moment? What are the ambient circumstances, like weather, seasonality, location (in store, near store, on web or mobile) that help answer the question, “Customer, what’s going on in your world, right now?”

Timing – When is my customer most likely to be receptive to communication? Do I understand their preferences, including means of communication and timing? Can I reach my customer at the right moment with the most relevant information? Real-time must be right-time marketing.

For marketers who were previously disconnected from the supply chain world, the new laws represent an opportunity to play a much bigger role in moving the brand’s needle. The new world of retail is far more mobile, far more contextual, and far more personal, making it a much more dynamic environment for doing business.


Just Who Owns the Customer, Anyway?

by Jeanne Roué-Taylor

As technology expands rapidly to manage customer experience, a subtle shift is under way in who gathers and uses loyalty and other data to manage the customer relationship.

No one needs to remind us how quickly the nature of shopping and customer experience is changing. We see signs of it everywhere and need look no further than the startups, pattern of acquisitions and alignment of technologies reported in the tech press every day.

The big question

There’s a second shift happening that might not be quite as apparent as those news reports. It involves manufacturers creating ‘direct to consumer’ capabilities that open the door to the question, “Just who owns the customer?”

This is being driven partly by infrastructure spend by the biggest product companies that serve fashion, sports and fitness, grocery and every other major category. Technology now allows for personalized, one-to-one marketing relationships from the biggest manufacturers down to the individual consumer.

This side of e-commerce isn’t about the money, necessarily – that will remain mostly in the hands of the front-end of retail. It is more about additional touch points that build trust, relationships and communication that complement retailer activities.

Retailers playing catch up

This leaves the retailers needing to follow through on the brand-building investment of their suppliers. Many retailers are still slow off the blocks when it comes to customer-facing technology. That will need to change quickly to keep pace with rising customer expectations of convenient, in-the-moment offers and loyalty rewards.

Just who owns the customer will be decided based on who has the best system to manage the new model and set and meet those expectations.

Join us on February 12 for the webinar, The New Event-Driven Marketing: Success with Real-Time, Omni-Channel Engagement.


Getting Real About Real-Time Marketing

By Jeanne Roué-Taylor

Real-time marketing means something a little different to everyone. The term is too-often used to describe getting information on what happened up to the moment, a rolling report of the history of something – like customer purchases, staffing costs or inventory levels. It’s like asking what time it is. There’s only an accurate answer for that one-dimensional question at one moment, then time moves on.

Real-time marketing clock

But what if real-time can mean something much different? In the event-driven marketing realm, it does. We’re going through a transformation of the meaning of real-time marketing driven by the increasing ability to know what’s happening simultaneously across a customer – their history, their location, our location, inventory, pricing, and more.

Hoping the needles move

Real-time marketing’s new definition is about being able to anticipate the scenarios that move a customer to make a purchase, taking advantage of distributed inventory, rescuing an abandoned shopping cart and driving business to the web and store. It isn’t a dashboard to watch and hope the needles move. It is a way to anticipate and act in the actual moments that matter the most.

There’s a historical component to this kind of real-time marketing, but it’s part of the context, not the answer.

But redefining real-time marketing isn’t enough. It has to be backed by event-driven marketing that connects all of those dots and provides a measurable advantage over the competition.

To learn more, download a copy of our whitepaper, “The New Event-Driven Marketing“.

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Not Your Mother’s Holiday Shopping

Last week, Michael Greenberg, Loyalty Lab’s director of global solution strategy, penned an article in DM News about the holiday season. A veritable Superbowl for loyalty marketers, the holidays are, as Michael puts it, the time to “roll up our sleeves, cross our fingers, and set our plans in motion.”

Well, the dust has settled following Thanksgiving, Black Friday, and Cyber Monday. But the madness is far from over now that the holiday season is in full swing. Titled “Not Your Mother’s Holiday Shopping,” the piece details the ways in which loyalty marketers should be reassessing their strategies in order to stay ahead of the game —  specifically by putting a major emphasis on mobile, which has become a huge force in the commerce game over the past couple of years.

And, looking back on the opening shot of 2012 holiday shopping, it’s clear that Michael’s assertions about mobile are right on track. According to IBM, mobile traffic was up 28.5%, while overall online sales were up 20.7% from 2011. Mobile accounted for 16.3% of all online sales, with a 58.6%-41.4% split between mobile phones and tablets.

Convinced, yet? While 2012 may be rolling already, Michael’s top 5 tips for bulking up your mobile marketing strategy will have you well on your way to a killer season in 2013. His main points:

1. Don’t skimp on mobile development.

2. Stand out from the noise (and from the glut of mobile apps already out there).

3. Take an offensive and defensive position — protect your best customers while successfully going after your competitors’.

4. Ask your customers for feedback.

5. Start planning for 2013, on December 26.

Read about all of these in more detail over on DM News, and get geared up for next year! Pay extra attention to how your initiatives perform this year, and to what your competitors are up to. What does your holiday game plan look like? Tell us in the comments!

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