Ring in 2013 With Loyalty Marketing

B GradeI am writing this as the first in a series of posts under the title ‘This is Good Loyalty’ as a means to recognize companies who do a good or great job of practicing loyalty.

This inaugural post will go to a loyalty fav of mine – the Starwood Preferred Hotel program (SPG). The program includes Sheraton, Weston, Aloft, the W Hotels and Regis properties (https://www.starwoodhotels.com/preferredguest/index.html).

The reason for my note concerns issue resolution – a component of even the best loyalty programs where customers are let down. As Dennis Armbuster put it in the most recent issue of Colloquy (Volume 20 Issue 4/2012 pp2), ‘The single largest factor in driving customer loyalty may be the quality of your employees”. Further Maritz suggests in thier recent white paper Critical Factors To Ensure a Positive Customer Experience that  “A customer’s experience is the most critical factor in building or destroying true loyalty”. Some statistics they provide to back thier point up are:

  • 60% of Canadians reported customer service is the most important factor
  • We will spend an average of 7% more if we believe servcie is excellent
  • 85% are willing to pay more to ensure superior customer service

Employees are an ever more important asset in a comapny’s efforts to build stroner customer loyalty.

I stayed one night at a Sheraton property in Buffalo over the holidays (New Year’s Eve). We dropped our bags off before dinner and left for the evening. Upon our return we had a great deal of trouble getting any sleep because of the noise of the fan in the room’s wall unit heater. If we turned it off it completely it became too cold and even if we kept it on at the lowest level it was too loud for me to sleep. Needless to say I did not get a good night’s sleep. I was exhausted and angry but didn’t say anything to the staff at the counter at checkout.

But a few days later I received a survey from SPG about my stay. There were enough open ended questions that allowed me to describe my issue. I have only just recently acquired my SPG Platinum status so I can’t say how they would have responded to my note without this program designation but the response was lightening quick. I got a reply from the actual hotel manager within a few hours. He apologized for the problem and credited me with 5,000 SPG points (a free nights stay at the same hotel would cost 7,000 points). And he let me know that they are renovating the hotel in February and hoped that I would come back. Here are four things they did to make this right for me:

  1. The response was timely – it was very fast given I only used a survey to communicate my displeasure
  2. The response came from the person in charge. I think we all feel better when the person responsible for the department/building/company replies directly. It just feels more deeply heard if that person is the contact.
  3. The resolution was fair value. An ‘okay’ response might have been to credit me 1,000 points. It’s a nice round number and a thousand sounds ‘fair’. But if the ‘credit’ is too low, it runs the risk of being construed as insulting and make the situation worse. But SPG gave me value something closer to what I would have thought as fair compensation for a poorly delivered service experience. The 5,000 SPG is almost a full free night (A ‘A’ score of course would have been to credfit me the full night’s cost or 7,000 points) .
  4. They are resolving the problem. I know they aren’t renovating the hotel because of my complaint but when the problem I faced is being fixed, it makes me feel as thought they get it.

Drive More Sales With Your Catalog in 2013

catalogs1At this past year’s DMA, one of the best seminar’s I attended was a Catalogue Marketing Seminar lead by Lois Brayfield. Ms Brayfield is the President of J Schmid, a catalogue design and marketing agency in the US (www.jschmid.com). She has 20 years of studying direct marketing and catalogue experience working with many of the country’s leading direct marketers, including Hallmark, American Express, HoneyBaked Ham, Sprint, Better Homes & Gardens, Sears ( Canada ) and Mark & Spencer (UK).

Your first question might be are catalogues even relevant anymore? Isn’t everyone going to digital nowadays? Ms Brayfield’s first slide answered that question with this research statement:

Multiple studies prove the value of a catalogue and it continues to be the most effective acquisition and retention tool for many brands                                 (Forester, McKinsey & Company, DMA).

Now whereas catalogues are still big business in the US , they are used to a lesser extent in Canada . But I think as you read through these notes, you will see tips you could use in your retail flyers if you aren’t in the catalogue business.

Her work in this space has lead her to the conclusion that cataloguers must do 3 things right in order to be successful. She says this list is required to engage prospects and customers in order to sell your product in today’s ultra competitive market. “If you can engage your customers meaningfully, you are significantly more likely to convert”.

1. Engage Customers – give them a reason to act

2. Call to Action – start thinking digitally too

3. Do Something Different – stand out, be memorable

1. Engaging Customers

You must begin by knowing your customers & what they care about. Most companies will have this information ready. If not, then you need to conduct research and everyone in marketing/sales needs to be current on what their list is and how responses are trending.

In marketing and sales we often hear that we need to talk about benefits not just features. Ms Brayfield suggests we push further and reach for higher order benefits. In today’s ever changing retail environment, product differentiation is slim and when it does truly exist, it can be copied quickly. Given we often buy for emotional reasons, stretching beyond standard benefits is the sweet spot. What is a higher order benefit? It is the emotional takeaway for customers – the intangible benefit they receive from transacting with you. Customers today are asking, “What’s in it for me?” but we’ve been missing the point. We’ve been telling them WHAT we’re selling, but they want to know WHY they should buy. And the Why is the most important of these questions – it must be well developed and protected. For example Targets higher order benefit is ‘affordable style’.

To truly engage someone you need to create some level of excitement. Satisfied customers do not always translate into increased profits (Frederich Reicheld, The Ultimate Question 2.0). We need a stronger connection beyond ‘satisfied’. Today the aim should be to surprise and delight, to captivate and engage customers. Ms Brayfield suggests borrowing the ICEE principles Tony Hsieh uses to engage his customers at Zappos:

• Interesting

• Compelling

• Entertaining

• Education

2. Call to Action – Digital

Too often this basic requirement is forgotten or not executed well. Many offers today are simply the cost of entry and so do not stand out – i.e. Free delivery. You need to get customers to take some action after reading your catalogue: anything from an actual purchase to a step towards that outcome such as ‘like us on facebook’, ‘go to this url’, ‘watch this video’, ‘call us at 1-800’…If you are asking someone to do one of these intermediary steps, be specific as to what value they will get for their effort – give them a reason. Don’t just say ‘follow-us on facebook’ but rather ‘follow-us on facebook to…get a sneak peak on our new model…discover your design style…enter our sweepstakes…

We see a lot of QR codes today but most are a waste of time – they take you to the company’s home page. Why waste a customer’s time scanning the code only to disappoint them with something they can do on their own? Instead give them something unique not offered on your website. A fun video on the product…a contest…vote…an offer. Again best practice dictates you tell people what they are going to get by scanning through the QR code. If you have good content or a good offer, people will act.

With the digital call to action, simplicity wins says Ms Brayfiled. People are busier than ever and when customers interact with you digitally, they want to do so quickly and easily (I think being ‘online’ ignites the ADD in us all).

3. Do Something Different

In general, catalogues are too safe according to Ms Brayfield. “You will not succeed in this extra sensory environment” with safe creative. “We have forgotten that we need to stand out – the brain notices what is different”.

Certainly this is easier said than done, but she did challenge us to break some taboos. And not just for the fun of being ‘creative’. Your difference needs to be tied to what’s important to your customers. The four places to stand out are: covers, images, copy and themes.

(a) Cover: Here are the five goals your cover should seek to accomplish:

•Grab attention
•Tell me who you are
•Present an offer
•Get the reader inside
•Sell – yes sell even on the cover!!!

Your cover is the best way to test offers so try to find ways to do so. I know in my own work with cataloguers, testing is not used as much as it was 5-10 years ago. Budgets are tight so often the focus is on cost as opposed to ROI improvement that testing can lead to. Patagonia and Pigalog were two of her cover favourites.

(b) Images: We all know people look at picture first so your images – products and supporting imagery – are of paramount importance. Lotus Touch changed their imagery to sell the higher order benefit of the product as opposed to just selling the product and sales took off. JL Powell and again Patagonia also do an excellent job using arresting images in their work.

(c) Copy: Copy is the poor cousin in the creative family. Good copy is MORE than just well written product descriptions. It should mean making your benefits intangible…solving a customer problem…creating credibility and trust … and connecting at an emotional level.

Be a storyteller or a problem solver and you can more easily enable the higher order benefit your product addresses. Even the product description itself can be better than ‘a red bathing suit’ – it can become ‘get your hourglass figure’ (i.e. cyberswim).

Eye flow studies conducted by Chuck Tannen (Profit Strategies for Cataloguers) found this pattern watching people read a catalogue page:

•Photo/illustration
•Attention getting graphic or copy
•Price
•Product headline and body copy

So copy is fourth (or 2nd) on the list but it’s on the list. Therefore it’s important.

(d) Themes – Themes are catalogue spreads that tell us a collective story. Instead of only having product categories, themes allow you to present products in other groupings. Ms Brayfield reported that themed sections typically outperform other spreads in her experience. It is an opportunity to weave storytelling within your catalogue.

And finally she finished off her discussion with suggestions of best of breed cataloguers who are good practitioners of these principles. Here are 10 of the best to keep an eye on in 2013:

Cyberswim http://www.cyberswim.com/

Orvis http://orvis.com/

Land’s End http://landsend.com/

Duluth Trading http://www.duluthtrading.com/ (Used a boxer vs brief contest to make it men’s underwear sexy!)

Legal Seafoods http://leagalseafoods.com/

Lotus Touch http://www.newlifesystems.com/store/lotustouch/ (Great product copy writing)

JL Powell http://jlpowell.com/

Speigel http://www.spiegel.com/

Awe http://www.atwestend.com/Catalogue/ (Clear, uncluttered product shots that stand out)

Pigalog http://www.pigalog.com (If these guys can make industrial leak and spill solvents fun, you can make your product line more interesting too)

To contact Louis Brayfield you can do so at 913-236-8988 or info@jschmid.com

Sell Your Idea More Successfully

cold callHas this ever happened to you? I made a call last week to pitch someone an idea I had. Given I didn’t know him beforehand it was essentially a ‘cold call’. It’s been a few years since I had to make one and I bombed. After the call, I started to run through everything I did wrong in my head and what I would have done differently. Later that day I came across an iTunes sales podcast on cold calls – Jeb Blount’s sales blog SalesGuy: Quick and Dirty Tips.

But you don’t work in sales right? Wrong, we all sell something whether it’s a product to a prospect or an idea to someone we don’t know or ourselves to a hiring manager. And that means at some point in your life, you will have to make a cold call. So even if ‘sales’ isn’t in your title, being better at selling/talking to a stranger can you help you in all walks of life.

The Woman/Man On the Other End of the Phone … Is A Person Just Like You

He or she is a busy person who doesn’t want to be interrupted – just like you feel when you get a cold call. As soon as they realize you are a ‘salesperson’, their first instinct is to get off the phone as quickly as possible. What do you do expecting this? Talk as fast as you can to keep them on the phone just as they are trying to hang up.

What do people like to do on the phone? Have a conversation. A dialogue between 2 people talking about something of interest. So you should try to have a conversation. A prospect will be happy to talk about their interests. How do you engage a person on the phone this way? Jeb suggests you do this: Pick a short statement that should get their interest and ask a relevant question. Here is the example he gave:

 “Hi John this is David Thompson from salesgravy.com. I notice you are hiring salespeople. One of your competitors hires all their salespeople on salesgravy.com and I thought this might be of interest to you. Can you tell me how many salespeople you are planning to hire this year?”

The tip I will add to Jeb’s advice is write down what you are going to say. It doesn’t need to be word for word, but you do need to have your main points on paper. Even practise it a few times before you make the call. One sales reps once told me that every sales call is like going on stage so be overly prepared. Write it down and practise it verbally before you make the call.  

Jeb says never ask how they are doing – it’s a stupid question. They are not doing well now that they realize you are trying to sell them something and they made the mistake of answering your call. Instead get right to the point. Here are 3 reasons why this method is better than what you are currently using:

  • It demonstrates you are a professional and that you have respect for the  prospect’s time
  • When you ask an easy but relevant question, the prospect has the opportunity to discuss something of interest to them
  • If there is an objection (too busy, no $), they will get to it quickly which will allow you to get to the objection quickly in order to ask some questions and determine if the objection is real or just a attempt to get off the phone

It’s always tough to meet strangers. The reality is more prospects will say no to you than yes – so be prepared for rejection. But they are also regular people just like you who want to be treated with respect. Not tricked. Not ice broken or manipulated. In the end if you can find a way to give them they respect, focus on what they want, then you may just find more of these calls going your way.

 And if you are in sales, check out Jeb’s podcast. He has all sorts of great tips and a sales course you can find on his website http://www.salesgravy.com/ – look for the Salesgravy magazine signup.

10 Tips to Market to ‘Seniors’

Happy now but don’t call them Seniors

A few weeks ago my boss asked me to attend the 2012 Direct Marketing Association (DMA) annual conference in Las Vegas. I haven’t been to Vegas in over 20 years…my wife and I could go early for some fun…I could bring my bike to ride a bit in the mountains … tough decision. 

When all the fun and games ended and the conference began, I attended a number of seminars. As is often the case at these shows, the seminars themselves were hit and miss. Two of my favourite were Catalogue Marketing (future blog post) and 50+ Marketing Laws.

The session was lead by Kurt Medina who is the president of Medina Associates and is a Direct Marketing consultant in the US specializing in the 50+ market. He used his experience across a wide variety of clients both not for profit and for profit including some Fortune 100 companies. Not only did he know his stuff, he was quite funny and made the time spent worthwhile. I work with a number of business that market to people over 50 (in particular the not for profit vertical) and I thought this would be of interest to them.

Mr Medina started off by telling us how big this market is becoming (just think of the image on the Pig and the Python book) and that they have a disproportionate amount of discretionary income (house paid off, kids gone…). He split the 50+ marketing into three groups:

  • Pre-Retirees/Boomers                         50-63
  • Active Seniors                                      64-74
  • Seniors                                                 75+

1. Boomers (50-63)

Not much new here really – they’ve had their way throughout their lifetime and that expectation will continue into their latter years. They work long hours and they are busy. They trust themselves (NOT marketers or institutions) and they expect to look after themselves.

To reach this group you need to ensure you ackowledge they are special and offer them something unique to them – insider tips, VIP access. They want customization not mass.  And because they are independent, offer answers to their questions right up front.

2. Active Retirees (64-74)

In the US at least, this was a segment that had rising incomes during the most recent recession. The most exciting part of being a retiree according to Kurt is the possibility of new and expanding horizons with more independence, comfort and ease. Now that they are mostly retired, they are beginning to truly think about ‘me’ – what have I done…what haven’t I done…what can I now do.

3. Seniors (75+)

First off they don’t like being called senior so be wary of using that term in your messaging. Senior sounds too old even to this group. A neat statistic Kurt shared was how old we think ‘old’ is. The answer changes as you age. So if you’re 40 you might say 60+ is ‘old’ but when you’re 60 years of age 80 is the ‘new old’. 

Whereas Boomers are still rushing around, the 65+ groups have more time on their hands. So don’t rush them. Why wait! or Call now! may do more harm than good.

Now that we have an idea of the segments, what do we need to keep in mind when sending a direct campaign? Here are 5 things to remember:

  1. Use contrasting colours which are easier to see with aging eyes
  2. Don’t put copy over top of images that makes reading difficult
  3. You must have some single women in your images – not just happy couples. There are many widows in this group (and other single women) who want to see more representations of their lifestyle
    1. And when you do feature the happy couple, make sure the woman is age appropriate – avoid the mature gentleman and the much younger wife (you can however probably get away with that couple if you are targeting products for men only)
  4. Use icons – they are better remembered than verbal (i.e. the dotted line coupon for scissor cutting)
  5. Use closed envelopes with letter inside – people writing people = humanity

BONUS! And for DRTV, here are 5 more To Do’s:

  1. First 2-4 second of message, keep clean and make it message free
  2. Use graphics
  3. No fast cuts – makes it too hard to follow
  4. Feature your 1- 800 # three times at least on screen in 120 second spot
  5. Follow-up all responses by mail

For more information on Kurt and how can help your marketing to the 50+ segment, you can find him here:

http://www.medinaassociates.com/

The $1 Billion Sales Letter

bike_mailboxFor some time now, copy has been given short shift in creative. It’s the pictures art directors and awards judges prefer. Find an arresting image and you’re off to the races with your advertising creative. Headlines can have sex appeal but body copy, good luck. Even in movies, it’s the actors and directors who get the most credit – without a writer tjhough the movie doesn’t exisit.

What about a direct mail letter – when was the last time you got a great one that really moved you?

Students of this art form can buy ‘The Greatest Direct Mail Sales Letters Of All Time’ on Amazon for $370!, but I thought it would be fun to look at THE best one of all time. I have referred to this letter many times in my career when talking about how to set up ‘control’ versus ‘test’ cells in direct marketing. This grandadaddy is said to have generated more than $1 billion in revenue for The Wall Street Journal (symbolison.org, 2011). In March 1993 Target Magazine called it the most successful advertisement in the history of the world. Written and first mailed in 1975, to this day it has never been beaten.   

Here’s a short excerpt to give you a sense of what amazing copywriting looks like:

On a beautiful late spring afternoon, twenty-five years ago, two young men graduated from the same college. They were very much alike, these two young men. Both had been better than average students, both were personable and both – as young college graduates are – were filled with ambitious dreams for the future.

Recently, these two men returned to college for their 25th reunion.

They were still very much alike. Both were happily married. Both had three children. And both, it turned out, had gone to work for the same Midwestern manufacturing company after graduation, and were still there.

But there was a difference. One of the men was manager of a small department of that company. The other was its president.

What Made The Difference

Have you ever wondered, as I have, what makes this kind of difference in people’s lives? It n’t always a native intelligence or talent or dedication. It isn’t that one person wants success and the other doesn’t.

The difference lies in what each person knows and how he or she makes use of that knowledge.

And that is why I am writing to you and to people like you about The Wall Street Journal. For that is the whole purpose of The Journal: To give its readers knowledge – knowledge that they can use in business.

And then the letter goes on to talk about how the WSJ can be as instrumental in your career. Beautiful writing.

Full letter: http://www.earthmonkey.co.uk/media/33772/wall_street_journail_direct_mail_piece_1974.pdf)

If you think this lesson only applies to direct mail, think again. In the age of social marketing we are all writers – at least those who create content. The point here isn’t to write long but rather write well. One of the best places I have found with tons of great copywriting advice is www.copyblogger.com or check out their fantastic podcast on iTunes (if you’re from the UK try James Daniel at www.earthmonkey.co.uk).

Long live the copywriter in us all.

The Foundation for Queen Silvia Children’s Hospital

AdPitch Blog

“The Foundation for Queen Silvia Children’s Hospital raises funds for toys, healing gardens and activities for the 500,000 children who stay at the hospital every year. Our objective was to contact previous and future donors by mail, asking for a small donation.

To illustrate the need for toys, we didn’t mail the letters directly. Instead, we gave them to the children in the hospital and asked them to play with them. After the detour, we sent them on to the right addresses.

As every letter had been a plaything for a few hours, it became a unique and physical reminder of the fact that children need to be children, even when they’re in the hospital.

Donations to the foundation increased by 320% compared to the year before, and the campaign resulted in hundreds of new donors.”

Nice, simple idea to help gain donors of toys for kids at the Queen…

View original post 18 more words

Can You Make A Good Loyalty Program Better?

I was shopping a few weeks ago at Chapters book store and my Rewards card was up for renewal. The program called irewards has a $35 annual fee that provides discounts on purchases throughout the year as a member (40% off bestsellers instore; 10% of books instore; 5% off virtually everything else in the store; and up to 5% of books online). With enough spend members can receive enough discounts to cover the cost of the card fee.

Chapters also has a second loyalty program – plumb® rewards. This is a free points based program where members earn 10 points for every dollar spent that can be redeemed towards instore purchases (2,500 points = $5; 4,500 points = $10 … up to 35,000 points = $100). You can’t be a member of both programs so choosing which is better can be confusing for customers and store staff.

I buy lots of books from Chapters each year. During the renewal discussion at the pay point the store associate looked at her computer screen and said the rewards program was better for me. She didn’t explain why so I asked how much I ‘saved’ over the past 12 months. She took a bit of time to toggle to another screen to tell me it was around $90 in discounts received. So for me, the fee based rewards program was the better deal – $35 card fee, earned $90 in discounts = $65 in the black.

I paid my new annual fee but left wondering why did I have to ask how much I had saved? Why was that information on a different screen? Wouldn’t if have been more powerful if the discount total was on that initial screen and the associate’s script went something like this: “Mr Thompson, you received $90 in discounts last year with the irewards program. Would you like to renew again this year?”  

So two things could change at Chapters – programming to bring that information to the first screen and scripts to position the renewal discussion around the amount of discounts received…when it makes sense to do so (more on this later). Once they have that in place here’s what else Chapters could do to get more people to earn back the cost of the program fee:

  • Tell me how I am doing. Let me know when I am at key stages – i.e. the halfway point or the 90% mark of earning back my fee
  • Celebrate. Congratulate me when I reach the point of covering the card fee cost – especially if I do so with lots of time left before renewal
    • And remind me going forward that everything from here on in means I am in the money
  • And if the path I am on looks as though I will be just shy of the mark, let me know early enough so I can possibly do something to get there

Of course this is easier when the customer is on track to hit the target or has already done so. What do you do if it’s clear they won’t? Leave them alone and hope they renew next year anyway? No. Not reaching that goal – earn program fee back in savings/discounts (or retaining some special customer status for other types of loyalty programs), can not only mean they won’t renew, it can leave customers with a bad taste so you lose all of their business going forward (how disappointed would you be to learn you no longer qualify for ‘Platinum’ status and the perks you enjoyed are gone).

Chapters has already done a great job to address this issue. Their plum®rewards program allows customers to get something extra (points) for their spend and it comes with no fee. A great defence is a great offense.

What else could they do for lower spending irewards members?

  • Help them get to the target. If you can tell early on a customer won’t make it to the target, look for ways to help them. Offer this segment a sale or double points on their next purchase. Something to make these customers feel the goal is within reach. Even if they don’t get there, they will appreciate your efforts
    • Send a survey to or contact directly higher value long term customers. Is there a reason they are down this year that you can resolve? Or is it a structural change in their behaviour that you cannot fix – i.e. did I have a set of triplets and have no time to read anymore? If you do put added effort to help this segment of customers, you probably don’t want to spend time/$ on the structural change group
  • For longstanding high value customers who fell behind this year, you could discount/waive the fee or let them retain their status for one year. Perhaps last year was an aberration and a year’s grace will motivate them to get back on track…in your program and not someone else’s.

So what lessons can we all learn from this? Here are a few suggestions:

  1. Make customer value clear. Don’t leave it up to the customer to do the value math. Help them see what they get if they are paying a fee or joining your free program. If the customer isn’t clear on the value they receive, educating them at renewal time is probably too late.
  2. If the value picture isn’t rosy, fix it. If the net benefit for members isn’t going to be positive or if they aren’t going to qualify for their preferred status level, try and help them find more value in your program. And if they can’t reach the target within that structure, be mindful about how they exit – this is a critical time to do something so you don’t lose them for good.  
  3. Treat your customers better. I say better instead of well because I think most companies believe they already treat their customers well. I don’t want to argue the point but rather suggest we can all do a better job. A ball dropped here or an opportunity to assist not taken and customers feel under appreciated. Find easy ways to change that.  
  4. Surprise and delight.This phrase is so overused in the CRM/loyalty community that it’s lost most of its power. Here are two examples of companies using this strategy correctly:
    1. mypanera rewards program rewards customers at irregular times instead of structured intervals.  
    2. Best Buy offers some of their best customers a surprise screening to a big movie release (and yes, BB is not doing well right now but that’s my point – few obvious examples of good S&D)
  5. Do More for your Loyal Customers. Ask your (best?) customers what more could you do? You will surely get answers back that you simply cannot implement or are too costly, but I am confident you will find a few little gems that you can that are affordable. Even if you can only do so for your best customers.