Inflection points: Seizing the Moments in Customer Loyalty

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The term “inflection point” has multiple definitions. In differential calculus, an inflection point is a point on a curve at which the concavity changes from positive curvature to
negative curvature, or vice versa. In political science, an inflection point is a moment in history that dramatically alters a geopolitical situation, for better or worse. In business, Intel co-founder Andy Grove has described a strategic inflection point as “an event that changes the way we think and act.” Each of these definitions describes a moment at which our fortunes change — and in many cases, we can’t recognize the moment until
after it’s passed.

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Inflection points: Seizing the Moments in Customer Loyalty

  1. 1. INFLECTION POINTS SEIZING THE MOMENTS IN CUSTOMER LOYALTY RETAIL BRIEF Cindy Faust, Vice President, Product Management Paul Sage, Product Management Director, Loyalty Management Systems
  2. 2. 02 / Inflection Points REMOTE EMPOWERING LOYALTY CONTROL POWER + EASE = CONTROL Our loyalty toolkit makes it easy to control powerful loyalty programs when and how you want to. That unique combination of power and ease gives you improved control over the customer experience. We can help you. Visit us at aimia.com © 2013 Aimia Inc. All Rights Reserved.
  3. 3. Inflection Points / 1 INTRODUCTION The term “inflection point” has multiple definitions. In differential calculus, an inflection point is a point on a curve at which the concavity changes from positive curvature to negative curvature, or vice versa. In political science, an inflection point is a moment in history that dramatically alters a geopolitical situation, for better or worse. In business, Intel co-founder Andy Grove has described a strategic inflection point as “an event that changes the way we think and act.” Each of these definitions describes a moment at which our fortunes change — and in many cases, we can’t recognize the moment until after it’s passed. “So while marketing utopia may yet lie over the horizon, our vision of this future remains firmly fixed: Reward and recognize best customers throughout the purchase cycle.” When it comes to customer loyalty, inflection points are no less important. Every customer interaction — from her first encounter with your brand, through her first purchase, at each touch point she encounters in your loyalty program, and into each post-purchase service encounter — can make or break her relationship with your brand. In today’s recovering global economy, recognizing and positively influencing these loyalty moments of truth has become our singular challenge. Indeed, this challenge has led customer-facing businesses to reinvest in and refocus on the customer experience. Consulting firm Temkin Group, for example, found that a modest improvement in the customer experience by a USD $1 billion company can generate between USD $141 million and USD $382 million over three years. Companies such as U.S.-based Delta Air Lines are paying heed to this advice, investing more than USD $3 billion in airport facilities, global products, services, and technologies that enhance the customer experience in the air and on the ground. series of white papers, Millennial consumers around the globe are massively influenced by social and mobile channels, crowd-sourced recommendations, and demand instant gratification from brand interactions. Building loyalty with Generation Y consumers requires a holistic approach, one that connects data dots between channels and touch points to provide a rich flow of customer insight into the business. The problem is that no one has yet assembled a complete view of customer relationships. Interaction data are often unstructured or locked in silos inside the business. Starbucks, for example, collects rich social media data, and funnels a quarter of its transactions through its My Starbucks RewardsTM loyalty program. But even this retail loyalty leader is still searching for ways to unlock the power of its data. “We haven’t figured out what exactly to do with it yet,” said Joe LaCugna, Director of Analytics and Business Intelligence at Starbucks, about the company’s customer data. So while marketing utopia may yet lie over the horizon, our vision of this The business press is also full of future remains firmly fixed: Reward stories heralding the rise of Big Data and recognize best customers as a business imperative. But throughout the purchase cycle. success requires more than a In this future, we can build loyalty blanket investment in data. The most at every stage: When consumers important data are not big, but rather check in at your store, when they “core” customer data — that data the make a purchase, when they share closest to, and the most predictive the purchase on Facebook, or even of, relationship value. Historically, when they upload post-purchase traditional transaction-based loyalty usage data via an interactive app. programs have served as a rich source We may not be there yet, but today’s of behavioural data. Loyalty analytics loyalty platforms and solutions translate that data into action, and hold the potential to turn this data customers respond with increased into the marketing fuel that powers spend, tenure, and advocacy. sustainable, reciprocal, and profitable customer relationships. But in today’s multichannel, message-saturated, always-on To take the first step on this path, marketplace, a one-dimensional you’ll need to identify the most loyalty program is no longer important inflection points along your enough. In traditional programs, customers’ journeys from curious relationship-building efforts happen newcomers to brand loyalists. In this only after the purchase — and can’t Retail Brief, we identify the 10 most leverage data and insight from preimportant loyalty moments of truth — or post-purchase interactions. As we and offer a few guidelines for getting revealed in our 2011 “Born This Way” them right. © 2013 Aimia Inc. All Rights Reserved.
  4. 4. 2 / Inflection Points I: BEFORE SHE WALKS IN THE DOOR According to McKinsey & Company Director David Court, consumers encounter two-thirds of brand touch points during the “active-evaluation phase” — when they seek out online reviews and peer recommendations, when they’re browsing in the store, or when they encounter brand offers and messages. A fair amount of relationship-building work, therefore, happens well before your customers have made a conscious decision to purchase. These early encounters collectively comprise your first loyalty inflection point. evaluation-stage data at their disposal. But how do you know which data hold the most insight? Your challenge is to understand which data points will give you a head start in building loyalty before your customer walks in the door. She may have “liked” your Facebook page, or contacted your call center — but if the data from these channels lie stored in disparate silos within your organization, then you’re missing key puzzle pieces that can help you assemble a complete picture of customer potential. Here are two first steps to leverage that data to build loyalty: Because these pre-purchase touch >> Break down the silos. Virtual points have become so important, retailers such as Amazon have traditional loyalty programs that don’t been linking evaluation-stage data provide insight into evaluation-stage points to customer purchase data behaviour leave marketers at a decided for years. Thanks to web analytics, disadvantage. The good news: Many online retailers can link data from retailers already have a fair amount of web searches, site page views, and abandoned shopping carts to serve up relevant offers and emails to consumers, their response to which signals their intent to purchase. Fortunately, next-generation loyalty software platforms now give multichannel retailers the same opportunity to break down the data silos. >> Leverage predictive analytics. By looking at the historical behaviour of current best customers — first point of contact, pages viewed, Facebook posts “liked,” offers clicked on, etc. — you can become adept at understanding which real-time behaviours are most predictive of future relationship value. Predictive models fine-tuned to your business can now identify loyal customers — sometimes before they even know they’re loyal. II: AT THE FIRST SIGN OF TROUBLE Every fledgling relationship hits a few early snags. Time-starved customers are distracted in-store by a rival offer received via mobile device. An early customer service interaction goes awry. Retail showroomers find a lower price online and walk out of your store. By leveraging interaction data, you can identify and act on these inflection points with relationship-saving tactics. A recent report from consulting firm Accenture highlights the challenge. The report claims that “companies are losing loyal customers at an alarming rate because of poor customer service and rewards.” Clearly employee engagement matters more than ever before. Nearly 85 percent of surveyed customers feel companies could do more to retain their loyalty. Sixty-nine percent would have stayed loyal if the company had resolved a customer service problem upon their first contact, while 55 percent would have © 2013 Aimia Inc. All Rights Reserved. remained loyal had the company offered them preferential treatment and rewards. An Aimia retail research study conducted in Canada in early 2013 revealed that certain factors can play more of an influencing role than others in driving successive switching behaviour. The top three factors driving switching behaviour were price, product quality, and location. These top factors were consistent for individuals who switched main retailer(s) in a given category and those individuals who remained loyal to their main retailer. However, the study did highlight that for individuals showing a propensity to switch their main retail store multiple times, customer experience factors, like staff quality and store location, begin to hold similar importance in driving these “high switchers” to shop elsewhere. How can you leverage data and insight to smooth out these rough patches? Here’s how: >> Leverage data to improve service. Through loyalty analytics, you can identify current and potential best customers. By funnelling this insight to your frontline customer service channels, you can flag these best customers for preferential treatment, more liberal return policies, and recognition. >> Embrace in-store mobile activity. Combat showrooming by embracing showroomers. Techniques such as locationbased offers, geo-fencing, and smartphone apps allow you to connect in real time when a customer is in the aisle contemplating a purchase and allows them to pull up offers for themselves. Retailers such as Kohl’s, Target, Debenhams, John Lewis, and Gap have installed free Wi-Fi in their stores. At Target, customers can now access the chain’s mobile app to redeem coupons and scan QR codes throughout its stores.
  5. 5. Inflection Points / 3 MOBILE MOBILE Be with the Being with the customer, wherever customer, wherever and whenever and whenever INTERACTION CENTRICITY SOCIAL SOCIAL Create social Creating social currency, not just currency, not just a points currency a points currency CREATING THE CREATE THE RIGHT CUSTOMER EXPERIENCE Recognize and Recognize and respond to respond to every interaction, interactions, not not just the just transactions transaction Technology represents the floor Technology represents of your marketing of your the foundation potential, rather than the ceiling marketing potential SCALE REAL-TIME REAL TIME Allowing for breadth Build loyalty and depth across solutions that every customer grow with your touch point customer base Shortening time Shorten time between action between actions and reaction and reactions ACHIEVEMENT Deconstruct individual behaviours to provide individual recognition © 2013 Aimia Inc. All Rights Reserved.
  6. 6. 4 / Inflection Points III: DURING A LIFE CHANGE Retail analytics have become so sophisticated that retailers can often anticipate major events in their customers’ lives — a pregnancy, a marriage, the purchase of a new home — with uncanny precision. Sometimes we even know more about our customers than they might want us to. As marketers, our task is to wield these tools to build relationships with the building blocks of trust, commitment, and reciprocity. likelihood to switch retailers were most often within the consumers’ control. Here are a few tips to influence these life events: >> Counter-program against the offer blitz. If you’re not ready to invest heavily in new data sources, you can always take advantage of the data you already have. A DIY retailer, for example, may have a pretty good handle on which >> Aimia’s Canadian retail research of its customers have purchased evaluated a cross-section of life a new home. But rather than events that were either within contribute to the blizzard of offers individuals’ control to initiate (i.e. with which new homeowners home renovation, exercise/diet are inundated, why not send an program, etc.) or outside of the offer for gardening supplies the individual’s control (i.e. death, injury, following spring — when many new etc.). Overall, nearly three out of every homeowners invest in landscaping? five life events (59%) were found to be within the control of the individual >> Help them navigate the journey. Customers who do volunteer to initiate the experience. Those events that precipitated a higher life-change information derive the most value when you use these data to help them navigate specific stages of the journey. The Pampers “Gifts to Grow” reward program, for example, provides multiple points of engagement for expectant and new mothers who join the program. Through data analysis, P&G has identified key inflection points within the motherhood journey where the company can help a new mother with information, education, and offers that are about more than diapers and wipes — she receives information about making the right decisions for her family. These examples are simple, yet powerful, loyalty-building tools that help marketers build relationships based on mutual expectations of value. By demonstrating commitment to the customer journey, you can build brand loyalty that lasts well beyond the customer’s initial entry into a new life stage. IV: WHEN SHE JOINS YOUR LOYALTY PROGRAM The modern loyalty program is arguably the most effective means to build relationships with loyal customers through the exchange of value for information in an environment of permission and trust. When you invite a customer to join your loyalty program, you must execute this inflection point flawlessly — if the experience is cumbersome, or if you fail to deliver on promised value, then the relationship might take a permanent turn for the worse. Loyalty programs typically fail when the operator assumes that the loyalty journey ends when the customer joins, and that offering a basic point-per-dollar or flat discount reward, with no further © 2013 Aimia Inc. All Rights Reserved. effort to build value and relevance into the program, is sufficient to maintain loyalty. Avoid dropping the ball with this inflection point by considering the following tips: >> Make joining seamless. Jimmy Buffett’s Margaritaville Casino & Restaurant in Biloxi, Mississippi, for example, equips employees with iPhones and iPod Touches so they can sign up new guests for the Players Club reward program right on the casino floor, instead of having customers wait in line at a central program desk. This tactic allows employees to interact with customers — and gives customers more time to spend on the gaming floor. Guests can also start using their cards immediately, which translates into more immediate customer data flowing into the business. >> Demonstrate immediate value. Aimia’s research into the Millennial generation reveals that Generation Y holds high expectations for instant gratification from reward programs. That expectation doesn’t mean you have to fund expensive rewards for new members. But it does mean your program will need to incorporate engagement tactics such as gamification and social media channels. It also means you’ll need to focus on that most underserved element of program value — offer relevance. By demonstrating relevance early in the program, you can satisfy Millennial value expectations without breaking the bank.
  7. 7. Inflection Points / 5 MILLENNIAL REWARDS The key difference between Millennial loyalty program participation and participation by older consumers: Millennials expect immediate gratification and transparent value from your program. These expectations will require marketers to reinvent programs in traditional sectors. Data from Aimia’s U.S. Millennial Survey, 2011. PLAYING THE GAME: Millennials play the loyalty game to win… Q: How long should it take to earn a reward? Q: Are you a member of a loyalty program? (yes) Millennials Non-Millennials 77% < month 41% 28 21 9 43% 82% 35 13 9 < 3 months < 6 months < 1 year Millennials Non-Millennials So they expect programs to be free, fast, and relevant… Q: Top reason to join a reward program: It’s free to join: Millennials Rewards can be earned quickly: 66% 55% 44% 36% Exciting rewards such as trips, etc.: It’s easy to join and participate in: 40% 37% It’s connected to a social cause: 25% 20% Rewards are relevant to my life: 42% 50% It’s a company I feel loyal to: Millennials 69% 50% 44% Retail Groceries 25% 45% Travel 26% Non-Millennials 45% 55% 21% 23% Credit/Debit 22% 20% Online Shopping admit one 19% 18% 9% 11% Q: Top program sectors: 56% Non-Millennials Restaurant 18% Entertainment And they’re open to more non-traditional rewards. Q: Preferred reward categories: $ $ 83% Millennials 85% 80% 80% Gift Cards Cash Back 24% 15% Home Electronics admit one 12% 6% 35% 42% 19% 35% 9% 47% OFF 5% Discount Coupons 22% 18% Travel Entertainment 10% 4% Music Fashion Non-Millennials VIP Access $ $ Charity 6% 8% 1% 1% Mobile Downloads © 2013 Aimia Inc. All Rights Reserved.
  8. 8. 6 / Inflection Points V: AT THE FIRST SIGN OF LIFE Experienced loyalty marketers know that early signs of program engagement can be highly predictive of future customer value. Conversely, poor communication or lack of reinforcement of early, positive signs of interest can derail a promising relationship. Ensure the formation of long-term, profitable relationships with your best customers by acting on insight from these early loyalty program interactions to reinforce desired behaviour and enhance the customer experience. Sometimes, the simple things can be the most effective — say, when a member earns program currency for the first time, and you send an email to thank and congratulate her right away, in the moment. Or perhaps you reinforce the value of connecting her Facebook account to the program with a surprise-and-delight benefit. By rewarding these early signs >> Personalize as quickly as possible. Savvy loyalty marketers now leverage loyalty data as early in the relationship as they can to personalize the customer experience. To get started, consider these Transactional data is useful for more best practices: than just rewarding points — you can leverage it to provide personalized >> Supplement with soft benefits. offers, enable preferences, and Program disengagement often even derive early segmentation occurs when members don’t feel benefits. U.S.-based luxury hotel they’re earning hard currency chain Kimpton Hotels & Resorts, for benefits quickly enough to make a example, personalizes the experience difference. Engage these customers of its loyalty program members when with early-stage soft benefits that they hit specific eligibility milestones: reinforce program value for Threshold-reaching members can high-potential customers who have request their favourite snacks, receive yet to shift spend. For instance, upgrades to preferred room types, U.S.-based hotelier Lexington and earn surprise gifts. UAE-based by Vantage Hospitality Group, airline Emirates captures passenger rewards leisure travelers in its preferences like favourite beverages points-based reward program with and uses this information to ensure such immediate benefits as free that on future journeys, business upgrades, late check-out privileges, class seats are decked out with and discount car rentals. preferred drinks. of life with positive, responsive reinforcement, you can lay the foundation for enduring relationships. VI: DURING PROGRAM REDEMPTIONS Reward redemption is the heart of the customer loyalty experience. It’s the inflection point at which your program proves its value, and loyalty marketers know that multiple redemptions are a demonstrable indicator of increased customer value. While short-term financial concerns might lead the unwise to discourage redemptions in favour of increasing program breakage, we must resist the urge — in fact, Aimia research demonstrates that customers who redeem at least three times maintain higher spending and greater lifetime customer value. And the customer insight you gain from redemption data drives even greater value throughout the enterprise. The trick today is to encourage redemption without breaking the bank. To receive the full benefit of increased loyalty through the © 2013 Aimia Inc. All Rights Reserved. redemption experience, incorporate these best practices: >> Deliver a flawless redemption experience. One certain way to damage relationship value is to fumble reward fulfilment — particularly during a member’s first redemption experience, when her expectations are high. From the software that deducts the points from her account, to the email that confirms her order has shipped, to the delivery method you choose to fulfil the order, every step of the redemption process must proceed without a hitch. Should the process break down at any point on the fulfilment chain, apologize immediately and fix the problem. Each successful redemption reinforces relationship value and increases loyalty. >> Add value through partnerships. A sound partner strategy can enhance redemption value on both sides of the program experience. On the earn side, partnerships increase earn velocity while helping you control costs. My Starbucks Rewards, for example, has expanded earning opportunities to grocery store purchases of Starbucks products as well as purchases at Starbucksowned Teavana stores — a change expected to double program membership. On the burn side, coalition loyalty programs like Aeroplan in Canada and Nectar in the United Kingdom (both programs operated by Aimia) offer a variety of redemption partnerships that expand member opportunities and increase program value.
  9. 9. Inflection Points / 7 78% of U.S. Millennials are more likely to choose a brand that offers a loyalty program — Aimia 2011 Millennial Study 74% of UK Millennials are more likely to choose a brand that offers a loyalty program — Aimia 2011 Millennial Study Share shift can increase by 20-25% for brands after implementing a loyalty program — Aimia proprietary program data, 2009-2013 A loyalty program can improve customer acquisition by 5-10% — Aimia proprietary program data, 2009-2013 Loyalty programs influence 84% of U.S. members* — ACI Worldwide Study, January 2012 *84% of members are likely to choose a retailer over its competitor if they are members of the retailer’s loyalty program. © 2013 Aimia Inc. All Rights Reserved.
  10. 10. 8 / Inflection Points VII: DURING MAKE-GOOD OPPORTUNITIES Of failure, Henry David Thoreau once wrote, “If we will be quiet and ready enough, we shall find compensation in every disappointment.” For every company, failure to deliver a flawless customer experience is inevitable — what counts is how we react to that failure, what we do to rectify it for the customer, and what we learn from it. That our flaws are often now broadcast to the world via the bullhorn of social media makes our recovery from failure exponentially more challenging — but those same channels also provide opportunity to highlight your strengths. If the flip side of every problem is an opportunity, then you won’t want to miss the chance to take advantage of the loyalty-building potential of make-good moments. A recent RightNow Customer Experience Impact Report found that 89 percent of consumers began doing business with a competitor following a poor customer experience, but 92 percent of the same group said they would be willing to return to a company after a negative experience if they got an apology. To turn customer service lemons into loyalty lemonade, consider these best practices: >> Develop a 360-degree customer view. Your challenge in resolving service issues in real time is to connect your customer service, communication, and loyalty touch points on the back end. If one team manages customer complaints, while another team monitors social media, while still another manages loyalty program and CRM data, you end up with a Rashomon-like view of the customer relationship, with no one able to identify or distinguish high-value relationships that require extra care. Tearing down these data silos is the great marketing challenge of our time. >> Use the loyalty program as brand insulation. The reward and recognition tools inherent in your loyalty program provide powerful relationship insulation. If a service issue disgruntles a premium member, a bonus point offer or a surprise-and-delight benefit can quickly assuage bruised feelings. Amsterdam-based KLM Royal Dutch Airlines does a nice job of using surprise-and-delight techniques based on life events learned via social channels to make sure it manages its customers’ experiences. For new customers, auto-enrolment in your program with an immediate earning bonus can also soothe perceived injuries. VIII: WHEN YOU EXCEED EXPECTATIONS Customers are so well trained by experience to expect the bare minimum in service and attention that even modest efforts to exceed baseline expectations can pay dividends in customer loyalty. Best practice dictates that you provide basic, quality service to all customers and reserve high-touch service opportunities for high-value customers. But how do you recognize best customers when they walk into your store, call in, or complain on your Facebook page? That’s where customer data and insight can spell the difference. The ultimate winners in the marathon race for customer loyalty will be those marketers who develop a holistic, analytical view of customer relationships by linking data from loyalty, CRM, web, social, and mobile © 2013 Aimia Inc. All Rights Reserved. channels. But if that blessed day has not yet arrived, you can take smaller, immediate steps to improve baseline customer service, as well as provide opportunities to exceed best customer expectations: >> Deploy the right tools. U.S.-based home improvement retailer Lowe’s recently outfitted its 1,700+ stores with Wi-Fi and iPhones for associates to improve in-store service by, for example, helping customers search for products online and buy them on the spot. Associates can also cross-reference answers to questions posted to the retailer’s Facebook and Pinterest pages with links back to the company’s website to provide cost estimates and product numbers. As well, UK-based British Airways recently deployed 2,000 iPads for data capture. The airline said the biggest benefit was just having customer information in hand and being able to offer local travel tips and advice to passengers on select long-haul flights. >> Refocus on the customer. Lowe’s rival, U.S.-based retailer Home Depot, is famously returning to its roots as a customer-centric enterprise. For instance, the retailer has recently expanded its “Customers First” initiative to include “Power Hours” where associates focus on in-aisle customer service during high-traffic times. The retailer is also training associates to analyze customers’ shopping carts to suggest missing products required to complete a home improvement task.
  11. 11. Inflection Points / 9 CONNECTING THE DATA DOTS Modern loyalty systems must allow for the capture of brand interactions throughout the purchase cycle — before, during, and after the transaction Reward and recognize customers to encourage them to provide data, link data sources, and identify themselves during transactions Link search data to provide targeted, relevant offers Link social data to reward and recognize brand interactions, likes, and referrals Link location data to encourage time shift, cross-sell, and up-sell Link loyalty program data to connect insight to transactions © 2013 Aimia Inc. All Rights Reserved.
  12. 12. 10 / Inflection Points IX: WHEN YOU ANTICIPATE HER NEEDS Steve Jobs once reportedly said of Apple customers, “People don’t know what they want until you give it to them.” To deliver a flawless customer experience, the brass ring is the ability to use customer data, multichannel communications, and predictive analytics to send a relevant offer or fulfil a customer’s need before she’s even aware that her need is unfulfiled. With today’s modern loyalty technology and analytic platforms, that brass ring is within reach. But if your touch points can’t talk to each other, then this promise may go unrealized. Nurturing loyalty requires rewarding and recognizing best customers, anticipating their needs, and guiding them through a relevant, personalized customer journey. But even if your marketing resources and technology are not yet at the level required to deliver real-time offers based on sophisticated predictive models, there are still relatively simple steps you can take to anticipate and fulfil your customers’ needs. Here are two: >> Help your channels talk to each other. Even with today’s web-enabled commerce, call centers are still critical customer touch points. But very often, call center staff can’t see what offers the customer has received or responded to — which can lead to conflicting or duplicative communications. Providing your call center staff with customer profiles allows them to reinforce existing offers or make the next offer — leading to additional sales and a better customer experience. >> Practice surprise and delight. U.S. online retailer Zappos is famous for its surprise-and-delight customer experience efforts, such as upgrading a percentage of first-time purchasers to overnight shipping as a way to reinforce relationship value. Adopt these tactics with high-value customers to create personal, emotional connections. The bonds you create will demonstrate commitment and fuel both trust and reciprocity in your customer relationships. X: WHEN SHE SINGS YOUR PRAISES If there is a holy grail for marketers, it’s that moment when a best customer becomes your vocal advocate. Whether she gives you a glowing review on a social network, tweets about a great experience, or forwards a new product offer to her inner circle, her advocacy exponentially increases the value of the relationship. With the right technology, you can identify, reward, and recognize these customer advocates and reap the benefits. Not all best customers are vocal advocates — but all vocal advocates are potentially best customers. In fact, in Aimia’s Canadian retail research, 39 percent of “high switchers” liked a brand on Facebook, which is 2.6 times higher than that of consumers loyal to their retailer. As well, they are 3.5 times more likely to tweet about a brand and 2.4 times more likely to comment on Facebook. © 2013 Aimia Inc. All Rights Reserved. The retailer also hosts a blog and Creating advocacy requires more than just raising your aggregate YouTube channel especially for Net Promoter Score. It requires the them. By providing these platforms ability to connect the data dots from for mutual interaction, Walmart your social media and web channels makes these customer relationships to your core purchase data. It also more valuable — both to the requires the analytical ability to retailer, and to the Walmart Moms. understand which of your advocates are really impacting your bottom >> Give advocates a seat at the line, and the means to reward table. In 2011, Google held its them accordingly. And finally, it inaugural Global Top Contributors requires seamless, multichannel Summit at its Mountain View, communications that send the right California headquarters. These messages to the right customers Top Contributors are not Google through the right channels. Here are employees, but rather Google a few other ways you can help foster advocates — in this case, unpaid customer advocacy: product forum participants. Google rewarded them for their >> Exploit the network effect. loyalty, sought their feedback, Customer networks become more and offered educational resources valuable when you give customers to help them become better a platform to talk to each other, advocates. Toy manufacturer as well as to you. For example, Lego has even turned some Walmart flies a handpicked, fanatical Lego customers into exclusive club of 20 influential paid employees who evangelize bloggers dubbed the “Walmart about Lego and help design new Moms” to its Bentonville, Arkansas headquarters to test new products. product lines.
  13. 13. Inflection Points / 11 SEIZING THE MOMENTS These 10 inflection points mark the most critical stages in a customer’s journey from newly acquired to brand advocate. By deploying loyalty systems, analytical tools, and best practices, you can ensure deeper relationships, enhanced loyalty, and greater lifetime value. BEFORE SHE WALKS IN THE DOOR AT THE FIRST SIGN OF TROUBLE DURING A LIFE CHANGE WHEN SHE JOINS YOUR LOYALTY PROGRAM Break down the data silos and leverage analytics to identify high-potential customers. Use customer data and in-store technology to improve service. Deliver personalized, relevant offers to help her navigate the journey. Make enrolment seamless and demonstrate immediate program value. 1 2 3 4 DURING MAKE-GOOD OPPORTUNITIES DURING PROGRAM REDEMPTIONS AT THE FIRST SIGN OF LIFE Connect your touch points to resolve service issues across channels. Deliver a flawless redemption experience and add value through partnerships. Reward early signs of relationship engagement with positive reinforcement. 7 6 5 WHEN YOU EXCEED EXPECTATIONS WHEN YOU ANTICIPATE HER NEEDS WHEN SHE SINGS YOUR PRAISES Deploy the right tools and training to go above and beyond for best customers. Distribute customer profiles across service channels to fulfil a need before she’s even aware that her need is unfulfiled. To foster advocates, give best customers a voice and a seat at the table. 8 9 10 © 2013 Aimia Inc. All Rights Reserved.
  14. 14. 12 / Inflection Points ABOUT THE AUTHORS Cindy Faust, Vice President, Product Management Cindy Faust drives strategy, development, and revenue of new and existing products to help position our clients for success. She is responsible for setting the strategic direction of product development based on client and market needs, and works in close collaboration with our clients and all areas of the Aimia business, both in the U.S. and globally. loyalty technical solutions for clients in the financial services, travel and hospitality, retail, CPG and telecom industries. She joined the company in 2005 with a main focus on business development for new loyalty programs. Prior to joining Aimia, Cindy held various IT leadership positions with Carlson Companies and GE Capital ITS. She started her career at Entex Technical Solutions as a consultant on the American Express account. Prior to her current role, she was VP, Loyalty Technology Services, aligning information technology design and delivery with other Aimia capabilities to create fully integrated customer and business loyalty marketing programs. Before this, she was Senior Director, Technology Services, delivering consumer Cindy is a member of the IT Service Management Forum and is a Menttium alumna. She earned various collegiate degrees including an MBA from the University of Minnesota’s Carlson School of Management. In addition, Cindy was a contributing author for the IHRIM Shared Services book, Transforming the Organizational Mindset to Embrace Shared Services. Paul Sage, Product Management Director, Loyalty Management Systems — U.S. brought on board three fully integrated loyalty programs in CPG and retail during 2011/12. Paul Sage is responsible for product strategy and positioning of Aimia’s Loyalty Platform within the U.S. region. Paul coordinates client collaboration, market analysis, and industry leader feedback to inform the global product development of requirements for ongoing investments in the Loyalty Platform. His responsibilities extend to delivering sales tools, product management processes, content, and positioning for all aspects of the product. Prior to Aimia, Paul was on the board of a UK social enterprise organization supporting NGOs, charities and not-for-profits in their efforts to leverage social media to drive donations and communications. As well, Paul is owner of a UK marketing consultancy firm specializing in securing government digital presences. Prior to his current role, Paul managed the IT architecture and consulting team in the U.S. region. As part of his responsibilities, he repositioned the team to a product strategy and sales engineering team which secured and With two decades of international experience Paul has worked extensively with marketing services and data analytics organizations in the United Kingdom, United States and Asia for clients in oil and gas, financial services, retail, high tech, government, non-profit and CPG verticals. About Aimia Aimia Inc. (“Aimia”) is a global leader in loyalty management. Employing more than 4,000 people in over 20 countries worldwide, Aimia offers clients, partners, and members proven expertise in launching and managing coalition loyalty programs, delivering proprietary loyalty services, creating value through loyalty analytics, and driving innovation in the emerging digital, mobile, and social communications spaces. Aimia owns and operates Aeroplan, Canada’s premier coalition loyalty program, Nectar, the United Kingdom’s largest coalition loyalty program and Nectar Italia, Italy’s first independent loyalty coalition program. In addition, Aimia owns stakes in Air Miles Middle East, Mexico’s leading coalition loyalty program, Club Premier, Brazil’s Prismah Fidelidade, and i2c, a joint venture with Sainsbury’s offering insight and data analytics services in the UK to retailers and suppliers. Aimia also holds a minority position in Cardlytics, a U.S.-based private company operating in transaction-driven marketing for electronic banking. Aimia is listed on the Toronto Stock Exchange (TSX: AIM). Visit us at www.aimia.com. © 2013 Aimia Inc. All Rights Reserved.
  15. 15. Inflection Points / 13 SAMPLE OUR BRAIN FOOD. Sample some of our loyalty thought leadership in the Knowledge section at aimia.com. THE FOUR FUTURES: The Digital Loyalty Survey By Martin Hayward, Vice President, Global Digital Strategy To help marketers divine the proper strategy for navigating the digital future, Aimia has conducted a research study designed to understand consumers’ current attitudes and opinions about data sharing and control, the role of digital media in their lives, and about the nature and frequency of digital marketing communications. We found that marketing success in the digital future will depend upon how well marketers use data to build relationships dependent on two primary variables: the degree of engagement, and the degree of consumer control over their personal information. THROWING OFF SPARKS : Reigniting Retail Loyalty Programs By Alan Goldstein, Vice President, Managing Director Retailers attract loyal customers based on the quality of their products, a positive customer experience, and competitive prices. Loyal customers respond by buying more, buying more often, and telling their friends. To reach your relationship potential with your best customers, you must reignite your customer strategy — and fan the flames continuously — through data-driven marketing, a robust value proposition, and dynamic customer segmentation. It’s the best way to keep the sparks flying. MOVING PICTURES: The Future of Customer Loyalty in Canada By Kevin O’Brien, Chief Commercial Officer, Aeroplan and Michael O’Sullivan, President Proprietary Loyalty, Canada While portraits of customer behaviour used to be static, they’re now moving targets which scroll into the past like social media news feeds. Loyalty marketing offers the best set of tools available for capturing these moving pictures. THE RISE OF THE SAVVY SHOPPER: The Impact of the Recession on Customer Loyalty By Maria Sealy, Director of Research Services The recession may be over, but its impact still reverberates everywhere. From the corner shop to the high street or shopping mall. Despite the stark headlines, however, the news isn’t all bad. Even as the going has gotten tougher, some brands have risen to the challenge and built loyalty around customer experiences, redemption touchpoints and the value exchange. © 2013 Aimia Inc. All Rights Reserved.
  16. 16. 14 / Inflection Points YOUR BUSINESS RESULTS DELIVERED OUR INSIGHT With more than 4,000 talented professionals in 20 countries, we can deliver results for your business using our loyalty insights. We see relationships differently. Visit us at aimia.com. © 2013 Aimia Inc. All Rights Reserved.

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