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Kobie Quarterly Review: Restaurant and Retail Edition - 2014 - Learn More at Kobie.com

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Over the past decade, several major factors have significantly disrupted the retail and restaurant industries: including the evolution of eCommerce, the rise of social media, and most significantly, mobile devices and the broader mobile channel. All of these channels – as well as the insights into consumer behaviors they provide – have influenced loyalty marketers and the way they design their campaigns and programs.

Examining the restaurant and retail sectors specifically, two industries that were already heavily social, these trends have created more opportunities for increased customer engagement through social media channels, location-based messaging, ramification and innovative rewards structures. And, with digital and mobile playing an integral part in consumer purchasing decisions, omnichannel loyalty is shaping the consumer experience.

Other key trends include Millennials, the generation of younger consumers whose lives are driven by technology. Spending
a collective $600 billion in-store and online each year, marketers are using trends in technology to capture their
attention. With innovations like Google Glass and the SmartWatch becoming part of Millennials’ daily wardrobe, analysts
predict that wearable technology sales will reach 90 million units in 2014 and more than 485 million by 2018.

Looking back (and ahead), other technologies have taken what was once a predominately brick-and-mortar shopping or
dining experience and transformed them into a virtual experience heavily controlled by the consumer. A large factor in
this change is the mobile device, now ubiquitous across every demographic and consumer spending category.

In this Kobie Quarterly Review: Restaurant and Retail Edition, our goal is to educate those responsible for developing
and running loyalty programs about the trends impacting loyalty today, with a focus on retail loyalty trends and the
innovations, challenges and opportunities facing restaurant customer loyalty and rewards programs. Within these two
industries, we highlight successful programs and the methodology behind them; looking at the impact of Millennial
shoppers and diners and how they are slowly creating a societal shift in loyalty and consumerism.

Taking all that we’ve seen and learned so far this year, as loyalty marketers, our collective goal should be to integrate the
most effective technologies, look closely at our program design and think deeply about how well we know our customers
– and if we’re truly rewarding them.

As you read through this report, there is one ultimate truth we hope you take with you: With customer preferences
constantly in flux, and today’s technology becoming tomorrow’s news, loyalty marketers should understand that real
customer loyalty depends on how willing you are to adapt to the change.

Published in: Retail, Business, News & Politics
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Kobie Quarterly Review: Restaurant and Retail Edition - 2014 - Learn More at Kobie.com

  1. 1. KOBIE QUARTERLY REVIEWJULY 2014 on.fb.me/17n5zxV @Kobie_Marketing linkedin.com/company/kobie-marketing kobie.com 21 THE TRUTH ABOUT LOYALTY PROGRAMS & MOBILE APPS 18 HOW RESTAURANTS ARE INTEGRATING LOYALTY PROGRAMS 08 RESTAURANT & RETAIL LOYALTY: WHAT’S HAPPENING IN 2014? & RESTAURANT & RETAIL EDITION
  2. 2. KOBIE QUARTERLY REVIEW 3 FEATURED CONTENTS With change being the only con- stant in business today, loyalty 08 RESTAURANT & RETAIL LOYALTY: WHAT’S HAPPENING IN 2014? When it comes to developing true customer loyalty, restaurant operators and retailers must learn how to engage with consumers beyond the discounts and deals dichotomy. Counter to popular thinking, it’s the relationship building, not frequency, that’s vital for loyalty. 18 TABLE TALK: INDUSTRY IN- SIGHTS INTO HOW RESTAU- RANTS ARE INTEGRATING LOY- ALTY PROGRAMS Separate from other marketing initia- tives, loyalty programs give restaurant operators direct insight into what guests think about their menu items, staff and overall quality of service. 11 THE SECRET SAUCE IN SUCCESS- FUL RETAIL AND RESTAURANT LOYALTY PROGRAMS Loyalty programs have proven to be a highly effective way for brands to increase customer interaction, determine purchasing preferences and show appre- ciation to their loyal customer base. 21 THE TRUTH ABOUT LOYALTY PROGRAMS AND MOBILE APPS If you still think that mobile devices are just gadgets, think again. They have become the center of consumers’ daily lives and how they engage with the world. And a critical channel for brands to be a part of those lives, too. 14 THE MILLENNIAL MINDSET Millennials represent a growing eco- nomic force for the restaurant and retail sectors. They might be small in terms of age, but their future spend- ing power alone serves up a veritable goldmine. 05 LOYALTY TRENDS AND INNOVA- TIONS: IN PERSPECTIVE With change being the only constant in business today, loyalty programs (and their IT teams and designers) are con- tinuously challenged with adapting and evolving their programs to anticipate and keep up with consumer, commerce and technology trends.
  3. 3. KOBIE QUARTERLY REVIEW4 Over the past decade, several major factors have significantly disrupted the retail and restaurant industries: including the evolution of eCommerce, the rise of social media, and most significantly, mobile devices and the broader mobile channel. All of these channels – as well as the insights into consumer behaviors they provide – have influenced loyalty marketers and the way they design their campaigns and programs. Examining the restaurant and retail sectors specifically, two industries that were already heavily social, these trends have created more opportunities for increased customer engagement through social media channels, location-based messaging, gamification and innovative rewards structures. And, with digital and mobile playing an integral part in consumer purchasing decisions, omnichannel loyalty is shaping the consumer experience. According to a recent report by MIT, 80% of shoppers check prices online before making a purchase, 1.1 trillion in-store sales are influenced by the web, $12 billion in retail sales are made on mobile devices and $252 billion in revenue results from online shopping. Other key trends include Millennials, the generation of younger consumers whose lives are driven by technology. Spend- ing a collective $600 billion in-store and online each year, marketers are using trends in technology to capture their attention. With innovations like Google Glass and the SmartWatch becoming part of Millennials’ daily wardrobe, analysts predict that wearable technology sales will reach 90 million units in 2014 and more than 485 million by 2018. Looking back (and ahead), other technologies have taken what was once a predominately brick-and-mortar shopping or dining experience and transformed them into a virtual experience heavily controlled by the consumer. A large factor in this change is the mobile device, now ubiquitous across every demographic and consumer spending category. A recent Forrester report predicts that more consumers will be using m-payments, or paying using their mobile device, in 2014. These mobile payments are expected to grow by 43% each year, bringing in an anticipated $90 billion by 2018. In this Kobie Quarterly Review: Restaurant and Retail Edition, our goal is to educate those responsible for developing and running loyalty programs about the trends impacting loyalty today, with a focus on retail loyalty trends and the innovations, challenges and opportunities facing restaurant customer loyalty and rewards programs. Within these two industries, we highlight successful programs and the methodology behind them; looking at the impact of Millennial shoppers and diners and how they are slowly creating a societal shift in loyalty and consumerism. Taking all that we’ve seen and learned so far this year, as loyalty marketers, our collective goal should be to integrate the most effective technologies, look closely at our program design and think deeply about how well we know our custom- ers – and if we’re truly rewarding them. As you read through this report, there is one ultimate truth we hope you take with you: With customer preferences constantly in flux, and today’s technology becoming tomorrow’s news, loyalty marketers should understand that real customer loyalty depends on how willing you are to adapt to the change. How many changes will you make this year? Let’s find out. Michael Hemsey, President Kobie Marketing FROM OUR PRESIDENT
  4. 4. KOBIE QUARTERLY REVIEW 5 By Nancy Berg Statistics show that existing customers spend 67% more on a brand than new cus- tomers. While this shouldn’t be a reason to ignore new customer acquisition, the importance of an evolving customer reten- tion strategy should not be underestimated, either. With constant changes in the way business- es operate, loyalty program organizers are continually challenged with modifying their programs to keep with the trends while con- tinuing to drive value and engagement. Here are some of the top loyalty program trends that we’re seeing across major indus- tries in 2014, and the brands who are apply- ing them most effectively: Retail For retail loyalty programs, 2014 is the year of the “seamless” transition between brick and mortar, online and mobile shopping. Today more than ever, advances in mobile and online technology make it possible for consumers to have a complete virtual shopping experience – one that includes fast and free shipping, re- turns and exchanges, and the ability to return online items to the nearest physical location. To stay ahead of the trends, Looking at 2014 trends in the retail, financial, travel, telecommunications and entertainment sectors LOYALTY TRENDS & INNOVATIONS IN PERSPECTIVE
  5. 5. KOBIE QUARTERLY REVIEW6 more retailers are hosting plat- forms for mobile loyalty programs to track customer purchases and document preferences, facilitating mobile payments, and using GPS technology to send relevant offers to shoppers’ mobile devices. When tracking these purchases, smart re- tailers are also using the data they collect to learn more about individ- ual customers, offer personalized shopping recommendations and ultimately connect with shoppers in store. Most prevalent in custom- er loyalty today is the integration of social media. According to the Walker Sands’ 2014 Future of Retail study, 78% of modern consumers interact with social media channels like Facebook, Pinterest and Twitter to learn more about the brand, get discounts and special offers, and read other customer re- views. Success Story: Amazon.com has mastered the art of personalized recommenda- tions with customized pages like “Related to Items You’ve Viewed,” “Inspired by Your Shopping Trends” and “Recommendations for You.” By doing so, Amazon is capitalizing on the fact that users are more like- ly to purchase products based on relevant offers – a business practice that has industry experts predicting Amazon to bring in $100 billion in revenue in 2014 alone. Financial Services Between 2006 and 2012, the finan- cial services industry witnessed an increase in loyalty program membership by 130%. However, as technology rapidly changes and Millennials become the future of this industry’s growth, more loyalty program participants demand products and services that coin- cide with their lifestyle. An esti- mated 83% of consumers believe they should be rewarded for their loyalty to the brand, and 93% want banks to tailor rewards to their individual circumstances. In line with this changing lifestyle, experts believe that financial services loy- alty programs in 2014 will continue to build an omnichannel approach – integrating more mobile tech- nology and social media – where banks can em- power program members using compelling en- gagements and personalized messages sent through multiple channels of com- munication. With mobile and social platforms mak- ing it easy for users to access their accounts, read member reviews and deposit money quickly and easily – and banks giving consum- ers more incentives to grow their rewards – banking has become more practical and efficient than ever before. Success Story: The industry con- tinues to compete aggressively for new acquisitions—lots of different sizes and flavors. The Chase Sap- phire Preferred Card is incentivizing consumers by giving away 40,000 bonus points for program members who spend $3,000 on the card during their first three months. Chase’s Marriott Rewards Card offers 1 FREE night plus 70,000 points for members that spend $2,000 on the card in the first two months. Citi’s American Airlines Card offers 50,000 miles for spending $3,000 in the first three months. And, American Express is trumping them all with a 100,000 mile incentive for spending $10,000 on the Business Platinum Card in the first three months. Travel According to recent studies, more than 238 million U.S. travelers have travel loyalty program member- ships. Frequent Flyer programs built the roadmap for formal loyalty programs in the early 80’s. They have a reputation for being some of the largest and most popular programs in the industry; and have long been known for attracting active and inactive members by expanding the program with earn/ burn activities that go well beyond airline trips only, However, only 44% of these consumers are actively engaged with the program – and 50% believe they are actually limiting their value by enrolling in memberships that only focus on one airline alliance or hotel chain. So how is 2014 responding to this issue? With more Millennials making up the bulk of travelers, 2014 has witnessed new loyalty strategies 83% of consumers believe they should be re- warded for their loyalty to a brand. 238 million U.S. Travelers have travel loyalty program memberships.
  6. 6. KOBIE QUARTERLY REVIEW 7 that incorporate social media, mobile usage and digital behavior to gain real insight on consumer preferences and increase their level of engagement beyond their flight or hotel stay. On the burn side, expanding rewards and promoting miles/points + cash, such as ‘mix and match’ rewards, and access to once in a lifetime experiences con- tinues to resonate well. And with 25% of airline and hotel program members begging for rewards they can actually redeem, 2014 travel loyalty programs are opting for flexible points options that keep Millennials coming back for more. Success Story: Recognized as a top hotel program at the 2014 Flyer- Talk Awards, Starwood’s Preferred Guest program offers customers flexibility by allowing members to transfer rewards to different airlines and combine points and cash to book rooms. Telecom Whereas restaurant patrons and retail shoppers can benefit from incentives that keep them coming back frequently, telecommunica- tions loyalty programs have a dif- ferent challenge. Many customers sign annual contracts and brands have less opportunity to grow sales through increased additional lines, so programs had to think differ- ently. Telecom brands have seen significant success leveraging loyal customers for referrals through formal Refer-A-Friend programs. They also are leveraging technolo- gy advancements including mobile integration, cloud computing and sensing technologies to collect important data about customers to drive growth, while social media outlets serve to connect potential consumers with brands and offer incentives to earn loyalty rewards. Incenting incremental behaviors is also a rising opportunity for tele- com loyalty in 2014. As spectrum constraints impact profitability, incremental behaviors that drive revenue and decrease expense, such as getting the customers to pay their bills on time or incenting them to enroll in paperless billing, has real im- pact on the bottom line. Success Story: The popular mo- bile phone carrier, Sprint, used their Ninja Ambassador Program to train 3,000 employees to reach out to customers through various social media channels – like Facebook, Twitter, LinkedIn, You- Tube, community forums and more – on pre-selected topics to facili- tate customer engagement. Entertainment For the entertainment industry, where attendance is less regu- lar, brand loyalty should focus on expanding purchasing at the POS. While many entertainment brands have focused on new customer acquisition, more recently they’ve recognized the importance of segmenting their customer base and leveraging ways to retain their most loyal customers. In 2014, loyalty program organizers are curbing these issues by finding innovative ways to engage mem- bers through multiple channels – like mobile apps, smartphones and gamification – and using collected data from customer interactions to gain customer insight. Using modern technology to promote benefits, these brands are devel- oping more relevant offers to send to program members that are both attractive and valuable. Success Story: Disney’s new “Magic Bands,” computerized wristbands containing Ra- dio-frequency identification (RFID) technology, allow team mem- bers to identify guest preferences and personal infor- mation by scan- ning their band. Through this same technology, visitors can collect Fastpasses for popular rides, make payments, order park- ing passes and access their resort rooms – data that is all collected – giving Disney team members more flexibility to have meaningful inter- actions with resort and park guests throughout their stay. Keeping these trends in mind, loyalty marketers across all indus- tries can gauge opportunities for data collection that can lead to meaningful customer interactions, increased consumer trust and in- fluence purchasing behaviors and decisions.
  7. 7. KOBIE QUARTERLY REVIEW8 As restaurants and retailers seek out creative ways to deepen en- gagement with new and existing customers, the performance of these brands’ loyalty programs is being more closely monitored than ever before. And whether the goal is to entice patrons to return to a restaurant or promote the opening of a new store, for loyalty programs to deliver on these per- formance goals in 2014, market- ers need to move beyond simple behavior/reward models and strike a balance between strategy and the channels they engage custom- ers on. Finding this balance will require a deeper understanding of what customers are looking for, as well as a broader knowledge of the loyalty landscape in the restaurant and retail space. Research has found that the top three external marketing priorities of Chief Marketing Officers in 2014 are customer acquisition, giving customers a personal experience and customer engagement. To- day’s CMOs are also responsible for revenue growth, adding anoth- er “bottom-line” priority to their growing list. And they have to work more closely with CIOs in order to ensure their loyalty programs are seamlessly integrated into other functions of the organization. In other words, loyalty programs are being held to a higher standard, with technology innovations and strategy being set as top priorities. And as CMOs continue to stream- line their loyalty programs in the retail and restaurant industries, there are four themes they should focus on to increase loyalty growth: personalization, omnichannel loyal- ty, mobile integration and integrat- ed multi-tender loyalty. Here is a deeper look at some of the key trends loyalty programs in the restaurant and retail sector are utilizing in 2014: Personalization While personalizing the loyalty experience ultimately increases the chance of driving a positive cus- tomer response to a campaign or promotional message, restaurants and retailers need to make sure they use personalization selectively. Marketers need be careful to moni- tor customer sentiment - especially for emerging channels like mobile and social media. Although the messaging and incentives may be personalized, excessive use of this approach can overwhelm consum- ers, and lose the “personal” experi- ence that the message was meant to communicate in the first place. In 2014, for example, CMOs have realized that personalization does not need to be as far reaching as planned, but only focus on reach- ing consumers in a way they will actually respond to. Think about it. If marketers know a particular consumer responds best to mobile interaction, it would be pointless to personalize their marketing through direct mailings just be- cause a similar group of consumers may have, at one point, respond- ed positively in that manner. The challenge, therefore, is to find the perfect balance between enticing customers with a personalized message through their preferred channel while refraining from be- coming too invasive. Omnichannel Loyalty Personalization goes hand-in- hand with omnichannel loyalty. With advancements in technology powering the way brands connect with their customers, the expecta- tions of those shoppers and diners have also become higher as they demand relevant information – on relevant channels. Knowing this, and recognizing trends in how con- sumers operate, restaurants and retailers agree that omnichannel loyalty gives them a way to reach consumers in a way that will really resonate. Omnichannel loyalty can help to drive: • More Connections with Consum- ers: Today more than ever, customer shopping and dining has become a tech-driven experience. Research, recommendations, reviews and brand RESTAURANT AND RETAIL WHAT’S HAPPENING IN 2014?
  8. 8. KOBIE QUARTERLY REVIEW 9 LOYALTY TRENDS: interactions can happen digitally, be- fore consumers even enter a store, and ultimately affect purchasing decisions. Modern consumers are technological- ly savvy shoppers and diners – due, in part, to the prevalence of smart- phones, social media, gamification, GPS technology and big data. • Real-Time Program Feedback: Through omnichannel marketing, restaurant and retailers can capture data in real-time and use this infor- mation to entice individual customers through communication channels they prefer. By doing so, loyalty program organizers can tailor messaging to impact consumers and increase their chances of gaining a response. • Smarter Methods for Smarter Cus- tomer Retention: Omnichannel loyalty provides customer insights that allows marketers to leverage real-time data and in turn build custom rewards programs that are both timely and relevant. Mobile Integration Mobile continues to be an inte- gral part of restaurant and retail loyalty programs and marketing campaigns – and if the rate of cus- tomer adoption is any indication, the importance of mobile strate- gy shows no sign of diminishing anytime soon. For loyalty programs in the restaurant and retail space, mobile technology is essential to maintaining an engaged and active customer base, giving CMOs one of the most direct channels in which to interact with their customers and gain real-time insights. In recent years, the prevalence of mobile devices has paved the way for mobile wallets. Allowing customers to make secure in store payments, without needing a credit or debit card, mobile wallets are making consumer purchasing eas- ier and more convenient than ever before. For loyalty programs, this puts all of a customer’s information at their fingertips – like rewards statistics, payment information and credit card data – using nothing more than the consumer’s personal smartphone. According to recent studies, 43% of all smartphone users, nearly 113 million consum- ers, will use mobile wallets by 2017. If they don’t fit already, current loyalty programs are being formatted to be able to integrate with mobile payment platforms for future customers. Due to the rise of interactive mo- bile technology, gamification has become a popular way for busi- nesses to keep consumers actively engaged and entertained. Giving customers the opportunity to earn points and redeem rewards for purchases or free items, gamifica- tion is all about making the most of modern technology. It adds a level of competitiveness to the loyalty experience and by embedding games into the loyalty program, gamification creates a loyalty envi- ronment where members are chal- lenged, incentivized and engaged in a way that brings a level of fun and entertainment to a program. Integrated Multi- Tender Loyalty (IMTL) As today’s CMOs are increasingly more responsible for the revenues of a brand, integrated multi-tender loyalty (IMTL) presents an ideal opportunity to bring together a retailer’s credit card and loyalty program; which oftentimes existed in parallels or competed with each other. Historically, loyalty programs and retail credit programs were executed as sepa- rate customer-facing programs, with little to no integration. Many retailers struggled with a lack of unified loyalty branding and seamless integration between multi-tender and credit programs, often resulting in confusion among associates and customers...and lower engagement levels. IMTL brings an integrated approach that delivers one seamless experience to engage all customers - regard- less if it’s through credit. By Mary Falleson 43% of smartphone users will use mobile wallet by 2017
  9. 9. KOBIE QUARTERLY REVIEW10 Furthermore, it provides retailers with a new way of getting to know their customers better and building stronger and more profitable long- term relationships by combining multiple CRM, credit and loyalty program platforms into a single integrated data warehouse. This means that decisions on all tenders (payment types) are reflected in one place. With customization and personal- ization being critical to the success of today’s loyalty programs, ITML’s approach provides retailers with more information about the wants and needs of all customers. This creates value for members by using data to deliver personalized offers that create the right emotional connection, leading to more op- portunities for those customers to earn and redeem in an omnichannel manner. With a renewed focus on ROI and revenues, CMOs who capitalize on these trends will be the differenti- ator for a high preforming loyalty program in 2014. There are more consumers enrolling in loyalty programs today than ever before and the retail sector owns 39% of those memberships. CMOs that embrace the advancements in per- sonalization, omnichannel loyalty, mobile integration and integrated multi-tender loyalty are ensuring a deeper level of engagement and an enriched member experience for years to come.
  10. 10. KOBIE QUARTERLY REVIEW 11 THE SECRET SAUCE: SUCCESSFUL RETAIL AND RESTAURANT LOYALTY PROGRAMS Two case studies that demonstrate how loyalty programs can be used to influence customer behaviors By Bram Hechtkopf For decades, loyalty programs have been a very effective tool for retailers to encourage new business and grow their customer relationships. Loyalty in restaurants, on the other hand, is a concept that some marketers have overlooked. Yet loyalty strategies in both sectors have quite a lot in common, and are a primary way for restaurants and retailers alike to boost customer interaction with their brands, determine purchasing preferenc- es and demonstrate their appreciation for their customer base. Following are two loyalty programs - one retail and one restaurant - that have demonstrated effective ways to influence consumers’ behaviors, increase their engagement with the brand and grow their programs: Red Robin Royalty Program With more than 30% of its patrons under the age of 18, Red Robin is strong in the family category – and has targeted its Red Robin Royalty program to include benefits and rewards suitable to diners of all ages. First tested in 2011 in 75% of the restaurant’s loca- tions across the United States, this customer rewards program currently stands at 2.7 million members and climbing. The program continues to attract new cus- tomers with the right incentives and rewards existing members with redeemable for free gifts and special deals throughout the year, for example: • A one-time, instant free appetizer for registering • A free gourmet burger in the diner’s birthday month • After ordering nine items, a tenth item free Various “surprise and delight” offers throughout the year Why Does Red Robin’s Royalty Program Attract Members? Using omnichannel marketing to reach a diverse customer base across all the channels their members use, Red Robin has found ways to drive dine-in traffic through interactive social media initiatives, mobile marketing and targeted online messaging. Further- more, by swiping the customer’s Red Robin Royal- ty card, team members get immediate access to a customer’s rewards status so they can redeem those rewards accordingly. What Can Restaurants Learn from Red Robin? Capitalizing on the idea that dining frequency, prefer- ences and interactions constantly change, Red Rob- in Royalty’s road to redemption centers around its adaptability and ability to heed customer feedback and react accordingly. One of the most popular na- tional casual dining chains today, Red Robin’s loyalty program continues to grow: in 2013, the chain wit- nessed a 4.1% revenue increase to $1 billion annually. Following this trend in 2014, Red Robin expects sales to increase exponentially as 25 additional locations open, boosting the number of potential Royalty par- ticipants at restaurants nationwide.
  11. 11. KOBIE QUARTERLY REVIEW12 Bloomingdale’s Loyallist Rewards Program Bloomingdale’s Loyallist strategy is simple: reward consumers for every dollar spent, through any form of payment, at any time. Whether program members shop in-store, online or at the outlet stores – or use cash, credit, or the Loyallist card – they earn Loyallist points. At certain times throughout the year, these “Loyallists” can earn double, triple and quadruple points, and the more they earn, the more benefits they receive – like free shipping and “Power Points” shop- ping. For every 5,000 points earned, members receive a $25 Bloomingdale’s gift card, regardless of their status in the program. While Bloomingdale’s traditionally focused on an older audience, marketing executives have recog- nized the rise of the Millennial shopper. Tailoring their rewards towards this demographic, they have incor- porated mobile and Bluetooth technology into their marketing initiatives, and have eliminated the need for a credit card – giving younger shoppers the ability to join the program without eliminating their eligibility to join without credit. Why Does Bloomingdale’s Loyallist Program Attract Shoppers? Capitalizing on mobile trends and store locations to drive in-store traffic, Bloomingdale’s is leveraging Bluetooth technology to promote the Loyallist pro- gram to mall shoppers in real-time and in-location - offering potential customers incentives to join the Loyallist program and earn rewards points for every dollar they spend on their Bloomingdale’s card. Using localized technology (geofencing and proximity) designed to scan for Bluetooth devices throughout the mall, the retailer’s marketers are able to send special “opt in” prompts – only one per customer, per mall visit – related to a pre-selected brand or prod- uct carried at Bloomingdale’s. If these mobile users agree to opt in to the messaging, they can download content related to that brand or product; or in some cases, a high definition video explaining how they can become Loyallist program members and save. Outside of this initiative, Bloomingdale’s marketing team has also invested heavily in different mobile applications that give their customers the ability to access Loyallist cards, balances and rewards through their personal smartphones, regardless of location, thus easing the purchasing process overall. What Can Retailers Learn from Bloomingdale’s? Bloomingdale’s Loyallist program is successful be- cause it focuses on the one goal all loyalty programs should strive for: giving members relevant rewards they can actually use. When Loyallist cardholders spend money – any kind of money – they are reward- ed with points they can later convert to payment; which encourages these shoppers to return to the store and spend even more on future purchases. By rewarding loyal customers with tiered points’ earnings, this program demonstrates Bloomingdale’s commit- ment to their customers; and in turn, makes custom- ers more committed to the brand. Finally, it offers a straightforward and distinctive program that attracts new customers – emphasizing the notion that the key elements of any successful loyalty program are sim- plicity, attainable rewards and a collection of points that customers can identify with and actually use. What do these loyalty programs have in common? They demonstrate brands that have tailored their loy- alty programs based on what benefits their custom- ers use the most; factoring in technology, marketing initiatives, rewards and the constant push to better understand their customer base. The Bottom Line: Brands who invest in their dining or in-store/venue experience with timely incentives that add value and are relevant to consumers stand to gain from increased membership, greater customer engagement and bottom line growth.
  12. 12. KOBIE QUARTERLY REVIEW 13 5000points= $25 Rewards Card Bloomingdale’s loyallist strategy rewards consumers for every dollar they spend, through any form of payment, at any time The program’s rewards & benefits are suitable for members of all ages, including - A one-time free appetizer for registration - A free birthday gourmet burger - After ordering nine items, the tenth is free - Various “surprise and delight” offers throughout the year Rewards are tailored for different demographics, and with bluetooth and mobile technology the program has eliminated the need for members to have credit 30%of the restaurant’s patrons are under 18 During select times of the year loyallists can earn double, triple, & quadruple points Red Robin uses omnichannel marketing to reach a diverse customer base Traffic is driven through social, mobile & online messaging Team members have immediate access to member data at POS BOTH HAVE TAILORED THEIR LOYALTY PROGRAMS BASED ON WHAT BENEFITS THEIR CUSTOMERS USE THE MOST BY FACTORING IN TECHNOLOGY, MARKETING INITIATIVES, REWARDS AND THE CONSTANT PUSH TO BETTER UNDERSTAND THEIR CUSTOMER BASE. Bloomingdale’s sends promotions in real-time based on location, offering incentives to join the program Members can access their account directly through Bloomingdale’s Big Brown Bag mobile app or the mobile site The Red Robin Royalty program consists of over 2.7 million members and is growing Red Robin rOYALTY pROGRAM Red Robin rOYALTY pROGRAM Bloomingdale’s loyallist Rewards program
  13. 13. KOBIE QUARTERLY REVIEW14 THE MILLENNIAL MINDSET By Matt Stein Millennials are a contradictory generation. They’re young, but they’re highly motivated. Their finances are limited, but they’re developing some of the most cut- ting edge technology, mobile applications and social platforms on the market today. They may buck tradi- tion when it comes to the workplace, but are fiercely passionate about causes that are making social impact and brands they feel a connection with. Oxymorons aside, this ‘army’ of 79 million young college students, workers, entrepreneurs, and consumers – all between the ages of 18 and 33 – make up America’s largest generation in history. Collectively, they spend $600 billion annually, and by the year 2020, are expected to account for 30% of all retail transactions in the United States. In short, Millennials represent a growing economic force for the restaurant and retail sectors. Their future spending power alone serves up a veritable goldmine for the brands that can understand the motivators be- hind this generation’s purchasing behaviors and cater to their evolving lifestyles and needs. What Matters Most to Millennials? While younger Millennials have not amassed much wealth yet (their median income at age 30 hovers around $42K), they have fully embraced the entrepre- neurial and startup culture. In fact, more than 14% of Millennials are already earning more than $2 million annually. But as the most distrustful generation in recent history, the industries courting Millennials need to quickly understand those brand loyalty triggers to secure their trust – and future spending – before their loyalties become aligned elsewhere. For the Millennial generation, brand loyalty (and their spending) amounts to a lot more than comparing restaurant menus or a store’s inventory. It’s about com- bining a brand’s products and offerings with a compel- ling mission they can identify with and trust. According to an academic analysis of their behavior and demo- graphics, Millennials want the abundance of choice and freedom of selection they have known since birth. With this abundance and freedom, comes a desire for flexibility in schedule and items and orders personal- ized to their individual preferences – and they want them all now. Millennials are collaborative, and they learn through hands-on and social interactions. Yet despite this collaboration, they recognize themselves as individuals, and they don’t feel the need to conform to mainstream ideals. So what do Millennial consumers look for in brands when aligning their loyalty? • Social Impact. As a philanthropic generation, Millennials want to know that their actions, and those of the companies they align with, effect meaningful change. • Innovation. Millennials are a product of technological advancement. They also champion disruptors. • Leadership. Millennials don’t just want to make an impact; they want to lead the charge. • Opportunity. Millennials are the most educated generation – they are driven, motivated and always looking for the next big thing. Technology Drives Loyalty Greatly influenced by the latest mobile, social and disruptive technologies, Millennials expect that all their interactions with brands and service providers, whether it’s in the physical or digital world be immediate, effi- cient, relevant and rewarding. A recent Forbes article about Millennials as customers sums this up well: “Customers expect you to be as good as the best of what they’ve encountered online and in self-service solutions.” While older generations might question or feel uncom- fortable with these tactics, Millennials have only ever known a technologically-connected world; one where instant gratification is only a tap, click or swipe away. Tapping into the Triggers that Lead to Long-term Loyalty
  14. 14. KOBIE QUARTERLY REVIEW 15 Here’s a brief timeline of how they grew up: • In 1989, the Internet, which just turned 25 (the age of the av- erage Millennial) become known to the masses. Just a decade later, while most Millennials were still in elementary school in 1998, Larry Page and Sergey Brin launched Google. • In 1999, the very first wireless handheld device known as the Blackberry came out, heralding the birth of the smartphone era. • In 2004, social networking site Facebook launches (orig- inally launched as “The Facebook”) by a 23 year-old Mark Zuckerberg. • In 2007, the first iPhone was released. Three years later, the first iPad hit store shelves. • In 2011, Spotify entered the American music scene, and for better or worse, “selfie” was officially added to the Oxford English Dictionary in 2013. With their short history firmly rooted in technology, it’s hardly surprising that Millennials are hyper connected, technologically savvy and constantly on the go.76% own a smartphone, 45% access coupons via email on mobile devices and 63% are more likely to buy some- thing if they receive a coupon on their mobile device while near a store. And while Millennials may not be readily handing out their loyalty, one thing they are giving away is data. Many Millennials freely share their personal information with companies having few, if any, invasion of privacy reservations. For loyalty marketers, this creates a perfect opportunity to build one of the most complete customer profiles for any segment, utilizing real-time data to tailor offerings to match Mil- lennials’ fast-paced and mobile-centric lifestyle. Social Dependency More importantly, as Millennials continue to offer data, marketers need to gather and analyze it. By using data gleaned from CRM and social channels to understand behaviors, restaurants and retailers can ensure they’re sending well executed and targeted campaigns to give these consumers what they’re actually asking for. By analyzing their data, loyalty marketers can evalu- ate their campaigns and gain real insight into what’s working with millennial engagement, what’s not - and what they can do next. Millennials want retailers and restaurants they frequent, and their employees, to be a real-life representation of the easy and effective virtual experience they have always grown up with. They de- mand control over their loyalty wallets and programs, they want to shop and eat without the interference of store associates and waiters, and they want retail and restaurant employees to know all of the same informa- tion about their shopping and dining preferences that logging into their online account would give them. It’s this kind of seamless experience that will drive Millennial loyalty far beyond the loyalty program itself – and companies who don’t create this experience could fail as a result. Take the popular fast food chain McDon- ald’s – which ranked number one amongst American consumers, but doesn’t even make the top ten list for Millennials’ favorite restaurant chains. Why is this? Un- like Subway, Wendy’s and Pizza Hut, all in the Millenni- als’ top five, McDonald’s hasn’t offered Millennials the opportunity to customize, or control their food order- ing. Furthermore, as Millennials subscribe to healthier, more sustainable food chains, they look for quality over quantity even with smaller average incomes. They want to know the food they’re consuming is grown sustain- ably, and that the brand they’re aligning with is not harming them – or the environment. This comes back to an emotional component of their generation: trust. The brand-consumer relationship is pivotal for Millen- nials, the socially-dependent generation, and they align brand loyalty beyond what they see in store. Sowing the Seeds by Roasting the Beans (for the Digital Natives) One rewards program that has successfully cap- tured the Millennial mindset (and their wallets) is My Starbucks Rewards, powered by what is currently the largest coffeehouse chain on the planet. Having survived the push for local business, this global cof- feehouse-cum-retailer continues to engage Millennials through various social media channels, mobile technol- ogy and sustainable efforts. By offering smartphone applications and mobile payment options, and reward- ing consumers for engaging with the brand through social media channels, My Starbucks Rewards isn’t only making life easier for its younger customers – it’s as if the program was designed specifically with the Millen- nial in mind. And that’s what keeps the coffee-loving generation coming back: the program is built around motivators that cater to the Millennial lifestyle including music downloads, mobile games and free beverages. The program’s tiered approach lets members earn “Stars” so they can move up to different levels.
  15. 15. KOBIE QUARTERLY REVIEW16 cards and consumers have the option to pay using a mobile wallet through the program’s smartphone appli- cation. Starbucks also updated its iPhone application (in March 2014) to incorporate tipping and a special “shake to pay” function that will help boost the store’s trend towards “next-generation” retail, digital and mobile pay- ments. In fact, recent studies reported that nearly 10 million con- sumers pay for their coffee drinks through the app, making more than 5 million mobile transactions per week. And since we know Millennials look for sustainable brands that value social impact, their mobile wallets also give them avenues to donate to help fund jobs in America through Starbucks’ Create Jobs for U.S.A. Program. To keep these young consumers loyal to the brand, Starbucks’ marketing team used an omnichannel ap- proach to ensure their brand and communications were accessible and everywhere their customers were. A simple to use and interactive rewards structure, com- bined with clear and concise messaging really grabbed the attention of Millennials. By combining an innovative mobile application with forward thinking and an oppor- tunity to contribute to the greater good in the world, My Starbucks Rewards appeals to Millennials by lever- aging advances in technology and encouraging social engagement and smart spending. What We’ve Learned about Millennials and Loyalty As contradictory as they are, what we do know about Millennials is this: • Millennials want control over their shopping and dining experience. • Millennials need to trust the brands they are loyal to. • Millennials thrive off social interaction and engagement, whether through personalized messaging, in store communi- cation or social media outlets. Millennials want to know their impact – and align with brands that identify with a greater purpose than increasing revenue. Between their spending habits and dining and shop- ping preferences, this generation – the largest and most culturally diverse since the Baby Boomers – is changing the way restaurants and retailers develop customer loyalty programs. By mining CRM and social data to identify preferences and trends, and utilizing predictive and behavioral analytics to understand what triggers brand love and loyalty among this set, these brands will create and seize opportunities to nurture long-lasting relationships as the generation matures and flourishes financially.
  16. 16. KOBIE QUARTERLY REVIEW 17 76% own a Smartphone
  17. 17. 18 TABLE TALK: INDUSTRY INSIGHTS ON INTEGRATING LOYALTY PROGRAMS I BY PAMELA SULLINS For restaurant operators and their marketing exec- utives, a well-designed and well-executed loyalty program does more than drive customer engagement and frequency of return visits – it forms an essential part of the company’s overall marketing strategy and can be a significant contributor to the company’s bottom line growth. Separate from other marketing initiatives, loyalty programs can also give restaurant operators direct insight into what guests think about their menu items, staff and overall quality of service before, during and after the dining experience. In other words, how their customers experience their brand. And from this collected data, executives can evaluate compa- ny performance against key performance indicators to determine how their loyalty program impacts the restaurant’s reputation and encourages customer referrals, repeat purchases and renewals. In today’s intensely competitive loyalty landscape, it’s critical for marketing departments to contribute to the profitability of any business – and demonstrate this contribution through measured and proven results. How? Through a customer loyalty program. While a well designed loyalty program is one facet of a comprehensive marketing plan, it should also be a central component. When it comes to profitability, many marketers forget that new customer acquisition is more expensive, and less lucrative, than customer retention. And as a result, they often silo their loyalty programs instead of integrating them into the overall marketing strategy. When it comes down to it, loyalty programs reflect what marketing campaigns aim to achieve: increased brand interactions, increased spend and more profitable customers. Ten Restaurant Loyalty Programs Tips: For restaurants, customer loy- alty programs are an effective way to turn new customers into regulars, increase the frequency of customer visits, gain more insight into the restaurant’s customer base, attract new members and increase revenue. By following these best practices and avoiding the bad ones, restaurant operators and their marketing executives can incorporate customer rewards programs into annual marketing cam- paigns that drive member engagement exponen- tially and boost customer loyalty year-round.
  18. 18. N HOW RESTAURANTS ARE INTO OVERALL MARKETING PLANS By: Pamela Sullins Send guests a relevant “come-back” promotion or offer. Today’s consumers are inundated with dozens of marketing messag- es daily, delivered through every channel. To keep your restaurant’s promotion or program call-to- action from adding to the digital chaos, marketers should strive for meaningful loyalty interactions and intelligent messaging that really resonates with consumers. Rel- evancy is key. You want them to come back because they received a genuine experience; so instead of sending guests irrelevant informa- tion or offers, use the knowledge gleaned from your CRM and trans- actional data sets to send messag- es that are timely and personalized and offer both a reason and a request. Use relevant marketing channels. Understanding the demographics of your patrons and the market- ing channels they prefer is crucial to knowing how you can reach and impact them effectively. To promote your restaurant pro- gram effectively, deliver messag- ing through those channels you know your guests prefer and that illustrate your knowledge of the individual. Don’t use marketing tactics that past data has proven won’t generate a response. Estab- lish a presence on all communica- tion channels that are relevant to your customer base – from direct mailings and personalized emails or geo-targeted alerts, to user-friend- ly, mobile optimized websites and applications – and keep your target audience in mind. Break down silos. Whether your goal is to increase traffic, promote new menu items or introduce new dine-in or out ser- vices, this information needs to be communicated through your loyal- ty program. Your loyalty program should be viewed as an extension of all other marketing initiatives (advertising, POP materials, etc.) and therefore used to reinforce a desired behavior. As your most loyal patrons make up your pro- gram, consider providing them with expanded or specialized content and rewards that reflect overall marketing campaigns, as this can deepen the engagement levels and accelerate goal achievement. Encourage “Word of Mouth” advertising. Just as restaurants know the value of Word of Mouth for good re- views and to drive traffic, so too can it drive loyalty participation – especially in the restaurant and retail sector, two industries that are social by nature. In fact, recent studies show that Word of Mouth is embraced by Millennials – who view it as a leading purchase influencer. For marketers, “social” influence needs to go beyond traditional social media channels and aim for ROI-driven marketing initiatives with measurable sales impact. With the development of Big Data, researchers can use data-driven Word of Mouth to evaluate pur- chase influence, and as a result, use their findings to boost the ROI of any company marketing campaign. Using the power of Word of Mouth advertising, good loyalty programs will be shared organically. Segment members to identify and give special treatment to your high-value members. Make sure you distinguish be- tween high-value and infrequent customers, and distribute rewards by segmenting them into good, better and best customers. While 63% of company marketers focus their attention on new customer acquisition, smart companies know that 20% of shoppers constitute their loyal customer base – and it’s this same 20% that drives 80% of restaurant and retail revenue. Consider this: loyal customers spend ten times more than new customers, they are 60-70% more likely to purchase additional items at the point of sale, and they are 70% more likely to advertise your company. Every customer likes to receive the VIP treatment – it’s important to send them special promotions and rewards oppor- tunities to offer an impression of exclusivity. KOBIE QUARTERLY REVIEW 19
  19. 19. KOBIE QUARTERLY REVIEW20 Test messaging strategies to see what works. The old adage, “What’s good for the goose is good for the gander” can be especially true when it comes to loyalty. As your loyalty program’s membership is made up of a cross-sec- tion of your patrons, utilize your mem- bership base to test (and retest) market- ing messaging, campaigns and even promo- tions to your various cus- tomer segments. This controlled environment can provide action- able insights that can be received in real-time and then disseminated to a wider audience later. Empower your employees. For restaurant owners, employees are the front lines of all business operations and the face of the brand to your customer base. Within this role, employees often directly influence a customer’s dining experience and can signifi- cantly impact whether or not they will return to your restaurant. For those reasons, it is critical to ensure that all staff members (servers, hostesses, bartenders, etc.) are fully trained on all aspects of your restaurant loyalty program so they are adequately prepared to engage potential new members. Make it as fun and easy as possible. Give store clerks a script they can read that contains the program’s standard messaging, explains the value to the customer and extends an invitation for them to enroll. Train employees on how to use the loy- alty program software to register customers and process rewards. Finally, come up with creative ways to encourage employees to pro- mote your rewards program – like contests and prizes – just as you would to encourage your custom- ers to join. Promote your loyalty program. Promoting restaurant loyalty programs is not about facilitating outreach to the general public; it’s about getting to the right customer in a way that will really resonate. Today’s business culture is driven by innovative technology, op- posing customer opinions, and a never-ending search for “the next new thing.” In this environment, restaurants can ensure they reach targeted customers by marketing through omnichannel and engaging consumers through channel-opti- mized loyalty program marketing campaigns that are “right timed” to deliver messages at every touch point relevant to customers on their own level. Unlike traditional rewards programs, omnichannel loyalty gives marketers a way to reach consumers with the right message at the right time, in a way that is organic, intuitive, individ- ualized, engaging and fun, and represents the brand appropriately. Engage with customers, especially after their dining experience. Consumer feedback is crucial to restaurant success – and those who listen to this feedback and make changes accordingly stand out from the rest. Customer reviews allow you to analyze your current business practices and evaluate what might be negatively affecting your success. If there is negative feedback, consider the following questions: What is the root cause of the problem? Is it a communi- cation issue? How can we correct it? How will this affect the overall customer experience? Customers are the backbone of any operation. By using their concerns to improve the dining experience, you are not only securing their return, but you are creating opportunities for these diners to use positive Word of Mouth to engage additional consum- ers and boost your restaurant’s ROI. Keep the data flowing. Today’s technology has businesses in every sector analyzing data to change the way they operate. Just as these businesses use loyalty data to influence marketing deci- sions, they use other forms of data, too – from transactional to social intelligence – to ensure operational success. For example, through data collection and analysis, restaurants can identify critical facts and fig- ures about what diners prefer, what they’re purchasing - or not, which rewards they like and those they’re not taking advantage of on a daily basis – all in real time. Factor in so- cial media, and these same restau- rants can use comments, “likes” and retweets to gauge customer opinions, better understand diner trends, and leverage data to put their loyalty marketing dollars to work where it actually counts. Success Story: Take the Italian favorite Maggiano’s Little Italy, for example. Known for their large portions of authentic Italian dinners, they tested a smaller menu, with more controlled portions, in select restaurant locations to try and attract a larger lunch crowd. Upon realizing its success, the smaller menu was adopted by all locations nationwide. Success Story: The popular chain Saladworks created the website www.SaladworksListens.com to gain customer feedback in real time, and had a staff on hand to respond to that feedback im- mediately – including feedback received after hours and on weekends. Success Story: The Colora- do-based chain, Larkburger, pro- moted its new loyalty program by creating a contest that asked customers to suggest the name of the program. The result was increased customer engagement and a $50 Larkburger gift certifi- cate for the winner.
  20. 20. KOBIE QUARTERLY REVIEW 21 THE TRUTH ABOUT LOYALTY PROGRAMS AND MOBILE APPS By Michael Hemsey How retailers and restaurants can use mobile technology and social media to increase member engagement Over the past decade, a number of major factors have significantly disrupted the retail and restaurant industries, including the evolu- tion of eCommerce, the rise of social media and the emergence of Millennials as a customer base. None of these, however, have been as disruptive as the mobile device – and the broader mobile channel itself. According to MIT, 80% of store shoppers check prices online, and the web influences $1.1 tril- lion in store sales. A 2013 study also found that 81% of consumers have searched for a restaurant on a mobile app, and 75% said they often choose a restaurant based on those search results. These chang- es in consumer behaviors have forced traditional brick-and-mortar businesses to adapt to the new mobile world or get left behind. Retailers and restaurants have responded to the challenge with omnichannel strategies that create a seamless experience between brick-and-mortar and mobile, and the results are clear — according to one study, companies with the strongest omnichannel customer engagement strategies retain 89% of their customers, compared with 33% for companies with weak om- nichannel strategies. Mobile devices are not just gad- gets. They have become the center of users’ daily lives and how they engage with the world. If brands want to engage customers, they have to go through a mobile device first. The mobile channel, therefore, must become central to brands’ lives, too. The Consumer’s Center of Universe: The Smartphone With mobile retail payments expected to reach $707 billion by 2018 and restaurants already the most searched industry on mobile apps and browsers, smartphones have become the center of the ‘new consumer experience,’ and brands have to unify their strate- gies and tactics around this center if they want to remain part of con- sumers’ lives. Advances in mobile technology have paved the way for restaurant and retail loyalty programs to em- ploy strategies that move “beyond the discount.” By delivering timely messaging and offers that focus on increasing member engagement and are relevant in real-time and in-location, marketers can ensure a consistent brand experience that nevertheless personalizes engage- ment for each channel and each program member. Retailers and restaurants have be- gun to recognize this omnichannel approach as more than just a trend or buzzword – it’s the new normal. Omnichannel marketing opens up more sophisticated ways for brands to create program awareness, im- prove the shopping/dining experi- ence, and ultimately, drive loyalty and customer retention.
  21. 21. KOBIE QUARTERLY REVIEW22 Mobile Tech Trends Make Loyalty Marketing Easy and Entertaining Geo-location features like GPS al- low retailers and restaurants to tar- get customers where they are and create real-time and relevant offers and messaging that keep brand awareness alive, attract brick- and-mortar traffic and incentivize ongoing spending. This fits into the omnichannel goal of managing the entire customer experience before, during and after shopping or dining. In line with this goal, Taco Bell and McDonald’s are also introduc- ing mobile ordering, a trend that reflects the growing importance of omnichannel marketing in the restaurant industry. As Taco Bell’s mobile lead put it, “Mobile is the biggest shift in QSR since the drive thru. If you can get 10 million peo- ple to download your app, you’re putting a portal to Taco Bell in 10 million pockets.” Marketing aside, mobile devices as a whole are also changing in-store interactions for retailers and restau- rants industry wide. New POS and mobile payment systems, for example, are helping streamline the payment process by allowing diners to pay with their mobile device, therefore making service more efficient for staff and adding value to the transaction. Many retailers and restaurants are also implementing tablet strategies and equipping locations with these devices to help customers browse, order, customize, pay – or even play games to keep them engaged with the brand. Pizza Hut, for example, recently announced plans to implement its own digital signage tabletop where diners can customize their orders – from the size, toppings and crust of their pizza, to side dishes, wings, pastas and desserts – and even play games while they wait. This kind of in-store technology helps create a brand experience that simultaneously improves retail and restaurant operations – like staff efficiency, reduced wait times and increased spending. According to Ziosk, tablet menus increase tips by 15% on average, and at Chili’s, they increased dessert sales by about 20%. Some restaurants have taken gam- ification to the next level with mo- bile apps that create brand aware- ness and let customers play games to win free products and impact the local community. The sandwich chain Blimpie’s, for example, de- veloped “Blimpie’s Run,” a mobile game that randomly selects participants to win free subs for an entire year. Chipotle, on the other hand, uses mobile apps to get customers on board with their company philosophy. Its “Scarecrow Game” teaches consumers of all ages about the importance of pro-sustainable farming efforts, a standard oper- ating procedure for the healthy Mexican food chain. Ultimately, the goal of omnichannel and mobile marketing is to help drive lasting customer loyalty, and for retailers and restaurants in par- ticular, mobile devices have to be loyalty drivers. JiWire’s recent Mo- bile Audience Insights Report has some interesting stats on diners: 39% of consumers use mobile apps over other methods to find infor- mation on QSR and casual dining establishments. Restaurant review apps are second only to Word of Mouth advertising for determining where to eat. 83% of consumers rely on their mobile device for dining decisions while traveling, compared to 65% while in their home market. Loyalty programs have to adapt to the new environment where mobile devices drive consumer decisions in real time. Mobile loyalty apps should, at the very least, make it easy for program members to manage their account, earn points and redeem rewards with a swipe of their touchscreens. Pouch, an ex- perimental new loyalty app, is try- ing to consolidate cards, vouchers, content and other loyalty features into one convenient platform, while also using Bluetooth beacons to target mobile users when they are near a retail or restaurant location. Once they have a solid manage- ment platform in place, retailers and restaurants can focus on creative and effective tactics to drive loyalty among mobile us- ers. Fashion retailer GUESS rolled out a new mobile app earlier this year, providing points earning opportunities, personal customer service, fashion updates, photos and videos of merchandise and the ability to cross-sell and up-sell. That is the omnichannel range of mobile devices, consolidating the entire brand experience into one platform, creating new opportuni- ties for spending and engagement, and ultimately, tying everything into customer loyalty programs to 39% of consumers use mobile to find dining information
  22. 22. KOBIE QUARTERLY REVIEW 23 MOBILEIS PAVING THE WAY for OMNICHANNEL EXPERIENCES An Interview with Don Hughes THE FINANCIAL SERVICES LOYALTY PROGRAM LANDSCAPE: Where Are We Today? create lasting value for both brands and consumers. The Wrap: Six Reasons Why Brands Can Benefit from Applying a Mobile Mindset to Their Loyalty Programs Given advancements in mobile technology, research shows there are six ways that companies can benefit from integrating their loyalty pro- grams with a mobile platform. Mobile Loyalty Programs: 1. Drive activity and increase ROI. Smartphones drive the way consum- ers interact with brands today. Mobile loyalty programs give customers another reason to stop by (physically or digitally) and make a purchase. 2. Are easy to administer. Instead of printing out punch cards or replacing lost loyalty rewards cards, mobile programs need only a smartphone (which most consumers always have with them) and most can be changed, as needed, from the app dashboard. In short, they are clean, elegant and cost-effective for restaurants and retailers to manage. 3. Reduce churn and im- prove loyalty. Having a mo- bile platform that consumers can easily access is another incentive for them to choose one program over another. 4. Are a solution to loyalty program fatigue. Consumers like carrying loyalty cards less and less. Mobile loyalty programs make it really easy for consumers with a tap, click or swipe. 5. Improve customer satisfaction. Mobile loyalty programs provide a way for brands to remain connected with their members at all times and offer a vehicle for instant feedback and dialogue, just like social media. 6. Track customer activity. Mobile loyalty programs provide data that allows retailers and restaurants to see what rewards are motivating, how fast members redeem and what items they frequently purchase. This data is key to knowing what to offer customers and how programs can be improved incrementally and continually. More than any other industry, the retail and restaurant industries – which are both very social by nature – have tremendous oppor- tunities to capitalize on custom- er loyalty through the mobile channel and the most intimate marketing tool, the mobile device. Leaving traditional marketing tactics behind, mobile technology has paved the way for a loyalty marketing landscape that centers on the omnichannel experience and garners success by reaching consumers wherever they are.
  23. 23. KOBIE QUARTERLY REVIEW24 1 Mobile apps drive activity and ROI 2 They’re easy to administer 3 Mobile programs reduce churn 4 They solve program fatigue 6They improve customer satisfaction5 Mobile programs track activity 6 Ways that brands can benefit from mobile GEO-LOCAtiONfeatures allow retailers and restaurants to target customers on the spot and attract brick-and-mortar traffic Gamification Tactics Are being used to drive engagement and create brand awareness among members Mobile is changing in-store interactions with new POS mobile payment systems, making services more efficient Advances in mobile tech have paved the way for industries to employ strategies Beyond the Discount Mobile technology has paved the way for a loyalty marketing landscape that centers on the omnichannel experience and reaches customers wherever they are increase member engagEment through mobile technology 80% use mobileuse mobileuse mobileuse mobile apps to find info on QSR & other diners apps to find info on QSR & other diners apps to find info on QSR & other diners apps to find info on QSR & other diners 39%39%39%39% of store shoppers check prices online 81% have looked for a restaurant on an app
  24. 24. KOBIE QUARTERLY REVIEW 25 Michael Hemsey, President As President of Kobie Marketing, Michael is responsible for leading all facets of the loyalty marketing organiza- tion including business development, IT initiatives, client services, as well as the overall direction of the Kobie brand. For 20 years, Michael has cultivated a rich background in client services, product development, market- ing, technology and operations through several key posts. Prior to Kobie Marketing, Michael was Executive Vice President of TSYS Loyalty (formerly ESC Loyalty) and led the loyalty marketing implementation and relation- ship management teams serving the world’s largest issuers and retailers. Bram Hechtkopf, Vice President of Business Development and Marketing Bram leads the “marketing of Kobie Marketing”. He consults with current and prospective clients on new busi- ness opportunities, helping to develop customer retention and loyalty marketing strategies and solutions that drive increased retention and spend. Following in the footsteps of his father, Kobie’s founder, Bram is eager to continue Kobie’s vision of technology and data analytics as enablers of leading-edge marketing executions for world-class customer loyalty initiatives. Bram has consulted with a wide array of leading brands including AMC Entertainment, TGI Friday’s, BJ’s Restaurants, Verizon, Bank of America, RBC, Flagstar Bank, JPMC, Sagicor, Coca Cola, Cox Enterprises, Ruby Tuesday, Hawaiian Airlines, and Royal Caribbean Cruise Lines. Nancy Berg, VP of Client Services and Partnerships Nancy is responsible for leading Kobie’s Client Services team and Partnership Marketing practice, where she is responsible for all aspects of Account Management and building strategic and tactical marketing partnerships that differentiate Kobie’s client programs. Nancy takes great pride in delivering against Kobie’s mantra that we will never sacrifice an existing client for a new business opportunity, and that we will do what we say we will do each and every day. She is a strong and trusted leader, that has nearly 20 years’ experience in Customer Loyal- ty Marketing working in several industry verticals with top brands including Verizon, RBC Bank, AMC Theatres, Hawaiian Airlines, Bank of America, Northwest Airlines, US Bank, Westin Hotels and others. Matt Stein, Creative Director Matt serves as the head of Kobie’s Creative & Marketing Services capabilities. With over 13 years of experience in senior creative leadership roles, he drives industry-leading loyalty engagement solutions that span the online, mobile, social, print and broadcast media channels as well as the full customer journey from digital channels to physical locations. Pamela Sullins, Senior Director of Client Services Pamela Sullins has more than twenty years’ experience as a senior sales and marketing executive with a suc- cessful career of consultative sales, product/service marketing, channel marketing and client relationship man- agement for technology and healthcare organizations. Ignited by her training in coalition building at Harvard, Pamela has volunteered and worked to promote social enterprise and social marketing for community-based non-profit organizations. She is an alumna of the Center for Creative Leadership and brings proven leadership, business acumen and innovative solutions to all of her endeavors. Mary Falleson, Account Director Mary’s background includes building brand value in the consumer, healthcare, retail, entertainment, and finance sectors through insight-based solutions that engage customers in unique and relevant ways. Her method to achieving big picture success for her clients is by inspiring loyalty and holistic engagement and making every single program work, where it counts, at the point-of-purchase. ABOUT THE AUTHORS
  25. 25. Kobie Marketing is a diverse team of loyalty enthusiasts who are passionate and dedicated to the day-to-day management and long-term success of your loyalty program. We deliver quantifiable ROI and real customer experience to increase customer retention. Kobie Marketing is a global leader in loyalty marketing and an industry pioneer, delivering end-to-end strategy, technology and program management solutions. Kobie drives results and ROI through Kobie Alchemy®, a best-in-class loyalty marketing technology platform. Find out more at info@kobie.com WE ARE KOBIE

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