How Brands Can Build Real Relationships in the Digital Future

THE
FOUR FUTURES
THE DIGITAL LOYALTY SURVEY
Martin Hayward,
Vice President,
Global Digital Strategy

02 / The Digital Loyalty Survey
© 2013 Aimia Inc. All Rights Reserved.
emotional
engagement
real
relationships
high data
control
At Aimia, we believe that businesses who emotionally connect with their
customers whilst also offering a high level of responsible data control,
will be best positioned to inspire long term customer loyalty.

The Digital Loyalty Survey / 1
SUMMARY
The marketing world is on the
cusp of a revolution — one that
will create entirely new business
models, technologies, and
channels that will find brands
interacting with their customers
with new levels of relevance and
immediacy. The advent of big data
promises ever more insight into
consumer behaviours, attitudes,
and aspirations. Couple this data
explosion with a rapidly expanding
array of communications channels,
and we may herald the arrival of
a new golden age of marketing.
Or, if marketers chase short-term
monetization of data and exploit
these new channels regardless of
consumer preference and control,
then we might find ourselves in a
marketing dystopia. But how can we
know that we’re on the right path?
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.
To collect our data, in the summer
of 2012 we conducted a consumer
survey in Canada, the United
Kingdom, and the United States,
using SSI nationally representative
online panels. In total, we received
slightly over 6,000 responses —
approximately 2,000 respondents
in each country.
This report reveals a subset of those
survey responses. In each country, we
found a consumer population eager
to engage online, actively seeking
real relationships with their favourite
brands, but wary of over-saturation
and frustrated by the lack of value
and relevance in most marketing
communications. Some of our
specific findings include:
>> Consumers are increasingly
connected online through
multiple devices.
>> While they’re willing to
engage with brands online,
the marketing messages they
currently receive often fail to
meet their expectations.
>> Although consumers are concerned
about the increasing frequency and
volume of digital communications,
they do accept some responsibility
for the increasing frequency and
volume of digital communications
they receive.
>> Whilst consumers indicate a
strong preference for email
messages over other digital
channels, they delete a third
of emails unopened.
>> While consumers express a
strong desire to be rewarded for
sharing data with marketers, they
generally do not feel so rewarded.
>> Relevance will be the crucial
point of differentiation for future
digital relationships. Consumers
define relevance in part by how
well marketers tailor the offer,
frequency, and channel for
individual consumers.
>> Only organizations that
prove themselves trusted
and responsible managers
of consumers’ data will be
rewarded with their loyalty.
Unfortunately, trust is low for
many of the new stars of the
digital world.
Most importantly, our survey
finds 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.
Aimia has identified four possible
“futures” for digital marketing
based on these variables. While
all four futures are possible —
and indeed already exist — only
one offers a path to long-term
profitability: the future of Real
Relationships. It’s our hope that
this survey provides a few useful
signposts to guide you along
the way.
1 Summary
2 Introduction: A Fork in the Road
4 The Four Futures
6 Future I: Offer Anarchy
8 Future II: Pay to Play
10 Future III: The Hunt for Affinity
12 Future IV: Real Relationships
14 Conclusion: The Loyalty Advantage
16 Survey Questions
17 About the Author
Contents

INTRODUCTION: A FORK IN THE ROAD
As recently as a few years ago,
we could only understand so
much about our customers.
We possessed limited ability
to get messages to them at the
right time and place. But the
arrival of ever more data about
customer behaviour, attitudes
and aspirations, combined
with a rapidly expanding array
of communication channels
through which to reach them,
now allows us to provide our
customers with marketing
relevance about which we could
previously only dream. But as
with every era of technological
development, the danger is that
marketers focus on the possible
at the expense of the desirable.
And so we find ourselves at
a fork in the road — one path
leading to a possible golden
age of marketing, and the other
leading to consumer backlash,
government intervention, or
both. Will we take the road
less travelled?
The challenge as ever is to temper
our enthusiasm with a thorough
understanding of what’s best for
our customers. Fortunately, some of
the early signs are good. Marketers
have already begun to migrate from
a shotgun approach, hoping to
hit the right targets by peppering
consumers with messages, to a rifle
approach, in which messages are
targeted to consumers based on
real understanding of their needs.
Indeed, our research demonstrates
that a majority of consumers are
happy to share their data with
marketers, and are pleased with
the possibilities of better targeted
digital messaging. As our illustration
on the opposite page reveals,
consumers are connecting through
multiple devices. They’re embracing
mobile channels. They’re connecting
with brands online through both
brand-specific and social platforms.
And they’re connecting with the
expectation that marketers will
reward them for seeking out
these relationships.
If marketers choose the correct
path, we’ll earn the right to better
understand our customers by
connecting the dots between data
sources drawn from throughout
the customer lifecycle. We’ll
fully leverage the exciting new
capabilities of mobile and social
channels. We’ll use customer data
to build relationships, engagement,
and enduring loyalty.
But our key challenge is to embrace
this digital revolution with both
hands while showing enough
restraint to avoid killing this new
goose that lays the golden eggs.
Why the danger? In an always-on
digital future, marketers will soon
have the ability to send messages
to consumers at any time, wherever
they are — at home, on the move,
before entering a store, in the store
aisles, after leaving the store, and so
on. They’ll also be able to peer into a
customer’s social circle and use that
knowledge to influence her purchase
behaviour. It’s already happening.
But no matter how relevant our
marketing messages, there are
clearly times, places and occasions
in which consumers prefer not
to receive them. We assume that
consumers are both willing and
able to receive an endless stream
of targeted messages wherever
and whenever they may be, and
marketers are already pricing in
these new revenue streams. But
evidence is mounting that the
assumptions underlying these
business cases are both naïve and
potentially dangerous. Research
firms such as Forrester and Gartner
have suggested that if we add up
the revenues that these new digital
advertising models are promising
the markets, they exceed the
current total advertising spend
by multiple factors.
These assumptions may in fact
lead us down the wrong path
— one in which consumers rebel
against the always-on future, in
which government regulators place
constraints on when and how we
can use personal data for marketing
purposes. Choosing the right path
through a period of such rapid
change requires constant vigilance
to ensure that our marketing efforts
are designed to build long-term,
profitable relationships.
To help you navigate this fork in
the road, we’ve filtered the results
of our Digital Loyalty Survey,
conducted in Canada, the United
Kingdom, and the United States,
to help illustrate four potential
future outcomes of this marketing
revolution, and to provide you with
some rules for navigating your
business into the future of real
relationships. For only one of these
four futures will allow us to seize
the tremendous opportunities
that lie ahead.
Choosing the right
path through a period
of such rapid change
requires constant vigilance
to ensure that our marketing
efforts are designed
to build long-term,
profitable relationships.

HOW WE CONNECT
Long gone are the days of landline busy signals awaiting any callers who ring us while we dial onto the web
via fixed landline and desktop computer modems. Today’s consumers spend increasingly more time online,
connecting through multiple devices both at home and on the go. Whether through desktop, laptop, phone
or tablet, connecting with consumers has never been easier — but there are profound implications for how
marketers choose to leverage these always-on channels.
Nearly half of consumers connect through
three or more devices.
Mobile connections peak amongst 25-34 year-olds.
Smartphone Tablet
≥ 3 Devices
45% 48% 43%
25–34 25–3445–54 45–54
66% 27%39% 14%
Consumers are most likely to connect with brands
through email...
…although UK consumers are more likely to text.
97% 83% 27%72%
64% 54%56% 44%
Consumers are willing to connect with brands online, and some are creating multiple identities online.
Q. Number of brands liked/followed: Q. Number of online accounts created:
>10 6–10 1–5 0 >10 6–10 1–5 0
Women tend to dominate online brand conversations.
Q. Percent who have liked/followed one or more brands:
67% 48%
11%
10%12%
16% 14%
17% 22%
21%
20%23%
31%
28%
30%
36%
42%
40%
42%
40%
49%
19% 17%
18%
18%
25%
70% 87% 66%
Nearly half of all consumers connect online with the expectation of a reward.
Q. Reasons for connecting with a brand online:
Future offer
Specific offer/promotion
To enter a competition

THE FOUR FUTURES
Despite the promise of digital
technology to bring brands and
their customers closer together, a
gulf is in fact widening between
them. On one side of the gulf
stand marketers, preoccupied
with what they want customers
to do; on the other side stand
customers, concerned only with
what marketers can do for them.
Bridging this gap is the unique
challenge of the digital age.
Whether and how we bridge this
gap successfully depends on
our management of two primary
variables — and the good news is
these variables are largely within
our control.
Consumers are increasingly
demanding and more aware than
ever of their rapidly expanding data
footprint. Nevertheless, they’re
generally happy to share their
details widely in exchange for more
relevant and generous marketing
and offers. Marketers, meanwhile,
are excited by the potential to
track and communicate with their
customers rapidly by incorporating
new digital channels, platforms,
and data sources. We’re eager to
leverage this ability to reward loyalty
through new digital channels, to
encourage behaviour shift, and to
send offers whenever and wherever
our customers are.
When the interests of marketers and
customers align, the future looks
bright indeed. But how well these
interests align will depend on how
well we manage data along two
primary axes:
>> Control indicates the degree to
which consumers feel they own
their data — including the right to
grant permission for its use, and
to set their own preferences for
marketing purposes. While control
can be mandated by regulators or
seized by third-party data brokers,
its degree is ideally determined
through the transparency
and added value of your
marketing efforts.
>> Engagement reflects the
degree to which marketers use
customer data to create enduring
relationships rather than for short-
term promotions. To influence
engagement, marketers must use
data to build relationships on a
foundation of trust, commitment,
and reciprocity.
The illustration on the opposite page
shows these two variables plotted
as simple x- and y-axes to form
a traditional four-quadrant grid.
Each of these quadrants represents
a different potential future for
marketers based on the resulting
degree of control and engagement.
We can summarize these “four
futures” thus:
>> Offer Anarchy: In this future, the
increasing volume of customer
data created by the digitisation
of everyday life remains freely
available, and only loosely
controlled by governments
or consumers. Consequently,
‘always on’ digital channels and
platforms are over-exploited by
marketers. This scenario leads to
highly transactional, deal-based
marketing and frustrated,
over-messaged consumers.
>> Pay to Play: In this future, both
consumers and regulators
acknowledge the value and power
of customer data. Consequently,
data is controlled and traded
as a commodity. To gain access
to data, marketers will have to
pay: either in cash to third-party
data brokers, or in rewards to
customers themselves. Consumers
will increasingly offer their data,
attention and spending to the
highest bidder — a future which
will lay waste to many legacy
business models.
>> The Hunt for Affinity: In this
future, marketers are attempting
to use data to build engagement,
but consumers still feel little
control over their data. The result
is a series of broken relationships
as consumers seek the ability
to regulate when and how
they receive marketing offers.
Brand-consumer relationships are
intense, but short-lived. As a result,
marketing expense and reward
costs continue to increase.
>> Real Relationships: This final,
possible future is the one that
marketers should strive to build.
In this scenario, we use data
to build sustainable, profitable
relationships with customers
based on trust, commitment,
and reciprocity. The needs of
brands and customers are aligned,
with marketers delivering value
and relevance, and customers
delivering increased spend,
tenure, and advocacy.
The science fiction author Willliam
Gibson famously said, “The future
is already here — it’s just not very
evenly distributed.” And indeed,
we can see that the four futures
described above are already part of
the consumer landscape to varying
degrees. In the following pages,
we’ll take a closer look at how our
Digital Loyalty Survey respondents
view these four potential futures.
And in our conclusion, we’ll provide
some guidelines for making the best
possible future — the future of real
relationships — a reality for all of us.

ENGAGEMENT AND CONTROL
When the interests of marketers and customers align, the future looks bright indeed. But how well these
interests align will depend on how well we manage data along the two primary variables of data control and
customer engagement. Plotting these variables along simple x- and y-axes forms quadrants, each of which
represents a different potential future for marketers.
PAY TO
PLAY
REAL
RELATIONSHIPS
OFFER
ANARCHY
Rational
Engagement
Emotional
Engagement
Low Data
Control
High Data
Control
THE HUNT
FOR AFFINITY

FUTURE I: OFFER ANARCHY
In the 2002 film Minority
Report, a science-fiction film
set in the near future, on-the-
run protagonist John Anderton,
played by Tom Cruise, races
through a retail mall deluged
by a torrent of audio and visual
location-based marketing
messages. The messages implore
him by name, helpfully suggest
products based on his purchase
history, and bombard him
with discount offers. Because
Anderton is fleeing from the
authorities, he is understandably
distressed by having his name
broadcast all over the mall by
digital display advertisements.
And by his look of surprise and
annoyance, we may assume
that he didn’t opt in to this
communication stream.
For a film released five years
before Apple debuted the first
iPhone and two years before
Mark Zuckerburg created
Facebook in his Harvard dorm
room, Minority Report now
appears wildly prescient in
its depiction of data-driven,
hyper-personalized, location-
based marketing. And although
the film is fictional, this brief scene
successfully sums up the fear
and confusion felt by consumers
towards “always on” marketing
messages. Welcome to the
Offer Anarchy future, in which
consumers have no say in whether
or how their personal information
and buying habits are used for
marketing purposes.
As our “Four Futures” illustration
on page 5 depicts, the Offer
Anarchy future is one in which
consumers have no control over
how their data is used, and in
which marketers make little
effort to use that data to build
lasting customer relationships.
In this future, customers are
oversaturated with messages,
frustrated by the irrelevancy of
most digital offers, and ultimately
forced to tune out all but a small
percentage of the marketing noise.
In the meantime, marketers receive
little return on their investment
beyond short-term gains driven by
deep discounts and opportunistic
promotions. Offer Anarchy is our
most dystopian vision of the future
— a future in which neither brands
nor consumers win.
As our illustration on page 7
shows, Aimia’s Digital Loyalty
Survey reveals that, for at least
some of our customers, the Offer
Anarchy future is already here.
Some of the symptoms of Offer
Anarchy include:
>> Irrelevance breeds regret. Driven
by negative media stories about
intrusive data collection, as well
as by their own personal
experiences with irrelevant
marketing messages, significant
numbers of consumers in the
three markets we surveyed
express regret at connecting with
brands online. Approximately one
in five consumers have regretted
liking or following a brand via
social media, while one in four
have regretted connecting with
a brand via their web site.
>> There’s too much noise. When
it comes to email marketing
messages, the numbers in our
survey are startling: While
86 percent of consumers receive
marketing emails, only 12 percent
look forward to receiving them,
and nearly half think they receive
too many. The numbers are
similarly grim for text messages.
When most of the messages
we deliver to our customers are
perceived as noise, then Offer
Anarchy is already here.
>> Email amplifies the noise. Given
the literally dozens of marketing
emails our customers receive, it’s
no surprise that these messages
quickly reach a saturation point.
Our survey reveals that tipping
point at 20 emails per week
— the number of emails that a
majority of consumers believe
to be “too many.” One caveat:
Our survey also shows that their
actions directly contribute to the
noise, with nearly two-thirds of
consumers admitting that their
actions affect the number of
marketing messages they receive.
>> Irrelevance also drives
disengagement. It’s no surprise
that consumers perceive most
email messages — even ones
they’ve volunteered to receive
— as irrelevant. Our survey
shows that one-third of email
marketing messages go unread,
and that only one in five result in a
consumer taking action. This poor
ratio of action to inaction speaks
to marketers’ continued inability to
deliver offers of obvious relevance
and value.
>> When it comes to effectively
leveraging new communications
channels, marketers have a poor
track record: Direct mail became
junk mail; email became spam;
we can only guess the pejoratives
soon to be assigned to social and
mobile messages. Our survey
reveals that successful avoidance
of the Offer Anarchy future will
require marketers to change
their behaviour along both the
engagement and control axes:
we must collect data for the
express purpose of building
relationships, and we must cede
to our customers control over
how we use that data. Only by
changing our own behaviour as
marketers can we hope to avoid
this most dystopian future.
Welcome to the
Offer Anarchy future,
in which consumers
have no say in whether
or how their personal
information and buying
habits are used for
marketing purposes.

ALWAYS-ON MARKETING
Thanks to such emerging digital platforms as browser-based behavioural targeting, mobile devices,
location-based targeting, and social media, marketers can now reach consumers anywhere, and at any time.
But just as with many advances in science, our ability to do something often outpaces our understanding of
whether we should do it. Our survey shows that marketing fatigue is a real phenomenon amongst consumers
— and if we don’t address this concern, we may find ourselves in the Offer Anarchy future.
Consumers are unenthusiastic about the digital communications
they receive.
One in five consumers express regret for liking a brand online, while up to one in four regret registering with a
company or brand website.
22% 18% 20% 24% 22% 26%
86%
Receive marketing emails
Emails:
Q. Regretted liking a brand: Q. Regretted signing up online:
A majority of consumers
consider receiving 20 or more
emails a week as “too many.”
50%
53%
58%
Consumers delete more than one third of emails and texts from brands without reading more than the title.
Q. Action taken when receiving messages from companies:
15%
17%
17%
18%
18%
19%20%22%
22%
22%
22%
22%
22%
22%
23% 33%
35%
36%
Read and
take action
Read —
no action taken
Glance at
contents
Read
title only
Delete without
reading
Percent
unopened
12%
Look forward to
receiving them
but only
ANd
46%
Think they receive
too many
Texts:
28%
Receive marketing texts
10%
Look forward to
receiving them
but only
ANd
44%
Think they receive
too many

FUTURE II: PAY TO PLAY
A future marked by offer anarchy
is the worst possible future for
both marketers and consumers.
But even if we avoid that grim
fate, there is another form of
dystopia possible — one with
especially gloomy implications
for marketers. It’s a future in
which marketers’ unwillingness
or inability to leverage data to
build real relationships has
forced the issue of data control
out of their hands. In this
scenario, new mechanisms,
either mandated by government
regulators or developed by
entrepreneurs, have arisen to act
as gatekeepers to control access
to data. Consumers themselves
become mercenaries, selling
their data to the highest bidder.
If this future seems far-fetched,
then consider that, much like the
Offer Anarchy future, evidence that
we’re heading down this troubling
path already abounds. And our
Digital Loyalty Survey indicates
that consumers are already well
considering the importance of
data control, and the value of their
personal information to marketers.
Warning signs of the Pay to Play
future include:
>> Data aggregator backlash: The
past decade has seen the rise
of monolithic data aggregators
who sell consumers’ financial,
purchase, lifestyle, and household
data to marketers, mostly without
their knowledge or permission.
Their activities have drawn media
attention, with the resulting
investigative reports pointing
out the lack of consumer access
to or control over this information.
Popular revolt against such
practices could force reforms
that would increase the price
of this data to marketers.
>> Legislative scrutiny: The media
spotlight on Big Data has in
turn drawn the scrutiny of
legislators around the globe,
who are now demanding to
know what data these companies
are collecting and how they’re
monetizing it. Government entities
such as the US Federal Trade
Commission and the European
Commission, as well as initiatives
such as Midata in the United
Kingdom and a review of the
Personal Information Protection
and Electronic Documents Act
(PIPEDA) in Canada, all speak to a
potential regulatory environment
that restricts data access and
raises costs for marketers.
>> New business models: Although
yet to gain traction, start-up
companies in North America and
Europe are even now positioning
themselves as secure data
storage lockers or personal data
gatekeepers. The purpose of these
entities is to function as a control
mechanism to help consumers
choose who sees their personal
information and what they can
do with it. Should any of these
start-ups build critical mass with
consumers, marketers may find
access to consumer data more
restricted — and more expensive.
Our Digital Loyalty Survey
results, a portion of which is
summarized in the illustration on
page 9, also reveals the extent to
which consumers are now aware
of marketing noise and their
ambivalence about sharing personal
details with marketers. They’re
increasingly ambivalent about
sharing data, and they’re actively
seeking help with managing their
online connections.
The “data divide” between
consumers and marketers is a
study in irony: the data that
marketers can more immediately
monetize — purchase data or web
browsing data, for example — is
the data that consumers are most
reluctant to share. On the other
hand, consumers are much more
comfortable with sharing such
relationship building blocks as
hobbies, interests, and lifestyle
data — but this data is traditionally
under-utilized by marketers.
The solution to avoiding the
Pay to Play future is for the
marketing industry to collectively
shift our marketing efforts to the
upper-right quadrant of our Four
Futures graph, toward a future of
Real Relationships. We’ll achieve
this goal by voluntarily using data
to build sustainable relationships,
and voluntarily ceding transparency
and control over these efforts to our
customers. It’s a more difficult road,
but one that will bear richer fruit.
The “data divide”
between consumers and
marketers is a study in irony:
the data that marketers can
more immediately monetize —
purchase data or web browsing
data, for example — is the
data that consumers are
most reluctant to share.

36%
52 | 12
20%
56 | 24
8%
41 | 51
THE DATA DIVIDE
This growing divide between what marketers want to do with consumer data, and what value consumers expect
to receive from it, could lead to a Pay to Play future — a future in which regulators or third-party brokers help
consumers seize control of their data, and marketers are forced to pay a premium to collect it.
A plurality of consumers are interested in the
idea of a third-party helping them manage their
online communications…
…while more plugged-in consumers are more
interested in having a single source for all
marketing messages.
Number of
connections:
In the Pay to Play future, consumers who now promote your brand for free may come to expect a reward.
16%10% 32%
Have promoted brands
online for no reward
Have promoted brands
for a reward
Won’t promote without
a reward
Haven’t promoted a
brand online
63%
Very appealing/
Appealing
Neutral
Unappealing/
Very unappealing
47%
17 | 36
43%
20 | 37
48%
16 | 36
34%
39%
58%
46%
43%
44%
40%
46%
53%
49% 49%
42%
The more readily data can be monetized by marketers, the more reluctant consumers are to share that information.
60%
33 | 7
31%
49 | 20
18%
52 | 30
57%
39 | 4
24%
61 | 15
14%
48 | 38
✗
Happy to share Neutral Never share
Name
Lifestyle
Income
Hobbies
Date of Birth
Email
Address
Purchases
Occupation
Household
Mobile NumberWeb History
49%
38 | 13
24%
54 | 22
14%
30 | 56
1
2
3
4

FUTURE III: The Hunt for Affinity
Marketers fully attuned to the
promise of the digital future
understand that the surest
way to avoid grim scenarios
such as Offer Anarchy or
Pay to Play is to use customer
data to drive real relationships.
But engagement is only one
of the variables at play in this
future; control, the other primary
variable, is equally important.
For even if marketers attempt to
leverage data for its long-term
relationship benefits, we will be
successful only to the degree
that we practice transparency
and voluntarily cede permission
to our customers. Failure along
the control axis will result in a
future in which customers
remain sceptical of our efforts,
and become promiscuous in
their search for symbiotic
brand relationships. Call it
the Hunt for Affinity.
Consider the conundrum of
behavioural pricing. Technology
now exists that gives online
retailers the power to target prices
to individual consumers based
on the vast troves of information
now available about their online
shopping, browsing, and social
media habits. Two consumers
looking at the exact same product
page can receive two different
prices, each based on algorithms
designed to predict and display
the exact price point that will
encourage each of them to click
“Buy” while preserving the retailer’s
profit margin.
From the retailer’s perspective, this
technology is marketing nirvana: we
now have the ability to use data to
deliver the right price to the right
customer at the right time. We can
target our discount dollars with
surgical precision, as opposed to
offering the same discount to every
customer regardless of her loyalty,
tenure, or advocacy. We can lure
new customers in with attractive low
prices, and offer existing customers
enticing prices that encourage
cross-sell and upsell.
But because these sophisticated
analytics happen behind the scenes,
without customer knowledge or
permission, they often don’t perceive
the benefits of this activity. Instead,
they read media exposés on “price
discrimination,” learn about friends
who receive lower prices for the
same product, and wonder what
personal information the retailer
has at hand and how they acquired
it. instead of building relationships,
data used in this way has the
potential to fracture them. Instead
of building loyalty, we may build a
generation of sceptical, promiscuous
customers searching for real
relationships with their favourite
brands, but never finding them.
Our survey reveals that consumers
are already aware of this perceived
loss of control, and their skepticism
is mounting. consider these findings,
as depicted in our illustration on
page 11:
>> Consumers blame themselves.
Even as they recognize that
the volume of digital noise is
increasing, roughly three-quarters
of consumers in our surveyed
markets recognize that their own
online actions contribute to the
increasing number of messages
they receive. This recognition
in turn fuels the perception of
powerlessness they feel — which
may make them less likely to
connect with you in the future.
>> Relevance is the missing link.
Because consumers perceive a
lack of relevance in their digital
communications stream, they’re
most likely to open messages
with pure utilitarian value, such
as those from banks and cable
providers. That only one in five
consumers perceive loyalty
program communications as
relevant demonstrates that loyalty
marketers, too, have much work
to do to increase the value of
program communications.
>> Consumers are reluctant to
engage through new platforms.
Although our research shows that
consumers willingly connect with
brands online, it also reveals that
they’re less likely to do so through
social and mobile platforms:
roughly half of consumers see
no value in connecting via social
media, and roughly half are
unwilling to receive location-based
offers via their mobile devices.
This skepticism and reluctance to
engage is becoming widespread.
Even as marketers are developing
and using tools to deliver targeted,
relevant, and value-added
communications to individual
customers, the lack of customer
permission and control remains
a significant stumbling block to
building long-term, profitable
relationships with our customers.
To help consumers with their
Hunt for Affinity, marketers will
need to focus on the total brand
experience, and to build those
relationships on more than just short
term offers and rewards. This focus
will help retailers already at the
mercy of price comparison sites
and shopper “showrooming”
activity stand out against the
backdrop of marketing noise.
As for behavioural pricing, here’s
a what-if scenario: suppose that,
instead of implementing behavioural
pricing behind the scenes, you
transparently offer lower prices,
deferred discounts, or equity in a
loyalty program to those customers
who voluntarily raise their hands and
ask to participate? What if, instead
of making your customers unwitting
dupes, you made them active
partners in this process?
Welcome to the future of
Real Relationships.
Instead of building
loyalty, we may
build a generation of
sceptical, promiscuous
customers searching for
real relationships with their
favourite brands, but
never finding them.

LOOKING FOR LOVE
While consumers understand that their own actions online have increased the volume of digital marketing
messages they receive, they feel powerless to control the flow. In the Hunt for Affinity future, marketers attempt to
use data to build relationships, but lack of transparency and control leaves consumers sceptical and promiscuous.
Q. Interest in receiving mobile offers:
Consumers understand that their own actions online contribute to the volume of digital noise.
Consumers struggle to find relevance in their online communications, but providing such relevance is the key
to surviving deletion.
Perceived lack of control and unclear value leaves consumers reluctant to receive mobile offers.
Q. Percentage of consumers who say the volume of
digital messages has increased in the past year:
Q. Percentage of consumers who believe their actions
have contributed to this volume:
61% 75%66% 72%59% 72%
Never
51%
Upon arrival
13%
Before departing
26%
In the aisles
8%
At checkout
2%
Without a clear understanding of how online connections benefit them, consumers are reluctant to engage
through social media.
Resolve a
customer
service issue
Provide
feedback
Receive advice
from other
customers
Give advice to
other customers
Contributing to
discussions
None of
these
40%
30%
20%
10%
0%
0% 10% 20% 30% 40% 50% 60%
Cable
providers
Loyalty
programs
REWARDS
Voucher programs
$$$Travel
companies
Grocers
Online retailers
Percent who always read digital communications from this source
Q. Percent who say messages from this source usually relevant:
13%
12%12%
55%
53%21%
59%
30% 26%
25% 21%
21%
19%
19% 17%
15%
16%
14%
Q. Have you connected via social media to:

FUTURE IV: Real Relationships
In the preceding pages, we’ve
taken a close look at three
potential dystopian futures
for marketers. In each of these
futures, marketers fail to deliver
along at least one of the twin
axes of control and engagement.
In each case, this failure results
in either an increase in the cost
of data, a reduction in marketing
effectiveness, or both. Our final,
and most hopeful, look at the
future concludes with a vision in
which marketers succeed along
both axes. In this future, we
leverage data to build long-term
customer loyalty while voluntarily
granting consumers control over
how, when, and where we use
their data. The result is a future of
sustainable, profitable loyalty: a
future of Real Relationships. It may
not be marketing utopia — but it’s
a future in which everyone wins.
The term “real relationship” is no
mere marketing buzzword, nor a
concept to which we must merely
pay lip service before returning to
our regularly scheduled barrage of
always-on promotional messages.
Using modern data analytics
techniques, we can now measure
the value of individual customer
relationships not merely in relation
to our next campaign, quarterly
results, or annual report, but over the
lifetime of a customer’s relationship
with our brand. And as we improve
our ability to tie brand interactions
to transaction data, we’ll soon
develop new definitions of value
that include measures of influence
and advocacy in our models.
At Aimia, we’ve drawn on over
15 years of academic research
and client engagements to identify
the fundamental building blocks
of customer relationships.
These elements are critical to
building sustained loyalty and
customer value:
>> Trust: Over the past two decades,
multiple academic studies have
identified trust as a necessary
component of loyal customer
relationships. Trusted brands
are perceived as honest, ethical,
believable, and possessed of high
integrity. We establish trust with
our customers by using personal
data to deliver relevant offers,
by practicing permission-based
marketing, and by establishing
a transparent value exchange in
which consumers have a clear
understanding of how data use
benefits them.
>> Commitment: Customers are
committed to brands that
demonstrate commitment to
them. How do we demonstrate
commitment to a customer
relationship? By using data to
enhance and personalize the
customer experience. Personal
status and recognition delivered
through a tiered loyalty program;
merchandising, store design, and
pricing strategy all fueled by data
and insight; media impressions
customized to the individual
customer; relevant messages
of clear value delivered to
your customer’s preferred
device; all of these tactics
demonstrate commitment
to your best customers.
>> Reciprocity: Strong relationships
are symbiotic; for loyalty to
last, both partners must derive
strength from the other.
Customer data analytics make
this symbiosis possible. For
marketers, relationship value
comes in the form of increased
customer lift, share of wallet,
and lifetime value. For customers,
value comes in the form of
rewards and recognition that
strengthen their loyalty and make
them champions of your brand.
Our Digital Loyalty Survey reveals
that customers are ready and
willing to share data voluntarily with
brands that earn trust, demonstrate
commitment, and deliver reciprocity.
The illustration on page 13 highlights
these green shoots:
>> We’re willing to engage. Our
research shows that consumers
are more than happy to exchange
personal data for relevance and
value. The one data stream that
they seem reluctant to share —
web browsing data — is ironically
the one data stream that has
been relentlessly monetized
by marketers, often without
consumer permission.
>> Reciprocity builds trust.
Respondents in all three markets
we surveyed are most willing to
share data with companies they
perceive to be using it effectively.
Companies faring the worst in
this calculation are big search
and social platforms that have
most aggressively monetized
data, ostensibly to deliver targeted
advertising — but these platforms
receive at best middling grades
in their perceived relevance.
>> Frequency and channel are key
elements of control. Marketers
who choose the time and place
to deliver marketing messages
on behalf of their customers
will fail along the control axis,
with a corresponding decline in
relationship value. By giving your
customers the choice of when
or where to receive offers, you’ll
reinforce trust and commitment.
Delivering messages personalized
to the hour may be overkill — even
though one in six consumers
would prefer to receive offers
at a particular time of day.
Regardless of consumer readiness
or organizational commitment,
relentless marketplace demands
for short-term results will
continue to drive us toward Offer
Anarchy. Building a future of
Real Relationships, on the other
hand, requires C-Suite support, a
dedicated strategy, robust analytics,
and talented marketers to deliver on
your vision. It’s not a journey for
the faint of heart. For those who
persevere, however, the fruits of
your labour will more than make
up for your hard work.

MARKETING NIRVANA
The most optimistic scenario in our four futures is the future of Real Relationships, in which marketers use data
to build long term engagement in an environment of permission and trust. Our Digital Loyalty Survey supports
the notion that consumers are ready and willing to connect with brands, and will share data with those that
deliver relevance and value back through the time and place of their choosing.
A majority of consumers are happy for marketers to use lifestyle and shopping data to deliver more
relevant offers.
While millennials are more open to location-based offers, consumers overall are much less willing to provide
more data to Facebook and Google.
Q. How happy are you for companies to use information about you in the following ways? (% happy/very happy):
70%37% 37%
Product recommendations
based on lifestyle data
Targeted advertisements
based on web
browsing history
Voucher offers
for products
purchased regularly
Product recommendations
based on shopping history
55%
To build lasting relationships, marketers must recognize and act upon customer preferences.
While Millennials are more open to location-based offers, consumers are much more likely to respond to them
once they’ve had a successful personal experience with one.
More than once a day
Once a day
Once a week
Once a month
Less frequently
57%
4 | 17
18 | 5
1 in 6 Number of consumers who prefer to
receive offers at specific times of day
14% 20% 15% 18%15%25%22%
32% 30%37%40%43%50%
46%
58%64%
Company
uses data to
personalize
I’m willing
to provide
more data
My bank
My credit
card provider
0123456789
CREDIT
My cable
provider
My energy
provider
My mobile
provider
Overall
48% 50% 48%
Over 55
11% 26% 16%
Have not received location-based offer
44% 45% 43%
Under 35
68% 77% 75%
Have received location-based offer
83% 84% 81%
Q. Percent likely to respond to a location-based offer:

CONCLUSION: THE LOYALTY ADVANTAGE
When it comes to building a
future of Real Relationships,
loyalty marketers have a natural
advantage. The loyalty industry
has always been at the forefront
of using data to understand
customer behaviour in order to
deepen relationships for the long
term benefit of both brands and
their customers. The potential
to leverage new data sources to
deepen customer insight, and new
communication channels to reward
their behaviour, bodes well for
loyalty marketers’ ability to build
trusted, committed, and reciprocal
relationships with their customers.
As marketers contemplate how best
to navigate the future, we would
do well to take note of the loyalty
model. As we exploit new digital
channels, incorporate new data sets,
and evolve our analytical skills to
meet the challenge of this rapidly
expanding digital universe, we must
ground our marketing strategy in
fundamental principles drawn
from the loyalty industry:
>> Recognition and reward fuels
engagement. Loyalty programs
have proliferated because of
their grounding in basic human
psychology; customers like to be
rewarded, and they like to feel
recognized. Value propositions
that combine economic rewards
with best-customer recognition
have proven to be the most
effective means of encouraging
your customers to raise their
hands and voluntarily share
data with you.
>> Transparency fuels control.
Loyalty programs also succeed
because, unlike many of today’s
data aggregation and web
advertising platforms, the value
customers receive in exchange
for sharing data with loyalty
program operators is transparent
— the points, miles, vouchers, and
recognition elements are tangible
reminders of program value,
and reinforce the value of the
relationship in the minds of your
best customers. Consequently,
they view loyalty programs as a
safe haven within which to share
personal information.
>> Relevance breeds trust. Loyalty
marketers understand that offer
relevance is often the most
underutilized form of value in
marketing. Our Digital Loyalty
Survey reveals that customers
are instinctively willing to share
personal information that
aids relevance — particularly
data about lifestyle, hobbies
and interests, and preferred
communication channels.
To breed trust that pierces
through the marketing noise,
ensure that every offer you send
is as relevant as you can make it.
There will unfortunately be an
inevitable temptation towards
short-termism, as the possibilities
inherent in new sources of consumer
data and new communication
channels tempt some of us to
over-message and even turn a
blind-eye to data privacy issues.
If this failure occurs on a broad
scale, it could lead to rapid
consumer disillusionment,
subsequent withdrawal of
access and permission, and a
descent into offer anarchy.
To make the future of Real
Relationships a reality, we must
demonstrate restraint and respect
for consumer’s permissions and
preferences from the start. We
must use the new digital tools
at our disposal to deliver relevant
messages at relevant times,
while avoiding over-messaging
and intrusion.
For the digital transition to deliver
all that it promises, we must secure
a new contract of permission
and trust between marketers and
consumers. In this effort, loyalty
marketers are well placed to
lead the broader marketing industry.
The world’s most successful loyalty
programs have demonstrated
how relationships built on trust,
commitment, and reciprocity
fuel data, insight, and customer
value. Our customers are ready
and willing to take this journey
with us — we need only meet
them halfway.
For the digital transition
to deliver all that it
promises, we must secure
a new contract of permission
and trust between marketers
and consumers. In this effort,
loyalty marketers are well
placed to lead the broader
marketing industry.

ENSURE ALL
DATA COLLECTION
BENEFITS THE
CUSTOMER
LET YOUR
CUSTOMER CHOOSE
THE CHANNEL
BUILD
RELATIONSHIPS
BASED ON TRUST,
COMMITMENT, AND
RECIPROCITYDELIVER VALUE
AND RELEVANCE
IN EVERY
INTERACTION
ASK FOR
PERMISSION
BE
TRANSPARENT
IN YOUR
DATA USAGE

Chart page 3:
Q1. Which of the following
do you own/use?
Q2. Please indicate for
each of the different types
of digital communication,
what you personally use
it for.
Q3. How many companies
or brands do you currently
“like” or “follow” on
Facebook or Twitter?
Q6. And what was the
main reason you decided
to like or follow them?
Q15. Have you ever
received communications
from companies in any of
the following ways?
Q16. Overall, to what
extent do you enjoy
receiving offers by text?
do you receive offers by
text messages from?
Q18. In a typical week,
how many text messages
do you receive from
companies?
Q18b. And how many
of these are text
messages with offers
and promotions?
Q19. Would you say the
total number of text
messages you receive
from companies is…?
Q47. Have you ever done
any of the following?
Chart page 7:
Q7. Have you ever
regretted liking or
following a company?
Q13. Have you ever
regretted signing up
or registering with
a company?
Q15. Have you ever
received communications
from companies in any of
the following ways?
do you receive offers by
email from?
Q23. In a typical week,
how many emails do you
receive from companies?
Q23b. And how many
of these are emails with
offers and promotions?
Q24. Would you say the
total number of emails
you receive from
companies is?
Q25d. In general, out of
every 10 messages (emails
or texts) you receive from
companies, how many
would you say you…?
Chart page 9:
Q25b. Compared with
this time a year ago,
would you say the
number of emails and
text messages you get
from companies has?
Q25c. To what extent
do you think the change
in the amount of online
communication you
receive has been affected
by actions you have
taken — for example
signing up with more
companies or opting-out
of receiving emails?
Q33. In the white box
below you will see types
of information companies
might collect about you,
or ask you to provide. For
each one, please drag and
drop it into the box which
best describes how you
feel about sharing it.
Q36. For each of these
companies, to what
extent do you
agree that…?
Q41. Some people have
told us they get so many
messages with offers and
promotions that they like
the idea of a company or
organization you could use
who would manage the
messages you receive, so
all your deals and offers
would come from one
source. How appealing do
you find this idea?
Chart page 11:
Q31. GPS technology
which is built in to many
mobile phones means
it is now possible for
you to receive offers or
promotions on your phone
which are based on your
location at the time.
Have you ever received
a location-based offer
like this?
Q38. Has a company
ever surprised you with
a particularly relevant or
personalized offer?
Q39. Which company was
that, and why were
you surprised?
Q47. Have you ever done
any of the following?
Q48. Would you do any
of the following if you
were offered an incentive
or reward?
Q49. And did you receive
any kind of incentive or
reward for making
positive comments
or sharing offers?
Q50. Would you only do
this again if you were
offered an incentive
or reward?
Q50a. Which of these
would encourage you to
connect with a company
you deal with on social
media like Twitter
or Facebook?
Q50b. And if you did
connect with a company
on social media, would you
expect to be rewarded for
doing any of the following:
Chart page 13:
Q27. Thinking about the
messages you receive
by text or email from
companies, for each type
of organization, please
indicate how relevant to
you they are in general.
Q29. And how often
should an individual
company (i.e. not a daily
deal site) send you offers?
Q35. And which of these
specific companies would
you trust?
Q37. Some companies
use information about
you to make the messages
you receive from them
more personal. How
happy are you for
companies to use
information in each
of the following ways?
SURVEY QUESTIONS

About the Author
Martin Hayward, Vice President,
Global Digital Strategy
Martin has been working with Aimia since
2010, leading the development of the
company’s global digital strategy.
An acknowledged thought leader and
author in the future of customer data,
insight, loyalty and marketing, Martin
was previously Director of Strategy and
Futures for dunnhumby, at the heart of
the development of the innovative use
of detailed customer data for marketing
and communications.
In 2010, Martin published a book, Any Colour
You Like As Long As It’s Any Colour You Like,
exploring the future of customer data
and insight.
Martin’s previous position was as
Executive Chairman of The Henley
Centre, WPP’s leading Strategic
Marketing Consultancy.
Prior to joining The Henley Centre,
Martin was the founding Managing
Director of BBH Futures, the strategic
consultancy arm of the Bartle Bogle
Hegarty Advertising Group. He was
also Head of the Marketing Services
Department for Mercury Communications,
during which time Mercury was voted
Brand of the Year. Martin began his career
in Account Planning at Ogilvy and Mather.
About Aimia
We are a global leader in loyalty management. Our unique capabilities include proven
expertise in building proprietary loyalty strategies, launching and managing coalition
loyalty programs, creating value through loyalty analytics and driving innovation in
the emerging digital and mobile spaces. Employing more than 4,000 people in over
20 countries, we build and run loyalty programs for ourselves and for some of the
world’s best brands. Customer data is at the heart of everything we do. We are Aimia.
We inspire employee, channel and customer loyalty.
Visit us at aimia.com.

MINE
GOLD
From the social graph to
communication networks to rewarding
new levels of loyalty, social media is data gold.
You need more than just a Facebook page.
You need a social loyalty strategy.
450FACEBOOK
FRIENDS
240TWITTER
FOLLOWERS
305TUMBLR
FOLLOWERS
118FOURSQUARE
FRIENDS
168PINTEREST
FOLLOWERS
210BLOG
SUBSCRIBERS
For an initial conversation, call Will Shuckburgh
on +44 20 7152 4806 or write to him at
Will.Shuckburgh@aimia.com.

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