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Winds of Change for Loyalty Marketing

A different kind of wind is blowing across the loyalty marketing landscape.

Less driven by entitlements associated with traditional points programs, the new wind seeks to sway best customer behavior via an enlightened view of enhancing the “customer experience.” Brands without loyalty strategies who seek to develop one, and brands experienced in the loyalty marketing genre who seek new approaches, are both running against the wind.

It reminds me of an old Bob Seeger song.

Customer Experience Management (CEM), a catch phrase coined by industry pundits and technology service providers, is argumentatively the most important differentiator we will see in the next ten years of loyalty marketing innovation. The team at Kobie prefers to avoid specific labels, but we are totally focused on the potential behavioral changes associated with any brand that can truly differentiate itself by consistently delivering a superior interaction with customers across channels, touch points, communications platforms, social networks and transactional environments.

Such differentiation will define the winners in the next decade. Lack of performance in this domain will almost certainly characterize the losers.

Our industry’s past and future may not necessarily be chronicled by the same principles. Our industry (loyalty marketing) has enjoyed more than 30 years of success in designing, enabling and operating programs which recognized and rewarded best customers on the basis of their sustained patronage with our brands. Our future will require a consistent ability to deliver superior experiences to our customers at every touch point, interact and engage with customers in a genuine and entertaining manner, support brand advocates, respond to brand critics and allow the inevitable social phenomenon to unfold without trying to manipulate its design.

Our challenge will be to achieve these heights while still producing a measurable return on investment from our efforts.

At Kobie, we often discuss the three T’s – technology, training and thought leadership.

  1. If your best customer strategies cannot be enabled by an integrated, data-driven, multi-channel platform capable of enhancing the customer experience in a socially-connected, mobile friendly framework, then seek new technologies.
  2. If you are not willing to connect customer loyalty with associate passion, training, incentives, performance improvement metrics and the enabling tools which allow your employees to deliver a superior customer experience, then you might as well quit now.
  3. If your loyalty strategies follow your competition, if you can not envision the enormous potential associated with the targeted, relevant, inter-connected environment of today’s consumer then seek new thoughts, new advisers and attempt bold, new initiatives.

This doesn’t mean that traditional points programs are over. Far from it. It means that winners will expand their value propositions to include a myriad of techniques in partnership marketing and soft benefits that we have discussed since the early 1990’s but have often failed to implement. It also doesn’t mean that traditional solutions are right for every brand.

If the social media tsunami and resulting network effect can be leveraged with the delivery of a unique and differentiating customer experience at all points of interaction (not just purchase), then the approach itself becomes the loyalty strategy.

Winners and losers. The choice is yours. Are you ready to redefine the customer experience for your brand and fully realize the potential associated with exceptional product and service delivery – especially with your best customers and highest tier loyalty program members?

We’re open to take up the debate.  I’d love to listen and hear your opinions.

Author: Bram Hechtkopf

Bram leads the “marketing of Kobie Marketing.” He consults with current and prospective clients on new business 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. Prior to Kobie, Bram worked with the Human Capital Transaction Advisory Services practice for Ernst & Young, LLP, where he developed and presented analyses and recommendations on executive incentive and equity plan design and due diligence findings to senior management and the Board of Directors of Fortune 1000 clients. Prior to Ernst & Young, Bram worked with Towers Perrin in Manhattan as a consultant specializing in incentive plan design for executives and sales forces. Bram received his Bachelor of Business Administration degree with honors from the Goizueta Business School at Emory University with a concentration in Marketing and Information Technology.

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One Comment

On June 14th, 2011 Mike wrote:

Very well thought piece.
Thanks for sharing!

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