CRM - June 2008 - (Page 27)

to the improvement and the company’s ability to address consumer demands. “All of a sudden, the customer feels valued and respected,” Cottle says. “So while that’s not necessarily an offer,” he adds, “it goes into the foundational elements of any relationship.” For companies that are trying to increase or restore loyalty after a few missteps, talking to customers is perhaps the safest and most effective way to get started. Another way to inspire loyalty is to be innovative and creative, and to extend a benefit that everyone can enjoy simultaneously. This past March, Chockstone announced a technology called SingleSwipe—the union of loyalty programs with debit and credit cards. Customers are uniquely identified at the point of sale when they use their existing credit or debit cards, instead of having to carry a store-specific card. Merchants have also shown interest in the convenience of one-swipe consumers. Moreover, large payment processors such as Chase and Bank of America are able to process “How can we get them to connect with us with their hearts, and not because of a few points?” transactions quickly and efficiently, which in turn improves any real-time rewards and promotions engine. And yet some loyalty-builders have nothing to do with points or rewards at all. Midwestern supermarket and drugstore chain Hy-Vee, for example, enlisted Dr. David L. Katz, director of the YaleGriffin Prevention Research Center, to rate from 1 (least healthy) to 100 (healthiest) the nutrition content of every food item in the store. With this program, HyVee is truly differentiating itself from the rest of the market.“They’re building loyalty through their product [and] no one can really copy that,” Bleuel says. Happy Kampers Kampgrounds of America (KOA) has approximately 420 franchise campgrounds and operates 30 properties itself. For years, KOA’s loyalty program consisted of a 10 percent discount with a Value Kard membership. Membership itself, says Steve Young, director of loyalty marketing for KOA, wasn’t difficult to acquire, nor was the discount unique to KOA. “Anyone with a heartbeat could get a 10 percent discount,” he recollects. Young’s marketing team began by asking for customer perspectives. Their research, he says, indicated that campers “would drive a little farther to go to a KOA if [KOA] provided something other than the 10 percent discount.” The program details were primarily derived from the company’s effort to communicate with existing members and get to the core of what makes the relationship valuable. Smart Button’s technology helped KOA create a Web site where campers track their stay history, check point status, and set personal camping preferences—making it easier for campers to reserve and register and for KOA to accommodate each stay (and improve its marketing). The program, Young says, “gives people the reward of camping for camping—it lets them do what they love to do.” All 540,000 campers in the previous program were transferred to the new Value Kard Rewards program for a free year. Young suspects that the fee increase from $16 to $24 will have a negative impact on membership renewal, but, he says, with thousands of new members just two weeks after launch, KOA may be in for a pleasant surprise. —JT THE CONTEXT OF LOYALTY Customers have come to expect more from their shopping experiences and rewards programs, for better or worse, are now part of that experience. Compared to the loyalty-program overflow in the airline industry, though, some companies have managed to avoid providing a material incentive. Chockstone’s Lipp says that some programs simply don’t apply to companies that only engage with each customer a few times a year. “The ability to give away a free cookie to drive that extra purchase doesn’t play well in that environment,” he says. On the other hand, a company that’s on the ball with its product and service may not need the buffer of a loyalty program. Nordstrom, for example, is recognized for its ability to tend to your every shopping need, up until you make the purchase. “Are they well-known for their rewards program? Do they even have one? I don’t know,” Lipp says. What he does know is that even in a recession, if he needs clothes, he goes to Nordstrom. Everything comes down to making the customer feel valuable. Loyalty programs are contributing to that effort, but they’re not enough to keep you in the game long term.“Loyalty-reward programs do serve a purpose. [They] do make consumers feel nice, but left on their own, they’re not the right thing,” Cottle says. “Put it in context, everything’s good. Take it out, and things go bad.” Contact Editorial Assistant Jessica Tsai at jtsai@destinationCRM.com. CUSTOMER RELATIONSHIP MANAGEMENT | JUNE 2008 27

Table of Contents Feed for the Digital Edition of CRM - June 2008

CRM - June 2008 Contents Front Office Reality Check Customer Centricity The Tipping Point Making Mashup Masterpieces Trouble in the Air CRM on Twitter Is SaaS Ready for Its Contact Center Close-up? CRM: In the Public Interest Required Reading Lollipop Loyalty Best Practices Series: CRM & eCommerce eGain NetSuite Infor Longwood Software Vovici The Second Coming of 2.0 Believe the Hype About Hosted Contact Centers All Talk So Hot It’s Cool Linksys Gets Shaken, a Community Is Stirred The Risky Risk Business Awana Hears a SaaS Sermon Secret of My Success Re:Tooling Scouting Report Pint of View

CRM - June 2008

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