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Tomorrow’s loyalty strategy is already here

With many having spent the past two years working on customer engagement, the idea of ‘customer intimacy’ is gaining traction and increasing in importance among customer loyalty marketers, according to The Wise Marketer’s European contributing editor, Peter Wray, who recently attended the Loyalty World 2009 conference in the UK.

At the conference Rick Ferguson, editorial director for Colloquy, explained the idea of customer intimacy and the importance of “equity, continuity and dialogue”.

Entrepreneur Luke Johnson, famous for his themed restaurants brands and his weekly column in the Financial Times, also explained the growing need for excellent service delivery and insight-driven innovation to provide “a superior customer experience”.

Alex Hunter, an independent consultant who was previously the head of Virgin Online, referred to the social media space, and provided a solid introduction to the key issues in what is a fast emerging (but as yet poorly defined) business model for loyalty marketers.

Ed Falconer from the Australian department store Myer gave a lively presentation on the Myer customer loyalty programme, which now boasts some 4.3 million members and is tied to 63% of sales within the brand. Falconer’s key point was the importance of the company’s market research-led approach to driving the programme, and the intelligent usage of data derived from the loyalty programme.

Macy’s senior vice president of marketing services, Aubyn Thomas, provided insight into the ongoing battle for space in the US consumer’s wallet, with an average membership of 14 customer loyalty programmes and only 3 or 4 loyalty cards being likely to stay in the customer’s wallet. Thomas concluded with a summary of the retailer’s Star Rewards programme and its 4 tiers (with each level having increasing soft benefits), and a member base of some 24 million consumers.

Other highlights included a case study of how UK DIY retailer Homebase has partnered with the Nectar coalition and migrated customers from its previous Solus loyalty card programme. Gary Twelvetree from Barclaycard also gave some early insights into the new Barclaycard loyalty programme that will launch in the UK in spring 2010. The programme will have all Barclaycard holders auto-enrolled as members right from the start, and they will earn cash rather than points. The forthcoming programme promises both scale and diversity of retail partners.

The key theme of the conference, however, was that the ‘big hitters’ of the coalition loyalty marketing world are starting to move toward the global expansion of their operational expertise. The key sponsors for the event were LoyaltyOne and Aeroplan, and many of the presentations were based on case studies related to the partner programmes that the sponsors provide.

Bryan Pearson, president for Loyalty One, told delegates to “go global, go green, or go home” with his discussion of the emerging trends of coalition partnership marketing, cooperative social networks, customer centric marketing messages and the cause-related initiatives that are responding to customer movement in increasing numbers into this space.

The other key theme of the conference was the emerging impact of social media on customer loyalty marketing. The most innovative application of blending social media into a real-time and interactive channel for customer feedback, loyalty and communication came from Starwood Hotels. For example, 1 out of every 2 Starwood Preferred Guest members says they have watched a video on YouTube, 1 out of 5 follows one or more blogs, 1 out of 2 logs into a social network at the same frequency with which they engage with the programme’s own web site, and 1 out of 4 visits social photo sharing web sites.

Overall the conference served as a reminder to marketers the world over that the fast-evolving consumer space can be a lucrative, if sometimes complex and difficult, environment for loyalty marketing initiatives. The themes that dominated the 2009 conference would have been considered too fanciful even a few years ago, but it seems that tomorrow really has arrived today.

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