Loyalty World USA brought 'big data' home

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By: Wise Marketer Staff |

Posted on November 14, 2012

What do Lady Gaga, the Oakland A's, and Big Data have to do with each other? Simply put, each of them played a noteworthy role at the recent Loyalty World USA conference organised by Terrapinn in Las Vegas, according to The Wise Marketer's US contributing editor Bill Hanifin, of Hanifin Loyalty.

Here Hanifin presents us with a quick overview of the key themes and insights from the event, as well as highlights of some of the more compelling presentations.

Big Data was the kick-off topic as Rick Ferguson, VP Knowledge Development AIMIA and Bryan Pearson, President LoyaltyOne shared their individual takes on the topic, illustrating why loyalty marketers need to be paying attention. Pearson explored the importance of data privacy and shared some great examples of how big data can be used to both attract and repel customers. Noting that trust has diminished between consumers and consumer brands over recent years, he shared that only 42% of consumers trust big business with their data. This and other good research was made available from a LoyaltyOne research document entitled 'Customer Data: Privacy, Profit and the New Paradigm'.

The LoyaltyOne research showed that 78% of customers surveyed report seeing no benefit in the communications or offers that come as the result of sharing their personal data with big brands. Bryan encouraged the delegates to be proactive in using data in a judicious manner and played a fun game with the group, "Clever vs. Creepy", that illustrated the bright and dark possibilities of leveraging Big Data in the context of customer loyalty programmes.

Ferguson shared a forward-looking presentation helping the audience define what Big Data really is and what it means to all of us as marketers, whether in direct or loyalty marketing. He share that one of the greatest challenges for firms expecting results from Big Data is that over 190,000 data analyst jobs will need to be filled over the next several years if value is to be properly extracted from the data farms.

Perhaps most importantly, Ferguson highlighted that Trust, Commitment and Reciprocity are the foundational elements needed for brands wishing to communicate effectively with their customers. He also described in compelling detail the way brands are trending toward adoption of "offer anarchy" as well as other potentially destructive models to customer loyalty including the familiar "pay 2 play". The challenge, of course, is to use Big Data in a way that serves to create and enhance real relationships, not just use data for data's sake.

The first day of the conference was keynoted also by Cheryl Bachelder, President and CEO for Popeyes Louisiana Kitchen. Bachelder provided a passionate account of how the Popeyes brand has evolved and emphasized that the chain identified its franchise operators as its most important constituency when engaging a brand retooling exercise a few years back. The constituent group included franchisees, guests, employees, shareholders, even vendors, so Popeyes has its eye on the ball in a way that Fred Reichheld advocated in his early work.

Popeyes runs its organisation on sound principles and Bachelder noted that "listen carefully, but learn continuously" coaching and development of franchisees, and creating an atmosphere of servant leadership, were all core to their growth and success. Basing the business on this solid rock has paid off, as the operating margins for Popeyes have exceeded industry averages and locations are expected to double in the US over the next 4 years.

The two day event was punctuated by a number of other compelling talks. Among the most memorable were an overview of Walgreen's Balance Rewards programme (with its 12 million enrolment figure in its first few weeks) given by Adam Holyk and a review of the new Kellogg's Rewards programme (the company grew its known customer database by 250,000 to 15 million in one year) by Kim Begeman.

Tony Ventrice, Senior Game Designer for Badgeville, gave a highly insightful talk about how to merge game mechanics to make a loyalty programme "get to the next level" and Marcin Kosciak hosted James Stoeppler to tell the interesting tale of how Enterprise Rent-A-Car built up from a pure recognition programme to a fully-fledged loyalty programme.

Day two of the conference was perhaps a little more 'showy', with talks from Billy Beane, General Manager Oakland A's baseball team and whose work was the subject of the 2003 bestselling book Moneyball, and Jaunique Sealey, a social media strategist who helped Lady Gaga make her hit album Born This Way become a monster success.

And of course, among presentations from Gamestop, Virgin Atlantic, Choice Hotels, Motorola and Microsoft, Hanifin Loyalty also found time to provide an overview on how loyalty marketing is changing to work better in the digital economy, and I also previewed part of our Loyalty Manifesto (which will be published very soon - see www.LoyaltyTruth.com).

The consensus among the tenured loyalty folks attending the event was that, despite the compelling material presented, the industry still needs to make a significant shift to stay ahead of evolving consumer behaviours. Considering that about five people in total were on Twitter during the event (look for the hashtag #LWUSA), it's clear that there is still more gesturing about the social graph than actual involvement with it. So stay alert as the industry will see significant and positive change over the next 3 years. Let's all be part of that growth.

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