Shaun Cunningham Explains How a Reward Program Provided a Once in a Lifetime Experience

25, March 2011 • Usa today

AN iNdepeNdeNt SUppLeMeNt froM MediApLANet to USA todAy

consumer LoyaLty

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Photo:(front) dam customers Shaun Cunningham explains how a reward program provided a once in a lifetime experience

4StepS 2011 loyalty census daily rewards Memberships earn points for to maximizing your reward have exceeded everyday living program benefitS 2 billion in the U.S. and tasks photo: istockphoto.com photo: istockphoto.com 25, March 2011 • Usa today 2 AN iNdepeNdeNt SUppLeMeNt by MediApLANet to USA todAy chaLLenges Since their inception more than 100 years ago, loyalty programs have changed the way consumers interact with the companies from which they purchase products or services. We recommend Customer guarantee Learn why customer satisfaction doesn’t create loyalty.

pAGe 12 the history and future “...when we open our ears, seek first to understand and listen to our of loyalty programs customers, we are able to position our ne of the earliest lines launched its Mileage Plus pro- programs has never been greater. solutions to solve efforts to win the gram; other airlines followed in the “Consumers Everything from the advent of social customer’s hearts, minds ensuing months and years. are looking media (Facebook “likes” and com- problems…” and wallets of Over the years, loyalty programs pany specific “tweets”), check-in a day of rewards p. 4 customers was have evolved well beyond airlines— for “surprise services (Gowalla and Foursquare), “Sally” shows how she uses reward the S&H Green expanding into all verticals of direct and delight” mobile proximity and targeted com- programs on a daily basis Stamp program, marketing in both the business to munications (Gold Mobile and Moca- Social media channels bring originating in 1896. To encourage business (B2B) and business to con- that creates pay) to transaction-based credit card extra earning potential p. 10 o A look at how companies are loyalty, consumers received tiny sumer (B2C) marketplaces. Today, even engagement insert and on-line statements (Clovr, utilizing Web 2.0 and other new stamps when they made purchases mass marketers have adopted the loy- BillShrink and Cardlytics) and deal communication mediums from participating merchants, glued alty concept. Why? Because brands in the channel of the day offers (Groupon and Living them onto pages of booklets (known industry-wide have recognized that in which they are Social) are continuing to change the as “alternative currency”) and there is proven value in cultivating a loyalty landscape. redeemed them for products when loyal customer. most likely to Consumers are looking for “sur- the accumulated stamps had attained partake—and prise and delight” that creates engage- a certain value. Just how popular was acquisition vs. retention ment in the channel in which they are consumer loyalty, 1st edition the program? S&H Green Stamps once According to a new survey from companies are most likely to partake—and compa- march 2011 issued three times as many stamps as the Chief Marketing Officer (CMO) nies are listening and engaging their listening and managing director: Jon Silverman the US Post Office, and by the 1960’s, Council, most marketers (61 percent) customers in that channel like never [email protected] S&H was the largest purchaser of believe that loyalty program partici- engaging their before. Companies are tailoring their editorial manager: Jackie Mcdermott [email protected] consumer products in the world. pants are the best and most profitable customers in that loyalty initiatives in ways that help Another well-known early loyalty customers, while 65 percent view cus- consumers get their desired reward responsible for this issue: publisher: Chad Goldman program was General Mills’ long- tomer loyalty program investments as channel like mix which, in turn, engages them in [email protected] standing Betty Crocker Points Pro- a very essential part of the marketing a deeper, long-term relationship with business developer: paul Herron never before.” [email protected] gram in which customers collected mix. We have also seen a shift away the brand. designer: Missy Kayko points which were redeemable for from mass acquisition to targeted Loyalty programs are no longer [email protected] Contributors: Mark Johnson, Kelly kitchenware from a catalog. As the retention. Companies know it is more solely focused on points. Loyalty is a Hlavinka, Max friend, bryan pearson, story goes, it all started with a tea- expensive to engage, attract and con- destination created through data-cen- patrick Sojka, ryan Green, emily K. Murphy, bob Gold, Mike Gorun, rob spoon tucked into boxes of Wheaties vert customers versus understand, tric marketing communications that Urbanowicz, Heather passe, david patron, in 1931. General Mills then put paper reward and retain their current cus- lead to sustainable and measureable Maya Leibman

coupons into packages of Gold Medal tomers. This switch from acquisition change in customer behavior. There distributed within: Flour and other General Mills brands. to retention benefits the consumers is also a realization that some con- USA todAy, March 2011 this section was created by Mediaplanet Ultimately, point values were printed as the loyalty programs now are more sumers desire and will only respond and did not involve USA todAy or its on the outside of boxes. focused on maximizing engagement to generous point-based or “hard” editorial departments. and keeping the customer “loyal.” (discounts, offers, incremental value) Mediaplanet’s business is to create new more than a coupon program In today’s very competitive mar- benefit-based programs. On the other customers for our advertisers by providing Clipping box tops and accumulating ket, loyalty is a business imperative. hand, some individuals want the readers with high-quality editorial content that motivates them to act. Betty Crocker points became a habit As loyalty becomes the most impor- “soft” program benefits (wine tast- in many households. As reported on tant word in the lexicon of CMOs, the ing, free shipping, complimentary gift Minnesota Public Radio, Mark Bergen, concept has changed. Loyalty has wrapping, complimentary upgrades). chair of the marketing department at evolved from a point-centric model to Your ability to let the brand know your the University of Minnesota’s Carlson a process by which marketers use all preference has never been greater. School of Management, says the Betty consumer touch points, data, insights Today’s stamps and spoons are by the numbers Crocker program was remarkable for and voice of the customer responses points, status, and interactive commu- two characteristics—its longevity (social media and survey insights) nication achieved through traditional CoLLoQuy Loyalty Census and the depth of emotion it inspired to increase the efficacy of their mar- and incremental “loyalty” program ■■ 2 billion: The number of among its devotees. It became more keting communications, loyalty offerings. This new breed of loyalty loyalty memberships in the U.S. initiatives has made access, interest than a coupon redemption program, programs and offers to their custom- exceeded 2 billion for first time. Bergen says, by working its way into ers. No matter what label we put on and reward levels more tailored—and ■■ 18.4: The average house- the fabric of family life. Betty Crocker it—loyalty, engagement, advocacy, engaging—to the individual. We have hold has signed up more than 18 officially retired her catalog in 2006. etc.—every brand needs to cultivate a seen Sears/K-Mart, Southwest Air- programs, compared with 14.1 Increased competition follow- base of devoted customers in order to lines, Delta, Talbots, Target, Carlson programs in 2009. ing the 1978 Airline Deregulation Act drive long-term, sustainable success. Hotels, Capital One, and TGIFriday’s ■■ 8.4: Despite the increase in encouraged airline marketers to cre- These brands want to reach out to the re-launch programs in recent years to overall membership, the average ate ways to reward repeat customers consumer in new ways that create increase their relevancy and engage- number of programs in which and drive brand loyalty. The first idea engagement. This generates oppor- ment, therefore making the rewards members are active is just 8.4. ■■ 46: at American Airlines, a special “loy- tunities for consumers to earn more more “empowering” to the consumer. Regardless the membership-to-activity ratio, those 8.4 alty fare”, was expanded to offer free from their programs than ever before. So the opportunity to find programs active memberships still repre- Because of new engagement tech- that are more suited to the benefits first class tickets, first class upgrades sent 46 percent of the total, up for companions, or discounted coach nologies, the ability of consumers mark Johnson that you, as an individual consumer, president & Ceo, Loyalty 360 from both 44 percent in 2009 and tickets. Within the week, United Air- to extract more value out of their are looking for are greater than ever. 39 percent in 2007. ■■ 50: Loyalty membership in the specialty retail sector rose a surprising 50 percent, indicating coLLoQuy loyalty study revealsu.s . reward statistics not only a bump in the number of loyalty programs available, but while the term symbiosis is Kelly Hlavinka, them, which inevitably leads to a lack stores (ie CVS, Rite-Aid, Walgreens). also a focus on using loyalty as a most commonly reserved for managing Partner of consistent engagement. New opportunities are springing up competitive differentiator of colloQuy ■■ 1.6: Though an industry matters of biology to define a From the consumer perspective, continually in these sectors. powerhouse in the last two relationship of mutual benefit Hlavinka offers helpful questions for ■■ Am I taking advantage of sectors census reports, the financial between two species, most shoppers to ask themselves when offering the most significant services industry has pulled back, economists would agree in the upcoming 2011 COLLOQUY signing up for loyalty-rewards pro- rewards? (While credit cards typi- with a negligible 1.6 percent gain that it also properly defines Loyalty Marketing Census is that the grams to extract the most value: cally offer up to three percent cash in the 2009-2011 period. the dynamic between busi- number of loyalty program mem- ■■ What are the businesses with back, travel and hospitality compa- ■■ 33: The drug store industry nesses and consumers: th- berships in the United States now whom I’m already a loyal customer nies often offer more valuable bene- saw membership rise by 33 rough both products and ser- exceeds two billion for the first time and can already be receiving rewards? fits in the form of free night stays, VIP percent, aided by the launch of the vices, companies offer value ever, which means that the average ■■ What businesses offer rewards services, etc.) major new programs and pilots to customers who in return, U.S. household is currently enrolled bonuses when I shop with comple- In tandem with the need for con- among leading chains. ■■ 17: grant their patronage in the in eighteen different loyalty member- mentary businesses whose prod- sumers to sharpen their loyalty- A 17 percent gain in airline industry memberships was unex- form of dollars. ship programs. Hlavinka adds, “As a ucts and services I also purchase on a membership acumen, Hlavinka pectedly high. But the industry, regular basis? emphasizes that businesses also result of the recession, other research which used loyalty to win and ■■ As the economic recession has put shows that one-third of consumers What businesses offer perks or share an equal responsibility to retain customers following pressure on both parties to extract now view these programs as more privileges beyond monetary rewards? improve and expand their loyalty- September 11, again leveraged this more value from this relationship, the important because they can stretch (Examples include apparel altera- rewards programs. At first glance, tool in the Great Recession. power of loyalty-marketing programs their budget even further.” However, tions, concierge services, access to these programs are often viewed ■■ 26: The gaming industry to reward shoppers for their buying the 2011 COLLOQUY Loyalty Market- airline lounges, early access to depart- by companies as a means to attract posted a 25.5 percent gain in behavior to stimulate such activity is ing Census also reveals that only 8.4 of ment stores during holiday sales, etc.) more customers, but Hlavinka rein- loyalty programs, likely the result now being taken more seriously than those memberships are active, mean- ■■ What businesses with whom I’m forces their ability to also strengthen of new players in a relatively new ever before as a strategy for smarter ing that businesses need to do more to already a loyal customer offer ways to company ties with its existing cus- loyalty field. ■■ 21 marketing and savvier shopping. keep members engaged and consum- earn faster via a store credit card? tomer base, whom she refers to as : The fuel and convenience store sector saw a 21.2 percent According to Kelly Hlavinka, man- ers can do more to reap additional ■■ Consider joining programs in those businesses’ “greatest asset” now decline in memberships, the benefits from these opportunities. sectors experiencing intense loyalty- more than ever in the current eco- aging partner of COLLOQUY, the lead- result of lost opportunity— ing provider of loyalty marketing pub- More often than not, shoppers sign membership program growth, nomic climate. everal big players eliminating or lishing, research and education, the up for loyalty membership programs including specialty retailers (ie. Best Max Friend reducing their programs. most striking finding to be released without knowing how best to utilize Buy, Sephora, DSW, etc) and drug- [email protected] *

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inspiration Step 1

Keep your Question & ansWer aCCountS Current and bryan pearson President, up-to-date loyaltyone

getting the most from your rewards LoyaltyOne President Bryan Pearson is a recognized authority on loyalty marketing in the United States, Canada and the international marketplace. Pearson took some time from his busy schedule to discuss the importance of consumer data, the opportunities for mobile in customer engagement and tips for making the most of your rewards program. ■■ Can you share some tips for getting the most from reward programs? There are a number of ways. What comes first to mind is consolida- Survey SayS tion—focusing your spending on a Jupiter research has few cards. The average U.S. house- determined that more than 75 percent of consumers hold holds memberships in 18 use loyalty cards. loyalty programs. Consumers will photo: istockphoto.com get further faster by focusing their efforts and spending on just a few. ThenPage with your program6 ti ofP choice,s takeword advantage of double-dipping— 410 most loyalty programs also include a(char credit card component. 2500) It is one of the fastest ways to increase your points—using a rewards credit card at merchants that also have their a day of rewards own loyalty programs. You get twice as many points. Also, don’t forget meet “Sally.” wife. daughter. about the “soft” benefits. Often- And while she’s on the airline’s Sally and her fellow small- and travel plans. times members have access to mother of three. Small busi- website, she notices that she can medium-sized Verizon business The first stop is the American extended shopping hours, reduced ness owner. earn points by shopping at a variety customers can also receive discounts Airlines website. As a member of shipping costs and other benefits of Rapid Rewards Partners (hotels, and special promotions every time American’s AAdvantage loyalty not available to non-members. Like most of us, in today’s fast- car rental companies, restaurants, they shop at the Verizon Business program, there are over 1,000 oppor- ■■ what do loyalty companies paced, budget-sensitive world, retailers, etc). Realizing that her Links Online Mall. Plus, they earn tunities for Sally to earn miles from do with the information they Sally’s always looking for ways to parents’ anniversary is just days away, additional Business Link Rewards flying to hotel stays to dining out and gather about me? save time and money. What she she sends them flowers from Tele- Bonus Credits for every dollar they using credit cards plus special bonus Customers have an expectation has learned over the years is that flora, earning her an additional 600 spend at the Mall. mile offers. For this business trip, Sally of reciprocity—they provide their no matter what hat she’s wearing, rewards points. Now she’s thinking about the will earn 1.5 points per miles traveled data to organizations with the integrating the loyalty programs of On her way home from the office, big presentation she has today and (and she can redeem as few as 12,500 expectation those organizations her favorite brands into her day-to- Sally stops first at her local RiteAid. going through the checklist for miles for a free ticket). As any frequent will use it to create more relevant day life helps her do just that. She picks up three prescriptions at a the meeting in her head. Ordered traveler can understand, what really and meaningful relationships with Research has found that Sally’s not cost of $15/each and $25.75 worth of lunch? Check. She called Panera makes Sally loyal to American Airlines customers. Purchase data, which alone. Surveys by Jupiter Research household items. Simply swiping her yesterday. Along with the other 4.5 are the cost- and time-saving benefits can include what a shopper buys, where she buys it and how she have determined that more than 75 loyalty card upon checkout earns her million registered members of the she gains as an Elite member of the pays for it, really creates a complete percent of consumers use loyalty 115 points (25 points/ prescription plus MyPanera loyalty program, Sally program: complimentary upgrades; picture of that consumer. It also cards. And, a recent CMO Council one point/dollar spent). Accruing 125 receives ”soft rewards” that match access to a special service desk; helps us understand where she is survey reported that the average points earns loyalty cardholders a 10 her buying habits—such as exclu- waived ticketing service charge and in life—is she a time-starved single household actively participates in six percent discount. sive invitations, experiential oppor- checked bag fees; and priority check- or a health-conscious mom for loyalty programs. She looks at her watch. No time to tunities like baking with Panera in, security screening, and boarding. instance. This helps retailers feature So, just how beneficial are these stop at the grocery and make dinner bakers, preview tastings of new Next, she hops onto the National the right merchandise at the right programs? Let’s take a walk through a before her son’s soccer game that menu items, recipes, cooking tips Car Rental’s website because she price. It also helps us tailor rewards typical day in the life of Sally to learn evening, so she stops at Qdoba on her and a free bakery-cafe menu item. loves the time she saves using the and recognition that are most how being loyal to her favorite brands way home. Since the chain credits Sally is also very devoted to Panera Emerald Aisle—National’s fast lane meaningful to individual members, saves her time and money… and 100 points per full-priced entrée and because they reward her for her for frequent renters. As with most from today’s hottest merchandise options like iPads to exclusive makes her life easier. awards a free entrée after 1,000 points company’s catering orders. Through car rental companies, the reward concert tickets and of course, travel. have been earned (buy 10 entrées, the loyalty program, she receives program gives Sally credits for her Sally the wife and mother get the 11th entrée free), swiping her a $25 gift certificate for every $500 rental—one credit for each rental ■■ How should i expect to be treated by the rewards Before heading into work, Sally stops registered key fob when paying for spent in catering purchases. And with seven credits earning a free- programs i join ? at the Dunkin’ Donuts around the her five entrees puts her halfway to a given the number of client meet- car day. But, what Sally really loves is Consumers are rightfully corner from her office. When she free meal. ings she hosts, these certificates that not only does the Emerald Aisle concerned about sharing personal first enrolled in the DD Perks loyalty Fast forward a few hours. Sally’s really add up each month. speed up the rental process, but it information,and they don’t program Sally received a free medium just about ready to hop into bed with a Presentation handouts ready? also lets her pick any car on the lot want unsolicited emails or to beverage. As a member, she also gets good book. Then it dawned on her. Her Check. Sally had all the documents once she arrives. be flooded with promotional another free medium beverage on daughter has a school dance coming copied and printed at Staples, earning She also taps into Wyndham messages. Consumers will trust her birthday, exclusive online and up and she forgot to stop at DSW to see her 10 percent of her purchase back Rewards to book her hotel. Here a loyalty program that protects in-store offers, and more. Plus, because if they have a pair of shoes to match in rewards that can be spent on she can choose from 11 brands their privacy, makes sure all the she registered her card online, Sally her new dress. So, Sally hops on DSW. anything at Staples in store or online. that participate in the program, content they receive is relevant and can earn free coffee, coupons and com and finds the perfect pair of And, because Sally spends more than including well-known chains like fresh, provides rewards that are the chance to win concert and show pumps. Knowing how busy the rest $1000 per calendar year at Staples, Wyndham Hotels and Resorts, Days meaningful and reasonably attain- of her week is, she decides to order she enjoyed an automatic upgrade to Inn, Ramada, Super 8, and Howard able, and engages in a dialogue with tickets. them. If there was such a thing as a Sally pays for her coffee with her them (along with a pair of sandals Premier status. Johnson. Sally earns 10 points for set of Golden Rules that protect the Blue Sky American Express. Because for herself). Her DSW Rewards card She charged her orders at both every dollar spent on a hotel stay and rights of rewards program partic- she is a member of the AmEx Blue (which costs nothing to get) allows Panera and Staples to her Bank of she can redeem points for free hotel ipants, these are the rights that Savings Program she receives a $5 her to earn points with purchases. America Visa. Like any small business nights, airline tickets, movie and would be protected. Dunkin’ Donuts gift card for every Her $100 order banked 1,000 points— owner, Sally is constantly seeking theme park tickets, gift certificates ■■ what are the hottest trends four visits to the chain per month. just 500 points shy of earning a $10 ways to increase her cash flow. Using and more. in loyalty programs today? Good thing there’s no limit to the DSW Rewards certificate of savings. her BoA small business card helps Lastly, Sally calls to make a reserva- Partnerships are taking off as number of cards consumers can DSW Rewards members also enjoy her do that because she earns three tion to take her prospective clients to organizations realize there is power receive per month. With Dunkin’ invitations to double points events, percent cash back on purchases at dinner at one of her favorite restau- in aligning with other brands with Donuts being a hop, skip and jump advance notice of promotions, a office supply stores, gas stations and rants, Landry’s Seafood, which is part similar values and customers so from her office, she’s become quite special birthday certificate. for computer network services and of the Landry’s group of restaurants. they can enhance the offering the devotee. one percent cash back on all other As a member of their Landry’s Select to the consumer. And of course, Sally and her husband have been Sally the small business owner purchases. As an added bonus, the Club, Sally earns one point for every there is technology. Fundamen- promising the kids they will go to At the office, Sally turns on her card has no annual fee and there is no dollar she spends on food, beverage tally, loyalty programs are about New York for a long weekend. Once at computer powered by Verizon’s limit to the cash back Sally can earn. and gift card purchases at any of creating relationships with your customers—and the biggest trend her desk, she hops on Southwest.com high speed internet and taps into their restaurants nationwide or gift in relationships is the technologies to book their flights. She loves to fly on her Verizon Business Link account. Sally the business traveler card purchases online. When 250 that enable them, especially social Southwest when traveling with her As a Verizon Business Link Rewards Taking several business trips per year, points are earned, those points are media, communities and mobile family because their Rapid Rewards member Sally earns one Bonus Credit Sally has developed an affinity for a converted into a $25 reward. Last year, applications. For loyalty marketers, program has no black out dates, for every dollar spent with Verizon few brands that not only help her save Sally gave her employees Landry’s mobile devices present new oppor- unlimited reward seats, points that on qualified charges reaching a money… but help take the hassles out gift certificates for their holiday tunities to more meaningfully never expire—and bags fly free. She combined total of $125. She can then of travel. gifts—earning her $200 in rewards connect with on-the-go consumers, and her family have accrued enough redeem these points for gift cards Her presentation went so well certificates. Applying the rewards one-to-one. This in turn presents points to earn two free tickets at the and certificates for national retailers that the client wants her to come to she earned will help her manage the some exciting options for mobile “wanna get away” fare (she needs to and top rated local restaurants, as their offices next week to present cost of this business dinner. rewards, payments and commerce. redeem 6,000 points per ticket) and well as tickets and certificates for pro- the program to the rest of the execu- The trick is being nimble, flexible LoyaLty 360 and on target. earns six points/dollar spent on the sporting events, entertainment and tive team. With no time to waste, Sally three tickets she’s purchasing. getaways. hops on the computer to make her [email protected] FREE NIGHTS 6,500 WAYS.

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1) To qualify for the promotion, the member must (i) register at a participating property, at wyndhamrewards.com/4x or by calling 1-866-996-7937, (ii) book a reservation for and stay at a participating property between February 3 and April 30, 2011, and (iii) complete their hotel stays by May 7, 2011. Members will receive double Wyndham Rewards points, airline miles or rail points for the second qualifi ed stay, triple for the third qualifi ed stay, and quadruple for the fourth qualifi ed stay. See wyndhamrewards.com for terms and conditions including participating properties. One qualifying stay includes all consecutive nights at the same hotel regardless of check-ins or check-outs. © 2011 Travel Rewards, Inc. All hotels are independently owned and operated excluding certain Wyndham and international Ramada hotels which are managed by an affi liate or through a joint venture partner. Visit wyndhamrewards.com for our privacy policy and program terms & conditions. 25, March 2011 • Usa today 6 AN iNdepeNdeNt SUppLeMeNt by MediApLANet to USA todAy

inspiration Step Question: Over the past decade what important changes have been made to loyalty programs? 2 answer: In addition to savings, companies are now offering unique underStand wHat your experiences, creating long-term relationships with customers. reward programS Have to offer redeeming points for an unforgetable experience hen Shaun Cunningham, “This is the 21st century out, FedEx gave us a certain amount prefers to characterize what he won Cunning- and people want real rewards and “this is the of points. We do a lot of interna- as something more: “For my grandfa- ham, CEO of value-added bonuses, unlike some tional shipping, so we decided to ther and me, sharing that experience fulfillment rewards programs that you’ve found 21st century and save up our points for a whole year.” together was a phenomenal thing, and logistics in the past, which gave you little more people want The strategy proved successful especially standing side-by-side company than a clock for your desk. In a small and Cunningham was one of three with FedEx driver Denny Hamlin Prologic business setting with less staff, it’s real rewards highest bidders during the My FedEx during the national anthem.” While Fulfillment,W first signed up for the My hard to devote the attention to sign and value-added Rewards Race Time auction. He was large companies increasingly try to FedEx Rewards program, he never up for a rewards program, but FedEx soon able to invite his 86-year-old strengthen their relationships with could have predicted that his partic- gave me bonus points as part of an bonuses...” grandfather, a longtime NASCAR smaller businesses through loyalty- ipation would soon allow him to be exclusive invitation which ultimately fan, to accompany him to the race, rewards programs, they are quickly standing alongside his grandfather convinced me to sign up, which led to which made the experience a truly realizing that they have more to offer in the pit of famed NASCAR driver a once-in-a-lifetime opportunity that I special event for him on both a profes- than simple monetary discounts and Denny Hamlin as he thundered can cherish forever.” sional and personal level. When he savings. By leveraging their expan- around the track at the Sylvania 300 in and his grandfather finally arrived sive network and infrastructure, the #11 racecar bearing the sponsor- a unique opportunity at the track and saw how much of large companies can reward affiliated ship emblem of Cunnigham’s small Cunningham was initially impressed the #11 racecar was covered with companies with memorable experi- business. For years Cunningham had by the high-end prizes being granted his small business’ company logo, ences that instill a deeper and more enjoyed a productive relationship by the FedEx rewards program, Cunningham was admittedly enduring sense of relationship that with FedEx, but like any savvy leader ranging from signed NFL footballs to stunned: “I was totally taken aback — lasts as long as the photos of Shaun of a small business, he was always tech gadgetry to weekend getaways, it was covering the whole left quarter Cunningham and his grandfather on the lookout for enhanced benefits but when he came across the of the car! My understanding is that standing within the inner circle of for his company. While signing up upcoming auction for the NASCAR it costs FedEx millions of dollars the NASCAR track hang on the walls for loyalty-rewards programs of the experience, his goal became clear. to sponsor that racecar yearly, and of his office. past have often failed to appear as “When I first heard about it, I thought there’s no way our small business “There’s an upcoming a top priority to small businesses, that the prize of getting to go to a would have been able to partake in auction in the FedEx rewards who are struggling to meet more live NASCAR event, along with the that if it wasn’t for the FedEx Rewards program for a music awards pressing day-to-demands, a new sponsorship opportunity to put our Program.” show that I’ve got my eye on,” wave of loyalty-rewards programs company logo on the FedEx racecar, While Cunningham is happy to Cunningham quickly replies, with is finally engaging business owners was a very cool opportunity for a discuss the new clients and sales that a grin. with the promise of far more valuable small business,” he recalls. “We’d were generated for his company from Max Friend prizes and, perhaps most impor- been a business growing tenfold Shaun Cunningham the exposure and notoriety associ- Ceo, prologic fulfillment [email protected] tantly, experiences. According to and for every shipment we shipped ated with the NASCAR experience, he

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N6509-1_6.23x10.31.indd 1 3/10/11 5:40 PM

JOB #: N6509 N6509-1 • American Airlines Duped from C. Howard by: byn TITLE: DIVERSITY AD – USA TODAY Path: PRINT PRODUCER: NORITA JONES Production3:AmericanAirlines:Jobs:NJobs:N6500Jobs: Proof #3 PROJECT/TRAFFIC MGR.: DOUG JACKSON Trim: 6.23"w x 10.31"h Bleed: None Live: N/A ART DIRECTOR: CAROLINE HOWARD Page 1 of 1 Date: 3/10/11 SHIP: 3/10/11 Inks: 4/C Revised by: byn CPS CheckOut: ______PUBLICATION & INSERTION DATE: USA Today Special Insert Loyalty Programs, 3/25–3/27 Agency Approvals: INITIALS DATE Supervisors: INITIALS DATE Proofreader ______Acct. Sup. ______Copywriter ______Mgmt. Sup. ______Art Director ______Prod. Mgr. ______Creative Director ______Client Approval: INITIALS DATE Account Exec. ______25, March 2011 • Usa today AN iNdepeNdeNt SUppLeMeNt by MediApLANet to USA todAy 7 inspiration

naSCar fanS Shaun Cunningham and his 86-year-old grandfather pose with denny Hamlin at the race. photo: fedex

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Must travel on Amtrak within 90 days of enrollment to earn bonus points. Other terms and conditions may apply. Offer expires 12/31/11. Amtrak and Amtrak Guest Rewards are registered service marks of the National Railroad Passenger Corporation. 25, March 2011 • Usa today 8 AN iNdepeNdeNt SUppLeMeNt by MediApLANet to USA todAy

inspiration Step 3

Keep traCK reWard Program tiPs of your aCCountS’ expiry dateS

patrick Sojka, Staying on top ceo/founder of of tHe trendS frequentflyerbonuses.com many rewards programs have moved away from offering Keep accounts current one type of reward. and don’t lose your miles photo: istockphoto.com ■■ Trillions of banked miles and points in travel reward many loyalty and reward programs are branching out, offering members additional programs worldwide have led ways to earn more currency (points/miles/cashback) outside of the programs’ core offering. to many of these programs enacting expiry dates on the miles and points held in the accounts of millions of people. Frequent Flyer programs in particular are the proprietors of expiring miles and the majority engaging in trends of airlines in the world will now remove miles from your account due to periods of inac- for example, members in more rewards earn a chance to play traditional tivity. For hotel and shopping verizon’s business Link Many rewards programs have “reward ”Boduberu” drums in the Maldives programs the opposite tends rewards program may shop moved away from offering one type programs that or take a sunset drive through a to be true with the majority of in the verizon business Links of rewards. For example, United and nature reserve in Namibia. They them having no point expiry online mall—purchasing Marriott—who in the past offered allow customers can go shopping with a personal limitations. items they need from rewards only on their services, such to use their shopper at the most exclusive Periods of between 12 to 36 brands they trust—and as free airline tickets and free rooms multi-brand boutique in São Paulo, months of inactivity are the earn more business Link respectively—are now offering every- points for exactly enjoy a night of fishing with local most common seen in frequent reward Credits. thing from merchandise, to gift what they want fisherman in Vilamoura, Portugal, flyer programs however some cards to cash back. Financial rewards have a private lesson with a certi- do go further out to four or five Members shopping through the programs are expanding as well. are the most fied Tai Chi Master in Suzhou, years. The general definition of online mall receive discounts from Where in the past cardholders could sought after by China, or get a behind-the-scenes activity means any addition or more than 350 partnering retailers redeem for merchandise, programs tour at CNN in Atlanta. deletion of miles or points in (including Best Buy, Dell Computers, like Citibank’s ThankYou Program customers and In addition to GHA Discovery, an account. To keep an account Office Depot, Expedia, Barnes & Noble have significantly expanded their engage them on others are offering experiential or current, collectors just need to and Target), plus they earn additional reward offering. Here, members earn adventure rewards too. American have one earning or redeeming Business Link Rewards Bonus Credits ThankYou Points when they use their a much deeper Express Platinum Membership action within the period set out for every dollar spent at the mall. Citi Credit Card, bank with Citibank level.” Rewards allows cardholders to by the program. Many collec- These partner-earned credits are and shop with participating retailers. redeem for any of their travel plans, tors are being caught by the added to a members currency balance ThankYou Points can be redeemed rob murphy as well as for entertainment events cmo, circles inactivity rule due to a lack of allowing members to earn faster, for rewards and experiences that from concerts to Broadway shows. knowledge in their program. reaching their desired rewards more include merchandise and travel, plus world, the newly created GHA “Customized, experiential Members tend not to read the quickly. gift certificates to a variety of favorite Discovery (Global Hotel Alliance) reward programs such as these put terms and conditions set out Airline and hotel companies have stores and restaurants, movie ticket loyalty program unites 12 luxury the customer in the driver’s seat— by programs or simply delete been bringing consumers partners certificates and more. If cash is your chains and their nearly 300 increasing the value of every point emails of any changes that the for many years—after booking air favorite reward, you can also redeem hotels—Omni, Kempinski, Leela, they earn. No single product-based program has tried to advise travel online, you’re offered options for a check in $50 or $100 denomi- Doyle Collection and eight other reward program can satisfy the them of. for hotels and car rental. While these nations. Points can even be used to small- and mid-sized, regional needs of every customer. Reward Keeping your miles from options are still available, retail banks, donate to the American Red Cross luxury chains. Five years in the programs that allow customers to expiring can be quite simple as card issuers, hospitality companies, International Response fund. And if making, the GHA Discovery is an use their points for exactly what long as one keeps track of their and retailers have joined forces to you can’t find just what you’re looking innovative program that rewards they want are the most sought account and knows the dates serve up thousands of special offers for in their online redemption mall, travelers with “Local Experiences” after by customers and engage of their last activity. This can from online and in-store merchants— members with at least 10,000 points that have been designed by local them on a much deeper level,” be easily done by creating an giving you a variety of fun and can call one of Citi’s Wish Specialists experts offering members access says Rob Murphy, CMO, Circles, excel spreadsheet or by using exciting ways to earn more currency who will find or orchestrate even the to a large selection of adventures, the leading provider of customer one of the many online mileage (miles/points/cashback). Be sure to hardest-to-find rewards! exclusive experiences and off-the- engagement marketing solutions. tracking websites like Award- check into the benefits of your favorite beaten path activities that are not wallet.com or Gomiles.com. If loyalty programs to see which offer experiential rewards easily available or accessible to LoyaLty 360 you are not traveling frequently partners and online shopping malls. For the first time in the hotel the general public. Members can [email protected] or don’t have a credit card tied to your program many loyalty programs have options to earn miles for online shopping or how to have fun, do good deeds, for redeeming a small amount of miles by donating them to charity as ways to keep your account current. They also have stay healthy and earn rewards options to buy or transfer miles which can be a good way to top most american consumers sors include iTunes, Marriott, The vating consumers to take small green to diabetes management. It also off an account to get bigger have the same reaction Home Depot, Monster and Amer- actions can have significant and long- provides a monthly electronic news- rewards. All of these actions when told that redeemable ican Airlines. Members can earn lasting impact on the environment,” letter with articles and tips on living a are considered activity and will rewards can be earned for rewards starting at just 50 points. said Recyclebank CEO Jonathan Hsu. healthy life with diabetes and tools to keep a travel rewards account doing good deeds and taking Rewards can be redeemed locally at Since 2005, Recyclebank communi- help manage the disease, in addition current. positive action such as coffee shops, gyms and museums. ties have recycvled over 550,000 tons to savings on products. The airlines have set mileage choosing the stairs, talking Premium rewards include gift cards of material. Recyclebank has helped LoyaltyOne’s WellQ program expiry rules to try to lessen the openly about mental health, from Amazon.com, 1-800 Flowers, double, and even triple, recycling provides consumers tools and incen- liability on their books with all learning to perform Cpr Best Buy, Gap, Staples, Starbucks and rates in more than 500 communi- tives to set and attain wellness goals. the unused miles but have put or signing up to be an many others. ties across 28 states and in the United The program has been tested with the burden of keeping track organ donor. A recent visit to the DailyFeats Kingdom. patients at a number of pharmacies of the dates on the miles or website showed that the most A partial listing of Recyclebank in Kroger grocery locations, and at points on the collectors. Some What’s the catch, everybody asks. popular feats included the following: reward categories includes apparel, Duane Reade and independent phar- programs do send out notice of That’s why DailyFeats, the New York getting serious exercise, getting up at entertainment, food and beverage, macies across the United States. Peter expiring miles or list the expiry City-based online community where a decent hour, reading some news and gift cards, beauty products, elec- Meyers, senior director at LoyaltyOne, date when viewing accounts people share and earn rewards for getting whole grains into your diet. tronics, music and restaurants. The said that once WellQ is integrated online but many do not. Collec- their feats, tells its members right Conservation-minded U.S. Wall Street Journal on March 3 ranked into pharmacies, plans call for adding tors have to do their due dili - upfront—We really mean it, there’s no consumers can reap rewards from Recyclebank number one on its list of other incentives such as benefits for gence to make sure the miles in catch. Recyclebank, a web site and lifestyle the top ten clean-tech companies. refilling prescriptions on time, inter- their travel rewards accounts The DailyFeats slogan is “Doing community that rewards people Living a healthy lifestyle clearly is acting with pharmacists and partici- do not expire by keeping an Good Should Be Rewarding.” for recycling. Recyclebank uses its own reward but brands and service pating in screening programs. eye on the dates of their last Members collect points for doing discounts and deals from more than providers increasingly are offering These are just some of the many activity and ensuring they simple but meaningful feats that 3,000 local and national businesses additional incentives to do so. reward programs that prove—there is perform an eligible activity at benefit the body, mind, home and to provide people an incentive to CVS/pharmacy’s ExtraCare no catch. For the educated and consci- least once within the period set community. Points can be redeemed make environmental pledges, such as Rewards program, with 66 million entious consumer, doing good should out by the program. for real-world rewards, ranging promising to use less energy, increase active cardholders, includes among be rewarding. You’ve earned them, make from discounts at local businesses to their recycling or educate themselves many other features—ExtraCare sure you don’ t lose them. savings from national brands. on sustainability. Advantage for Diabetes. The program Just some of the DailyFeats spon- “We firmly believe that moti- offers videos on topics related [email protected]

25, March 2011 • Usa today 10 AN iNdepeNdeNt SUppLeMeNt by MediApLANet to USA todAy

inspiration Step Question: How is social media impacting loyalty rewards? 4 answer: Companies are making a direct connection with loyal consumers

by reaching beyond the in-store or eCommerce experiences. uSuSe teCHnoLogy Question & ansWer to ConneCt witH your ryan green, favorite senior director programS of customer loyalty and Partnerships, southwest airlines social media channels How have reward programs impacted the travel industry? bring extra earning potential ■ Reward programs have had a significant, positive impact on more consumers use social ■■ earn rewards for social izable message on their behalf. nels dedicated to earning miles. the travel industry in a variety of media now than ever before. activities. Brands that integrate For each social network connec- The American Airlines AAdvan- ways. They benefit frequent trav- their loyalty programs with social tion, members earn one additional tage program has dedicated Face- elers by rewarding them for their Consumers continue to sign up for media often reward consumers for reward point per transaction. book and Twitter pages that offer loyalty; they benefit companies and interact on social networking social mentions—such as “checking- ■■ Special deals for followers. mile-hungry members a commu- by giving us the opportunity to sites. They “Like” websites, brands, in” at stores, “liking” the brand Through social networks, like Face- nity where they can share their recognize our loyal customers and products on Facebook, share on Facebook, or referring a friend book and Twitter, brands share “passion” for earning AAdvantage and give customers an incentive good and bad experiences with their to a product or service through special coupons and discounts with miles and they fun or unique ways to continue traveling on South- followers on Twitter, and announce Twitter. They use small incentives their followers. For example, on they use them. west; they allow us to better their location with check-ins on loca- to encourage members to interact Valentine’s Day, women’s specialty If social media can offer addi- understand the travel patterns of tion-based services like Foursquare with a brand outside of a purchase retailer Ann Taylor Loft gave a free tional benefits to the consumer and our customers and communicate and Facebook Places. Forrester esti- experience. For example, California- shipping code to all of their Facebook valuable qualitative data and word- to them in a specific, meaningful mates that more than 80 percent of based airline Virgin America offers Fans. Similarly, 1-800-Flowers offers a of-mouth marketing to the brands, way; and they provide a source US online adults participate socially. 25 Elevate points per “check-in” to 20 percent off coupon to anyone that then why isn’t everyone doing it? of revenue. I know it’s a cliché, Now, in a recovering economy, when Facebook places or Foursquare at “likes” their Facebook page. Tapping Chances are, most brands already but loyalty programs truly are a companies are deeply invested in their airport terminals or baggage into the thriving social gaming have some sort of social media pres- win-win. retaining and gaining the trust of claims. Starbucks offers special drink network, General Mills subsidiary ence, but it may not be an integral their customers, social channels discounts to anyone that earns the Green Giant Fresh partnered with part of their loyalty program and How has the current provide a rich opportunity for loyalty Mayor badge on Foursquare. Zynga’s FarmVille to package virtual strategy. Yet. The volume of chatter economic climate affected programs to establish a deeper ■■ earn rewards for purchases. item codes with fresh Green Giant and ever-changing landscape of brand loyalty? connection with their members and Some programs allow members to products. Each code was redeem- tools and technologies makes it ■ In a tough, economic all of their friends and followers. link their loyalty card or member able for online for small amounts difficult for brands to determine the climate such as the one we are The broad reach of social media number to Twitter, Facebook, or of virtual Farm Cash—the currency most effective strategy. Similarly, in, customers become even is not lost on loyalty marketers: Foursquare accounts. Through this players use to maintain their Farm- the limited number of consumers more cost conscious than they Increasingly, loyalty programs turn connection, each time they use their Ville crops. Green Giant Fresh is one carrying a GPS-enabled Smart- normally are, and they look for to social media for the opportunity loyalty card to make a purchase and of two General Mills brands that have phone makes a mainstream surge value wherever they can find to extend their reach beyond the check-in or tweet about it, they earn partnered with Zynga to raise brand in location-based loyalty unlikely. it. It makes a brutally competi- in-store or eCommerce experience additional rewards. For example, awareness and loyalty. But, as social continues to heat tive industry even more compet- and actively influence customer members of frozen-dessert maker ■■ engage members on a up and more consumers flock to itive, and it highlights the need loyalty. Social media provides a Tasti D-Lite’s TastiRewards program personal level. In order to be most Twitter and Facebook, expect to see to have a valuable, competitive means to establish a more person- can choose to register their Twitter, effective, loyalty programs want more loyalty programs bring social loyalty program for customers. alized relationship with consumers, Facebook, or Foursquare usernames consumers to share their experi- media to the forefront in 2011. We view it as an opportunity to deliver enhanced customer service, to their TastiRewards account. Then, ences and feedback with the brand, increase brand loyalty among our and record detailed customer pref- every time they make a purchase, the their networks, and other members. eMiLy K. Murphy, customers. erences. Social media offers loyalty social networks they’ve chosen auto- American Airlines is one of the first Forrester research program members opportunities to: matically update with a custom- airlines to have social media chan- [email protected]

Like your privacy? Join a loyalty program By Rick Ferguson “In an age in which a good Battle lines are being drawn downloading apps without portion of our lives are your data appropriately, then in the war over consumer worrying about who’s view- you should receive offers that data protection and privacy. ing their private data. lived online, consumer data look personalized and feel relevant. If you’ve expressed There is, however, one envi- The war is not one of good privacy is now a critical an interest in a beach vaca- ronment where consumers versus evil, but rather a war tion and you get an offer for can share personal infor- for control of precious re- component of all consumer- a ski package, then the spon- mation without fear of its sources. If consumer data is brand relationships.” sor isn’t paying attention. misuse: loyalty and reward the new oil, then it’s natural Vote against generic offers programs. In an age where for marketers to want access by shifting your spend else- every personal and finan- to this resource in order to cial detail about your life is where. target their marketing dollars You might also earn special expect from a sponsor when up for grabs by marketers, more efficiently. If that effi- perks and privileges other- you join a loyalty program? In an age in which a good por- loyalty programs provide Read the privacy policy. ciency translates into lower wise unavailable to you. If the Here are a few tips: tion of our lives are lived on- a safe haven in which data prices for consumers, then program execution doesn’t line, consumer data privacy is collection and usage offers everybody benefits. live up to its billing, you can now a critical component of clear benefits for both con- Any program you join should all consumer-brand relation- The problems arise from the always opt out of future par- sumers and their favorite have clear, prominent terms ships. The good news is that methods used by some com- ticipation. brands. and conditions that spell out loyalty programs are ahead of panies to access your person- This expectation of a value exactly what information the the curve. While the battle for al information. While some exchange makes loyalty pro- sponsor plans to collect about consumer privacy rages on, marketers do so honestly and grams an attractive proposi- you and how they will use it. On one side of the privacy these programs offer an oasis transparently, others simply tion for both consumers and If you can’t find the policy wars are social media plat- wherein you can enjoy valu- take your personal details brands. By joining, you volun- or if you don’t agree with it, forms, search engines, smart Opt-in to all communica- able relationships with your without permission. They teer to share personal infor- don’t join. Rick Ferguson is Vice Presi- phone app makers, data ag- tions favorite brands. install cookies in your web mation about your shopping dent, Knowledge Development gregators and media com- browser, pull personal details habits, lifestyle and prefer- for Groupe Aeroplan, Inc., a panies, all of whom have a . Program sponsors and from your Facebook profile ences. The program sponsor global leader in loyalty man- vested interest in getting you their partners should only or surreptitiously track your then agrees to use what they agement. Groupe Aeroplan to share as much personal send you direct mail, email or movements via your smart learn about you to deliver also owns Carlson Marketing, information as possible. On cellular communications that phone. If your house sat atop value back in the form of re- the world’s leading relation- the other side are the Federal you have specifically asked to a large oil field, would you wards, privileges and rel- ship building company. You government, privacy watch- receive. If you start getting want an oil company to drill a evant communications. The can learn more about both dog groups and consumers spammed, then opt out of the well in your backyard without sponsor’s hope is that you’ll Look for relevant offers. companies at www.groupe- themselves, who want to en- program. your permission, and without find enough value in this re- aeroplan.com. joy browsing the web and paying you for the privilege? lationship to consolidate your If the program sponsor is using By contrast, loyalty programs category spending with them. offer compelling benefits for And unlike some other mar- consumers willing to trade keters, program sponsors personal information for generally promise to collect value. When you join a pro- data about you only with your gram, you do so because you explicit knowledge and per- find the offer attractive. You mission. They’ll collect only might earn airline miles, ho- the data they need, and use tel points or retail gift cer- that data to benefit you. tificates—solid economic benefits that save you money. What behavior should you 25, March 2011 • Usa today AN iNdepeNdeNt SUppLeMeNt by MediApLANet to USA todAy 11 inspiration mobile networks are gaining connected consumers

Soon you will not need to ning a new type of mobile barcode guests by sending “in-the-moment” forward it to the rest of their trav- tertop and scan the Starbucks Card carry all those Loyalty Cards (sometimes called QR Codes or 2d incentives, such as a coupon for soup eling group. And how about this? Mobile App’s on-screen barcode to around with you. according Codes). When the cashier scans on a very cold day, right to the custom- The Renaissance Mayflower Hotel make a purchase. In addition to the to reports, the average u.S. the item at checkout, it automati- er’s smartphone. Customers can also has now made their in-room phone mobile payment capability, the app consumer holds member- cally taps into your loyalty account use their smartphone to text or scan system and printed local directory of allows customers to manage their ship in 14 loyalty programs. and deducts the coupon offer from a code at various food stations in their services available to their guests on Starbucks Card account, check their the cost—eliminating the need to university or corporate café to get an their mobile devices, enabling a guest, card balance, reload their card with Wouldn’t it be great if taking advan- present a physical coupon. Shop- on the spot coupon or special promo- while traveling throughout the city, any major credit card (iPhone users tage of the benefits loyalty programs ping is expedited, taking advan- tion delivered right to their phone. to one-click and reach the concierge, can also use the PayPal feature), check offer was streamlined? Given today’s tage of coupons and special offers “Most consumers today always have front desk, bell captain, restaurant, their My Starbucks Rewards status hectic and often stressful lifestyle, is simplified, and the overall brand their mobile phone with them,” says maid, and nearby local attractions. and find a nearby Starbucks store consumers are looking for ways to experience is enhanced. Kevin Dwyer, senior director of food ”The mobile guest services solu- with the store locator feature. save time and money and remove the “We are very excited about the service for Restaurant Associates. tion is fast, easy-to-use, cost effec- With mobile payment, the Star- “hassle-factor.” opportunities digital coupons “With these technologies we can tive and quite efficient. It is so easy to bucks Card platform further elevates The good news is that help is now bring to our customers in terms of now turn their phone into a ‘virtual send a restaurant’s address to a guest the customer experience by deliv- in the palm of our hands. You just convenience and easier manage- coupon’ – eliminating the hassle of now. We love it!” says Robert Nagys, ering convenience, rewarding loyalty need to know what to ask or look for. ment of their shopping experience. paper coupons and making it more guest services manager, Renaissance and continuing to build an emotional Here are five new ways innovative Customers are becoming more tech- convenient for our customer.” Mayflower Hotel, Washington, DC. connection with customers. “For brands, retailers, service companies, nologically savvy everyday and are ■■ in-Hotel. Mobile Concierge. ■■ in-Life. Realizing that speed, millions of our customers, the Star- and technology providers are making looking for retailers who can meet Making travel plans and coordinating ease and convenience of paying bucks Card is a part of their daily their loyalty programs easy to use by their needs. We feel this is one way activities can be time-consuming upon checkout is something today’s routine, and our Card program offers integrating the one thing most of us for us to connect to our customers and downright painful when you’re on-the-go customers crave, Starbucks compelling benefits for gifting, never leave home without—our cell and provide a service they are looking on the road. Innovative hotels, like has integrated mobile payment func- payment and rewards,“ said Brady phone. for”, says Annette Hoeffel, director of the Renaissance Mayflower Hotel tionality into its Starbucks Card. To Brewer, vice president Starbucks ■■ in-Store. No Paper Coupons or marketing, Chief Super Market, with in Washington DC, are making life a use mobile payment at Starbucks, Card & Loyalty. “We’re listening to Paper Cuts. Innovative retailers stores in Ohio. lot easier for their loyal guests. Their customers just need to download our customers and will continue to such as Chief Super Market are concierge, directly from his or her the free Starbucks Card Mobile App innovate and offer new ways for us to enabling their loyal customers to ■■ in-wallet. No Plastic Cards. We computer can now send restaurants, for select BlackBerry smartphones, recognize and reward our customers have special savings offers placed could all use a little help organizing sports, theater, and other information iPhone or iPod touch mobile devices. with personalized rewards and directly into their loyalty accounts our lives. Now there are Smart- directly to their guests’ cell phones— They can thenpay with their smart- enhanced mobile offerings.” by simply texting a keyword or scan- phone applications that can store giving them valuable at-their-finger- phone by holding their mobile device Perhaps faster than any other tech- and catalog all your loyalty cards for tips information they can readily in front of a scanner on the coun- nology in the last decade, the explosion quick and easy access. Often it’s as of the mobile network is changing the simple as taking a picture of each Get CoNNeCted game for brands. Given the increasing card with your cell phone camera and sophistication of handsets and plat- share your thoughts and get more ard data and messages rates may filing them directly into the organizer forms, mobile is poised to realize its information; simply text “loyalty” apply. you’ll receive one message. application. to 53016 or scan the tag to re- download the free tag app for true potential of combining prox- “No bunch of cards or keychain ceive your mobile survey. stand- your phone at http://gettag.mobi imity to consumer with personalized attachments to carry, especially since content and timely messaging. For every store has a card. I used it for brands, highly connected consumers the first time yesterday at CVS and it mean a dramatic mind shift in how we worked perfectly. Since I often forget have to think of our loyalty marketing my cards, this is a great tool because strategies. my phone is always with me,” says Triney Gurl who lives in the Philadel- BoB GoLd, mobiLe ConvenienCe GoLd MoBiLe use your cell phone to keep track of phia area. reward progrms. ■■ in-Café. Instant Savings! [email protected] photo: wellQ Compass Group rewards its loyal 25, March 2011 • Usa today 12 AN iNdepeNdeNt SUppLeMeNt by MediApLANet to USA todAy neWs

don’t miss! mike gorun managing Partner and founder, mediatrack

auto dealerships operating highly successful customer loyalty programs should expect to see increases in service business of 30 percent or more.

Those that are successful structure their efforts around three loyalty traits—loyal customers, loyal employees and loyal store management. An example is Acton Toyota in Littleton, MA, which launched a loyalty program in 2007. So far the dealership has registered more than 24,000 members to its program. “We promote our rewards program as part of the sales process in the showroom and service department and talk it up as an advantage to purchasing at our dealership,” General Manager Mike Hills reports. “And when a service customer pulls in, the first thing we ask is whether the customer will be redeeming reward points today or accumulating them for redemption down the road. We really have engrained this promotion and process into our entire operation.” Some results from Acton’s program: ■■ Fifty-six percent of new vehicle purchasers return on average within 120 days for a customer-pay Why customer satisfaction transaction. ■■ $90,000 per month increase in customer-pay business. Tom Wood Ford, in Indianapolis, IN, has operated a loyalty program doesn’t create loyalty since 2007 as well. “From 2008 through mid-2010, my gross profit did you ever wonder why leading the industry with a 95 it’s not easy for your sales team to feedback overnight.” The controlled per month has doubled. This is a such a high proportion of percent retention rate. Shami build an executive level relationship engagement between customers and huge number…but the numbers satisfied b2b customers Khorana, president, HCL Americas with the decision makers in their top internal teams align actions and don’t lie,” says Service Manager end up leaving and moving Tom Kashman. “Customer-pay states, “Our Customer Advisory accounts. Most sales reps don’t share results to insight from the to a competitors’ product revenue is up 30 percent this year Council initiatives have significantly similar experiences with decision customers. Forget about the latest ad over last year and last year was our or service? driven our retention and growth makers and they often find it difficult campaign—get the organization best year ever!” rates within our top accounts.” By to engage in a conversation at the aligned on the priorities of the By definition, a customer BusinessWeek cited that 60 percent segmenting your B2B customers by same executive or strategic level. But, decision making customers. loyalty program offers customers of defecting customers describe revenue, it becomes pretty easy to you can leverage your own leadership rewards for purchasing from the themselves as satisfied just before figure out who the really important team to foster and up-lift the conver- Communicate company issuing the rewards. defecting. Case in point: A $1.6 billion customers are to retain. sations thatkeep your organization How often we forget that the We all know this practice best as B2B company was experiencing an connected to the decision makers in biggest cause of divorce is airline frequent flyer miles. Ideally, 85 percent customer satisfaction rate Listen, listen, listen your top accounts. Xerox has done a 7 communication—lack of it the retention influence of loyalty but still suffering from an abysmal In the B2B world, engaging marvelous job of leveraging their that is. Decision makers want to hear programs reduces or eliminates the many causes of customer defection. 68 percent retention rate. When the 2 with customers almost executive team to engage with their directly from the people they have According to Berge Ford, its CFO asked how this could be, the VP always involves a conversa- key customers and foster business connected with—and not read broad loyalty card members purchased of marketing had to find an answer— tion. Rarely do you see a situation conversations. These discussions based messaging distributed to the more than one million dollars and he did. where a sale is made, or a complaint uncover the unmet needs in these bcc all list. Who has responsibility in worth of parts and service in the As it turns out, the marketing is resolved, without a conversation. accounts, and lead to increased share your organization to communicate first year of its loyalty program. The team was not aligned with the sales The Dell Large Enterprise leadership of wallet and increased customer one-to-one with your top customers program is delivering hundreds process or the economic buyer. The team gets it. Andy Lark, chief loyalty. and your key decision makers? The of thousands of dollars in profit to rigorous Voice of the Customer survey marketing officer, Large Enterprise, customer loyalty life cycle requires Berge. program that gained insight from 250 is adamant about setting the tone enable decision makers the marketing organization to step “The gains are significant and customers per quarter had a flaw that when engaging with customers to to talk to others up and play a leadership role measurable. And best of all, the was easily uncovered. The company build relationships that last. Andy Now here is a beautiful way managing the entire communica- loyalty program is giving our customers another reason to was not getting survey results from comments, “When we open our ears, 5 to have a customer engage tion experience. One-to-one. Own it. continue to come back to us for the decision makers in the accounts seek first to understand and listen to with other customers. vehicle purchases and service,” surveyed. Rather, the users of the our customers, we are able to position Springer Science+Business Media the roi said Jim Crutcher, general manager equipment and the procurement our solutions to solve customer’s has leveraged a third party to help While most B2B companies for Berge Ford. Plus, “By more administrators were the typical indi- problems. This positions Dell ahead establish a series of “summits” see substantial increases in precisely marketing our services to viduals responding to the surveys. of product organizations that across the country, where 3-4 ! customer loyalty and reten- customers, we were able to reduce The company had neglected to attempt to point a solution at a Springer customer and tion similar to HCL’s industry leading our advertising costs by more than build relationships with the deci- problem and increases the value of industry experts sit on a panel. The numbers, an added benefit is $120,000 per year.” sion makers. The lack of relation- our portfolio with our customers.” summit’s target audiences are increasing revenue in those top the mechanism ships meant that the decision makers prospects and accounts that have not accounts. Tom Webster at Intesource is important were too busy to complete a satis- engage similar yet adopted new solutions. The implemented his decision maker To help them implement, admin- faction survey, let alone give candid customers together expert panel answers questions programs and refined them over ister and manage an effective performance feedback. When the Have you ever taken your about addressing industry several years. And, while retention loyalty program, most dealers time came for the decision maker to kids on vacation together challenges and the role Springer rates with this group (80 percent of turn to outside professionals. The renew a contract or determine which 3 and witnessed the magical plays in solving such problems. Intesource’s revenue) have grown, right solution offers the following vendor to choose for a new project, the moments when they get along so well These forums help prospects become account growth has leaped 100 advantages: company was not positioned to win. together? That’s exactly what familiar with a new product or create percent. ■■ Better customer insight & Building relationships with decision happens when you bring customers awareness in a new market, acceler- The art of developing customer marketing. The dealership gets to makers is the linchpin to customer together that face similar industry or ating the sales cycle. loyalty in the B2B world is not really know its best customers and their loyalty in the B2B World. functional challenges and dynamics. as complicated as people may make buying habits, enabling it to accu- Listed below are seven funda- When you create an environment turn insight in to it sound. A simple start is to iden- rately tailor offerings through mental best practices to success- that allows the decision makers in actions in to results tify your most important customers, highly efficient marketing. fully engage with decision makers your accounts to share experiences, This is where the marketing begin the journey to engage and ■■ Greater brand awareness and advocacy. Members are less likely and build loyalty with your B2B network and debate best practices 6 department can bring the build relationships with the deci- to shop competitors and are more customers. with you, you create a bond that elusive strategic value to the sion makers that matter most, and likely to recommend the dealer- extends beyond the time spent organization. Get the marketing and concentrate on a few programs and ship to others. focus on the few together. George Scotti of Springer product departments engaged with make them great. By starting now, you ■■ Customer base growth. Dealers Use Pareto’s Principle and Science+Business Media has created your decision maker’s ideas. Synthe- can be well on your way to achieving attract new customers by offering focus on the few. In the B2B an amazing Customer Advisory Board size all your direct market insight the success that Springer, HCL, Wells value beyond their standard prod- 1 world, the majority of program where Springer hosts their into key priorities that are action- Fargo, Xerox, Intesource and Dell are ucts and services. revenue comes from just a few top customers in discussions that able. I’m not talking about the able to deliver. ■■ Lower cost of sale to existing accounts. HCL is a $3 billion dollar address common challenges and laundry list of 56 features that need About the author: Rob Urbanowicz is customers. New customers are six company growing 26 percent market dynamics.“Our top customers to be built in to the next release—I’m a Principal with the Geehan Group, an times more expensive to acquire. annually. Amazingly, 75 percent of love our Customer Advisory Board talking about the big nuggets that organization founded on the principles of Repeat customers are the most profitable ones. HCL’s revenue is concentrated in program because we create a dialogue will propel the organization forward. advancing B2B growth through executive ■■ Improved customer relation- their top 80 accounts. If they were to driven environment to help them Jeff Tinker from Wells Fargo has been level customer engagement programs. ships. Loyal customers are more lose just one of those top accounts, it address their challenges.” engaging customers for strategic forgiving if they ever have a would require countless new insight and product development for product or service issue. accounts to make up for the revenue Leverage your team years, and says with one key project MiKe Gorun loss. But HCL focuses intently on Leverage your executive in particular that, “We were literally [email protected] these top 80 accounts building team for relationships. Face at a point in the product’s develop- roB urBanowicz relationships and consequently 4 it. In most B2B companies, ment that we were incorporating [email protected] 25, March 2011 • Usa today AN iNdepeNdeNt SUppLeMeNt by MediApLANet to USA todAy 13 paneL of experts

Heather passe david patron maya Leibman Vice President, marketing, VP of mr Program President, aadvantage loyalty & e-commerce, management american airlines carlson hotels Worldwide american express

Question 1: Loyalty programs have become an expec- Loyalty programs have been a huge Huge! most importantly, loyalty tation among travelers and have a strong game changer in the industry. Over the programs have created more meaningful What impact have loyalty influence on their buying decisions. Rather past decade, we’ve seen a spending shift interactions between airlines and customers. programs had on your than making a hotel decision on location or towards charge and credit products versus These programs continue to evolve from industry? product alone, customers are now going out cash and check. There are several reasons simple rewards, as they were 30 years ago, to of their way to maximize earnings in their for this switch, including security and engagement and recognition of most valu- favorite loyalty program. Loyalty programs convenience. However, a major factor able customers today. Airlines with a better provide many benefits to the customer, but is the appeal of loyalty programs, where understanding of their customers have a a customer’s most preferred benefit is the consumers know that everyday purchases competitive advantage through the ability to ability to earn free nights. We recognize this will lead to extraordinary travel and shop- retain repeat business. Within this competi- and have recently restructured our own ping rewards. This motivates them to tive industry, loyalty programs ensure a level program to maximize the customer’s ability select, spend and stay with their card. of consistent revenue, ultimately helping the to get to free nights faster. smart airlines survive.

Question 2: Some critics may say that these programs one of the biggest misconceptions many customers believe that the avail- simply try to buy customer’s loyalty. However, consumers have is that you need to amass ability of award tickets is very limited. What is the biggest they provide much more value than obvious a large amount of rewards points before However, we always tell customers that misconception about benefits such as points and free nights. They they can start to realize any of the benefits. the best way to successfully book award reward programs? enable brands to make customer communi- But points aren’t only for big ticket items travel is to plan ahead, be flexible and know cation and interaction personalized and rele- and trips. You can now use points for every- the program. It also helps to frequently vant. They also provide valuable segmenta- thing from gift cards to movie tickets— check award availability, as additional tion so we can identify top guests who deserve with redemption opportunities available award seats sometimes become available even more attention. Top membership levels, for relatively few points. These points can through the life of the flight depending on such as our new elite Concierge tier, offer valu- even be redeemed at point of purchase on how customer demand changes. able added benefits such as complimentary some retailer’s websites. room upgrades, continental breakfast, a 75 percent point bonus for stays, and by mid-year, special access to a global Concierge line for event tickets and top-rated restaurant reser- vations.

Question 3: Consumers should stay informed the best thing for consumers to do is to the key is familiarizing yourself with all and determine which loyalty programs best get on the loyalty program’s website and the ways to earn and redeem miles. Many How can a consumer maximize the benefits for them. There are learn all of the different features of the loyalty programs allow members to earn maximize the benefits of many websites that highlight the pros and program. Many programs offer rewards miles when making travel and everyday reward programs? cons of different travel loyalty programs in a wide variety of categories, including purchases with participating brands such as flyertalk.com or loyaltytraveler.com. travel, shopping, dining, entertainment and including airlines, hotels and retailers. DoTheMathSite.com is one that we created experiences. At the same time, there may Miles can add up fast. Also, customers where consumers can easily compare how be methods to earn bonus points that can think they’re limited to redeeming miles quickly they can earn free nights at many of rapidly increase your point “bank.” The more for just flights when they can actually the major hotel brands. We used similar anal- consumers learn, the more they can get out use miles for a variety of services such as ysis while creating our program, which has of their rewards program. car rentals and hotel stays—depending on been designed to be one of the most rewarding their loyalty program. hotel loyalty programs and will enable members to enjoy a remarkably fast way to a free night stay.

SHOP YOUR WAY TO ANYWHERE, BY EARNING With the AAdvantage eShopping mall it’s simple — earn MILES AAdvantage® miles when you shop for everyday purchases with hundreds of online brand name retailers. Or, register ALMOST your credit or debit card to earn AAdvantage miles at participating retail store locations. To earn 1,000 EVERYWHERE. AAdvantage miles, visit, visit AA.com/loyalty.

You must create an AAdvantage eShoppingSM account and opt-in to receive special offer emails from AAdvantage eShoppingSM by 4/7/2011 to earn the American Airlines AAdvantage® 1,000 mile bonus. American Airlines AAdvantage® bonus miles will post to the AAdvantage eShopping member’s AAdvantage account within 8 to 10 weeks after 4/7/2011. This offer is not valid for existing AAdvantage eShopping members. Your AAdvantage eShopping account must be open and set to receive special offer emails at the time of the awarding of bonus miles in order to receive the 1,000 bonus miles. For complete AAdvantage program details, visit www.aa.com/aadvantage. AmericanAirlines, AAdvantage and AA.com are marks of American Airlines, Inc. oneworld is a mark of the oneworld Alliance, LLC. © 2011 American Airlines, Inc. All rights reserved. 25, March 2011 • Usa today 14 AN iNdepeNdeNt SUppLeMeNt by MediApLANet to USA todAy neWs Question: What is a universal or “coalition” loyalty program? answer: It is a rewards program that allows consumers to use one loyalty card at multiple retailers, such as clothing, grocery stores and gas stations. What the rest of the

gold bond trading stamps these trading stamps were distributed to customers with their purchases and redeemed by returning them. world knows about HiStory rewarding loyalty for over seven decades loyalty reward programs

on June 8, 1938, during imagine if Shell, Kroger, Reward Program in Canada. tion offerings in Europe or Australia, the great depression, macy’s, delta air Lines, visa No less than 60 percent of German “... helps its ten a U.S. family spending the national Curtis L. Carlson founded and CvS joined together to households participate in the average on groceries, gas, credit one of the nation’s first million members form a loyalty rewards Payback program, where points can cards and other basics could earn loyalty rewards programs. program “dream team” that get money for Started on a borrowed be collected at 175 partner compa- merchandise rewards such as a new allowed consumers to accu- $55, twenty-three-year- nies. These aren’t just names in a college bills iPod in just four months and travel old Carlson registered mulate points and redeem database. Eighty percent of cards rewards like a free flight in only the gold bond Stamp on their consolidated issued by Payback are used actively and student nine months. Company in his home purchases of basics such by members in Germany. After nine loans from the Bryan Pearson, president of Loyal- town of minneapolis, mn. as gas, groceries, apparel, years of operating in Germany, tyOne, operator of the AIR MILES travel, credit card transac- Payback expanded to Poland in 2009. things they do program, said the introduction After noticing how a depart- tions and drugs—including The program attracted two million all the time; buy in the United States of a nation- ment store granted coupons purchases made with cash? participants in just two weeks time. wide coalition loyalty program for purchases that could be When FlyBuys launched in groceries, shop consisting of some combination of redeemed for money or prizes, This kind of universal or “coali- Australia in 1994, the only rewards gas, grocery, credit card, travel and Carlson had a simple, yet online and fill tion” loyalty program is avail- were flights. Now there are over department store sponsors is not powerful, discovery: reward able and highly popular in many eight million individual FlyBuys their gas tanks.” a matter of “if,” but simply a ques- customers based on what they buy. Within a year, 40 grocery other countries around the world, card holders in five million Austra- tion of “when.” Consumers who stores were using ‘Gold Bond including neighboring Canada, but lian households. Members can want to stretch their hard-earned Stamps,’ which were distrib- not in the United States. The U.S. collect points at FlyBuys partici- possible in coalition loyalty when dollars desire the opportunity to uted to customers at purchase market is dominated instead by pating businesses to make their it featured a panel discussion titled earn rewards on their everyday and redeemed with Carlson. what’s known in the industry as the everyday shopping count for over “Coalition Loyalty from Around the purchases, he said. In 1953 the largest grocery single-operator loyalty program. 1,000 reward choices. Globe” at a major conference in San Newton, Mass.-based Upromise is chain in the country, Super According to an article in destina- Canada’s AIR MILES Rewards Diego. an example, in the education niche, Valu Stores, Inc., embraced tionCRM.com, Finaccord, a British Program dates back to 1992 and The experts panel consisted of of the power the coalition model. Carlson’s idea and began market research firm, estimates the stands as the benchmark interna- executives from leading coalition Upromise helps its ten million rewarding its customers with current total number of member- tionally for the operators of coali- loyalty programs. They agreed that members get money for college bills Gold Bond Stamps. Along ships in coalition loyalty programs tion loyalty programs. AIR Miles the coalition model is popular with and student loans from the things with this expansion came the ability for customers to at 974.7 million globally. Finaccord counts participants from two- consumers because it allows them they do all the time; buy groceries, redeem the trading stamps for Director Alan Leach expects the thirds of Canadian households. The to leverage their everyday spending shop online and fill their gas tanks. prizes. By the end of the 1950’s, number to top one billion by year’s program gives back $500 million in high-frequency categories to Its partners include 700 online the company had created an end. annually in value to Canadian attain rewards that can’t be earned stores, 8,500 restaurants, 21,000 international presence. By Some of the world’s best-known consumers who collect miles and as easily in U.S.-style sole-propri- grocery and drug stores, and many the 1960’s, nineteen of the coalition loyalty programs include redeem rewards. etor programs. other companies. top twenty American grocery Payback in Germany, FlyBuys The U.S. Direct Marketing Associ- For example, given access to a store chains and 50 percent of Australia and the AIR MILES ation provided a glimpse of what’s program comparable to the coali- [email protected] gas stations offered stamps to their customers. The company soon began exploring new ventures, expanding into the hospitality industry with the acqui- the future of credit sition of the Radisson Hotel in downtown Minneapolis in 1962. Less than one decade later, the company changed and debit card rewards its name from the Gold Bond Stamp Company to Carlson it’s one of the most frequent simply required to play in the space. Companies. In 2006, the name financial questions posed Regions Bank is the latest finan- changed to Carlson to demon- now that the economy is cial institution to make a defen- strate that it was one company seeing the other side of the sive move in a rewards program serving a variety of needs. great recession: “what is Today, Carlson remains a in the face of the likely Federal family-owned, privately held, the future of credit and debit Reserve limits on interchange global leader in hospitality card reward programs?” fees. Regions will no longer accept and travel. Carlson encom- enrollment into its Relationship passes more than 1,070 hotels, Several factors are converging to Rewards program, a progressive including Radisson , Country prompt this question. Customers and comprehensive program for Inns & Suites By Carlson, Park remain stressed economically due customer engagement that places Inn and Park Plaza; more than to the recession, while government value, as the name indicates, on 900 T.G.I. Friday’s restaurants; regulation—such as regulations the total relationship with the and holds a majority stake in on fees that credit card companies customer. Carlson Wagonlit Travel (CWT). charge retailers—is increasing. Carlson operates in more than opportunity for growth 150 countries and its brands With the mortgage and foreclo- employ approximately 150,000 sure crisis still in full swing and Even in this challenging environ- people worldwide. consumers cutting up credit cards ment, expanding the loyalty Over seven decades after in favor of cash, banks are strug- program can offer banks tremen- a young entrepreneur regis- gling to negotiate success as they dous opportunity for growth. By tered the Gold Bond Stamp work to rebuild their reputations just tweaking a bank’s current Company, Carlson is still and relationships with customers position in a few crucial ways, focused on providing extraor- in the economic recovery period. the bank’s loyalty efforts can go dinary rewards. On March 31, rewarding CuStomerS. it’s not just about bringing in new customers, but Consider that from 2009 to beyond commoditized rewards and also about ensuring that the customers who stay and continue to do business 2011, Carlson will launch its photo: istockphoto.com 2011, growth in loyalty program be leveraged to attract customers are rewarded. new hotel loyalty program, memberships among the financial and drive positive behavior. data that banks already gather to design and rewards most relevant Club Carlson, with an enriched array of redemption oppor- sector rose a negligible 1.6 percent, For instance, it’s essential for improve customer engagement, to their needs. As with previous tunities including new vaca- according to the 2011 COLLOQUY banks to use data to understand, financial services companies can initiatives such as Garanti’s Flexi- tion options with Club Med Loyalty Census, compared with 77 recognize and reward the customer score a huge win with the patrons Card or CapitalOne’s CardLab, and CWT Vacations as well percent from 2007 to 2009 in COLLO- across products, no matter how they serve. Discover is providing customers as enhanced benefits for its QUY’s prior 2009 study. The cause is they interact. It’s not just about Banks simply need a new atti- with a flexible way to manage their members worldwide. twofold: Banks have pulled back on bringing in new customers, but tude that uses the power of the finances and customize the card credit card and reward card applica- also about ensuring that the right rewards to drive desired they carry. This is but one way to Max Friend tions, while consumers have consol- customers who stay and continue results among existing customers. change the tone of the dialogue [email protected] idated the number of credit cards to do business are rewarded. In fact, some banks have seized about credit card practices and they carry and how much they are The bottom line is that banks on the opportunity to go on the place more emphasis on issues that spending on them. can use whatever loyalty program offensive. Consider Discover as are a high priority for consumers— Because banks are under pres- they have to drive value across one example. This time last year, such as transparency and control. sure, cutting the costs of rewards the board—rather than consid- Discover introduced CardBuilder, is top of mind as some banks treat ering rewards an add-on that must an online tool allowing customers coLLoQuy loyalty programs as costly burdens be cut out in lean times. By using to design a card with the terms, [email protected] 25, March 2011 • Usa today AN iNdepeNdeNt SUppLeMeNt by MediApLANet to USA todAy 15

Know. How.

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Our know-how makes us diﬀ erent. As world leaders in loyalty marketing, we use our unmatched experience, data, and analytics to develop unique insights about your customers. Knowing how, when, and why they buy, we create innovative solutions that deliver powerful results. We’re here to drive customer loyalty and help your company grow.

STAY. LOYAL. STRENGTH. IN NUMBERS.

As the leaders in loyalty, we know the key to Epsilon is the industry’s leading marketing building your business is understanding how to services ﬁ rm with a broad array of data-driven, proﬁ tably change customer behavior. We analyze multi-channel marketing solutions that turn your customers’ actions and develop strategies loyalty strategies into high performance loyalty tailored to the individual needs of your business. programs. We set the standard for loyalty LoyaltyOne has unmatched capabilities in program platform design and development, powered strategy & design, coalition loyalty programs, by real-time, multi-channel execution—all insight & analytics and relationship marketing. complemented by agency and analytic services. www.loyalty.com www.epsilon.com

Visit us online to see how Start. Now. our know-how can help you.

Alliance Data and its combined businesses is the largest and most comprehensive provider of transaction-based, data-driven marketing and loyalty solutions. Alliance Data is a leading provider of marketing-driven credit solutions and is the parent company of Epsilon® and LoyaltyOne®. Visit our website at www.AllianceData.com.

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Alliance Data REV 10284-11_USA Today_R4.indd 1 Client Signature: 3/11/11 2:39 PM 10284-11_USA Today_R4 Date: March 11, 2011 2:37 PM 4 10.5” x 20.75” Format: InddCS4 cmy k spot 1 spot 1 Concept Copy/Layout Final Art A FASTER WAY TO AFREE NIGHT AT OVER 1000 CARLSON HOTELS WORLDWIDE.

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