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Research Shows How Retail Brand Loyalty Programs Are Failing with Consumers

Retail brand loyalty programs are created to accomplish a primary goal — to encourage repeat purchases that evolve into brand loyalty. Unfortunately, research from ACI Worldwide reports that retail brand loyalty programs have a long way to go before they reach that goal.

According to the research survey, 62% of U.S. consumers join retail brand loyalty programs to get discounts but only 36% have received a reward or promotion from the program that actually made them come back to the retailer’s store again. One reason might be the fact that, according to the survey results, 81% of retail brand loyalty program members don’t understand the benefits they’re supposed to get from the program or how the program works at all.

Following are some highlights from the survey results reported by ACI Worldwide this week:

  • 3 out of 4 American consumers are members of at least one retail brand loyalty program.
  • 1 out of 4 U.S. retail brand loyalty program members have received a reward or promotion for something they didn’t want and wouldn’t buy.
  • 1 out of 5 U.S. retail brand loyalty program members have received a reward that was too small to take seriously.
  • 3 out of 4 U.S. retail brand loyalty program members have never received a reward or promotion that made them feel like a valued customer.
  • Nearly 9 out of 10 U.S. retail brand loyalty program members signed up and never heard from the program again.
  • Nearly 1 out of 2 U.S. retail brand loyalty program members have had a negative experience from a loyalty program.

For your brand’s loyalty program to be successful and actually turn customers into brand loyalists, you need to offer a program that’s simple and easy to understand with clear benefits that are specifically targeted to members. The statistics above demonstrate many of the biggest mistakes that companies make when developing loyalty programs. A loyalty program should make consumers proud to be a customer, not annoyed. If members don’t understand how to access rewards and if rewards are useless to them, then your loyalty program is likely to do more harm than good.

In other words, your brand loyalty program needs to sound good so consumers will join, but it also needs to deliver on consumer expectations based on the messaging that convinced them to join. Don’t make them regret joining. Instead, make sure they’re thrilled with your brand loyalty program so they come back again and again — and tell all their friends!

Image: stock.xchng

Three tips to develop CSR Redwood

Once in a while you come across a company name which is just sooooo apposite for their business you find it hard to believe some kind of legal name change hasn’t been involved.

The best example of this I’ve ever come across dates back to my early childhood and travelling into Oxford on the Park & Ride.  As the double decker rattled its way along the Abingdon Road we passed by a funeral directors, called Reeves and Pain.  I kid you not, and so far as I know the company is still going to this day.

You may have already come across an interesting little video from The Big Think project entitled “Companies Can’t Be Parasites Anymore”; it was released last month but I’ve only just watched it.

The video is of a brief interview with Stephen Miles, VC of Heidrick and Struggles, one of the oldest executive consulting firms in the US.  A video with that title from a company called “Struggles” .. I’m sorry, it somehow seems apposite once again.

All that aside though, the video is well worth watching.  It’s only three minutes long and in a quiet yet forceful way Stephen Miles outlines exactly the changes needed in corporate culture post-financial crisis. [Read more…] about Three tips to develop CSR Redwood

What Makes for Effective Investor Relations Sites? Part 41: Dealing With Shareholders’ Frequently Asked Questions

In the old days, before the internet, investor relations departments operated with the telephone and paper based communications. (You remember getting letters with stamps on them, don’t you?)

If you were a large corporation with a significant shareholder base, this meant that at certain times during the year, the volume of phone calls and letters would spike. Usually these increases would be around the issuance of dividend checks (When are they coming? Why haven’t I received mine? How do I replace a lost check?), and the annual general meeting (When is it? Where is it? Can my Aunt Sophie come too?), but certain other types of calls would occur with great regularity as well.

Around tax time, for example, many calls would come in trying to find out how much the shareholder had received in dividends over the past year as they had mislaid the tax reporting form mailed to them in January. Or the shareholder needed to figure out the tax cost basis of the stock they sold in the prior year. Or they had lost their stock certificate. The list goes on, but I will spare you.

The resulting quantity of calls and letters meant that the investor relations staff was stretched, response times slowed down and shareholders were not given the prompt attention they would normally receive. Authorizing more payroll to fix the problem was not considered a good fix as companies do not staff to meet peak demands. So we muddled through and breathed a sigh of relief when things calmed down.

Fortunately, the advent of company investor websites means that it is now possible to allow shareholders to look up much of this information for themselves. Further, they can do this whenever they want to, as opposed to being forced to call during business hours. Well designed Frequently Asked Questions sections (FAQs) can be very helpful in getting information to shareholders before they get frustrated. Set out below is a nice example of a FAQ section by Kingfisher, the home improvement retailer. They appear to have looked at their incoming questions from shareholders and attempted to design a page that answered many of them. It is a good example of using the web to help shareholders help themselves if they want to, but you will also note that at the very top of the page, shareholders are given a link to company contact information.

A lot of heartburn by both shareholders and investor relations departments can be avoided by following this example.

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Heinz Launches Creative Facebook Promotion in U.K.

You might not expect a brand like Heinz to launch an innovative social media marketing promotion, but that’s exactly what happened in the U.K. when Heinz started selling limited edition ketchup from its Facebook page. Check out the image from the Heinz Facebook page below.

In an effort to boost the Heinz Tomato Ketchup UK Facebook page audience, the company released a limited edition Balsamic Vinegar ketchup product. Only 1,057,000 bottles of the limited edition product were produced, and according to Ad Age, 57 of those bottles were sent in advance of the promotion to key bloggers and VIPs. This was a smart move since connecting with online influencers in an effort to convince them to talk about your brand is a critical first step to social media marketing success. The next 3,000 bottles were offered for sale through the Heinz Tomato Ketchup UK Facebook page to the first 3,000 new people who “liked” the page. Facebook users could buy the bottles directly through the Facebook page using a built in payment system and a credit card.

In less than a week, the Heinz Facebook page rose from 45,000 likes to 58,896 at the time of this post’s writing. That’s a 30.88% change and the conversations happening on the Heinz Facebook page by people who are receiving their bottles of the limited edition ketchup are very positive.

Of course, the promotion didn’t go off without some glitches — primarily because the response was a lot bigger than Heinz anticipated. The Facebook page and ordering process were slow and didn’t always work as well as they should have, but overall, the promotion appears to have been a success for Heinz.

People are publishing on the Heinz Facebook page about how much they love the new ketchup flavor. They’re taking pictures of their bottles (including the packaging and accompanying note) as well as of themselves holding their new Heinz ketchup bottles and publishing those on the Heinz Facebook page, too. That means their comments and photos are being seen by a lot of people, which gives Heinz a significant amount of positive online buzz.

In simplest terms, this is a promotion that got people talking and undoubtedly provided Heinz with excellent information to use when developing future social media marketing initiatives.  For consumers, this promotion was interesting, easy to participate in (despite the order processing glitches), and fun. It’s not surprising that it was successful.

What do you think? Were you one of the 3,000 people who got a bottle of the limited edition Heinz Balsamic Vinegar Ketchup? Leave a comment and share your thoughts about this creative Facebook promotion.

When Conversation Becomes a Concern

How much responsibility should you take for your website visitors?

Clearly, when they visit your site, you’re responsible for their experience. You want them to take certain actions as a result of their visit, so the website needs to make this easy and desirable for them, whatever that action is.

But increasingly, as websites – even corporate websites – become more social, and as companies become more involved in social media activity across the web, then visitors may well reveal something of themselves in ‘conversation’. And what they say may be something that causes you concern…

I’m not talking about data protection, because obviously you take good care of that as part of your processes.

I don’t mean corporate social responsibility in the classic sense, either, which refers to how the company takes responsibility for its impact on the context in which it works (marketplace, employees, community, environment).

No, here I mean information revealed to you as part of the social interaction that your company has taken on, shared with your employees by individuals.

Often we get comments from people who believe that we represent the brands we discuss. If we have a post about a make of car, for instance, or a food-manufacturer, people respond as though we were that company. They pass on details of their complaint and ask what we’re going to do about it.

That’s easy enough: I find the customer service contact details for that company and pass them on – and I delete any personal contact information they’ve shared publicly. This is a simple misunderstanding of the nature of our site, and perhaps of the public nature of blog comments.

Then, this week we had an unusual email, asking how to find a former lover who works for a company we mentioned. At first, I assumed it was spam, though I couldn’t see where the gain for the spammer was. But when I investigated, the email came from an apparently genuine email address from a professional company.

I’ve done nothing. How can I help, after all? And it isn’t a serious problem (I hope). Or perhaps I would make it worse…

But it made me wonder about companies who are very active in the social space, having conversations with individuals.

Banks, for instance, very clearly and very frequently, warn people in their Twitter stream not to reveal any of their personal banking details.

What about companies in other markets? What if, for instance, you are using social marketing to promote tampons to young girls, or baby milk to first-time mothers – or any product to potentially vulnerable people – and a visitor to some part of your web estate reveals something about their circumstances that causes you concern for their health or wellbeing, or that of their family? Given your privacy policy, is it permissible to try to get them help?

Google puts up a phone number for the Samaritans if you search for various keywords likely to indicate that you are suicidal; some social media sites have panic buttons for people who believe they are threatened in some way. What should corporate community managers do if they are worried about a member of their community?

I don’t have an answer, other than to ask whether companies have a duty of care that extends beyond the use of their products, and whether companies should have a policy for how to handle such an issue – if at all.

What do you think?

Product Placements Launch on British Television

A new door has opened for advertisers in Britain since a ban on product placement in television programming has been lifted. However, making it possible for companies to get brand exposure through in-programming television product placement doesn’t mean those companies will be able to start stuffing products into every program on air.

In an effort to keep British programming from turning into U.S. versions of American Idol and Survivor, which are filled with product placements, there are some restrictions for advertisers who want to see their brands in British television programs.

First, the largest network in Britain, the BBC, is still off limits for product placements despite the lift on the ban. Second, some large advertisers like alcohol brands and junk food brands are still not allowed to participate in product placement per The New York Times. Third, several types of programs are not allowed to participate in product placement despite the lifting of the ban. These programs include news shows, children’s programs, and more.

But that’s not all of the restrictions. Paid product placements are not allowed to take center stage in any program, nor can they be part of the program’s plot or script. Furthermore, any program that includes paid product placements must display a small P in the corner of the screen at the beginning and end of the program as well as before and after commercial breaks.

The question is whether this is just the first step in paid product placements in British television or if the restrictions will remain in place for years to come. In time, will British television viewers come to expect product placements and become immune to them as American television viewers have?

In the U.S., unless a show is overflowing with blatant product placements (e.g., when contestants on Survivor won a Doritos and Mountain Dew feast after a reward challenge), these paid placements typically don’t draw much concern (or attention). It could be argued that U.S. television viewers have become immune to them. Will the same happen to the British audience (who already sees product placements in U.S. programs shown in Britain)?

What do you think? Leave a comment and share your opinion.

Image: stock.xchng