Tessa Burg | Technologist

Product development and marketing strategist responding to innovation in loyalty, payments, customer relationship management and search.

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Do you market a loyalty program ?

Do you market a loyalty program...that's a great question.  Short answer -yes.  The most effective place to start marketing your loyalty program is in-store and on your website.  Loyalty rewards for retailers, yogurt shops, pizza - businesses with a traditional storefront have an awesome opportunity to engage customers and demonstrate their brand value starting the moment customers walk in the door. Train cashiers to learn names, ask every customer "are you a member of our loyalty program," merchandise the benefit and reward of the loyalty program alongside products and incentive customers to tell their family and friends.  You can use similar concepts online.  Loyalty is all about building meaningful relationships with your current customers that fuel word-of-mouth.  So, make sure loyal customers know they're special and allow them to send copies of rewards to friends/family and incent them to purchase gift cards or eGifts.  Here is a blog post I just did around the importance of gift cards at the holidays.  I hope that helps!

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Top 4 Differences Between Loyalty & Marketing

There are many branches of marketing, but for this conversation we're going to contrast direct marketing, brand marketing and loyalty marketing.  Direct marketing is often defined as the art of promoting, communicating the benefits and ultimately selling a product.  Direct marketers are experts around what motivates a customer to take an action.  They are incredibly data driven, striving for the most targeted means of communication possible.

Brand marketers are more about the relationship with their customers.  They want to understand customer's needs, create persona's of what the customer looks like and clearly communicate the brand's values.

Loyalty marketing is in between.  It's just as data driven and results oriented as direct marketing, but the approach is closer to brand marketing.

Top 4 Differences Between Loyalty & Marketing 

1) Loyalty Marketing Starts with Existing Customers:  Loyalty marketing starts with taking a look at your existing customers as opposed to direct marketing which is looking at your potential customers.  Loyalty marketing analyzes shopping behavior and let's it tell the story about what the customer values.  This data can then be used to create a loyalty program that equally reflects the brand and customers' values.

2) Loyalty Marketing Drives Word-of-Mouth: When people feel like the brand reflects themselves and they're rewarded directly for their engagement with the brand, yes, they will tell their friends and family.  Social Media or social marketing tactics have begun to reward people for sharing on Facebook or Twitter, but loyalty marketing is less about broadcast.  Loyalty marketing happens friend-to-friend, primarily via face-to-face, e-mail and the giving of gift cards.  People who receive a personal recommendation from a friend are 60% more likely to try that brand or product.

3) Loyalty Marketing is Iterative:  Direct marketers use A/B (sometimes C, D, E) testing to measure the effectiveness of their creative and messaging.  They marketing campaign they did last year, could be completely different from the campaign that rolls out this year.  If traffic is slow, direct marketers can create an e-mail campaign or direct mail campaign sometimes on the fly to increase foot traffic.  Loyalty marketing is about building a foundation based on your current customer data, then enhancing with additional rewards, exclusive offers and communication over time.

4) Loyalty Marketing is Consistent:  You want your loyalty program and experience to be consistent. Customers know what to expect when they shop on your website, in your store, in their home state or while traveling.  Your loyalty program should enhance the in-store experience, specifically at the point-of-sale where your brand has given the opportunity to reward your customers' shopping loyalty.  However, that doesn't mean you shouldn't improve over time.  Just make sure you're using controlled populations and continually listening to the data.

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Top 10 Must Dos for a Loyalty Program

Sorry Chief Marketer, your Top 10 Must Dos for a Loyalty Program was weak. so I created my own.

10) Give your loyalty program an online presence: I see a lot of small businesses with only Facebook pages.  Social media is important and it's a great tool for engaging with your customers; however, it's still not everyone's go to mechanism for researching products and services.  Create a simple WordPress or Tumblr site and start loading it with content about your products, FAQ's, tips, special events, how you got started, results from polls you hosted on your Facebook page - the variety of content is endless.  And, oh yeah, talk about the perks of being a loyal customer.

9) Learn your loyalty customers names:  In brick-and-mortar businesses, this goes a long way. [Insert shameless plug] It was really important to us when building Paycloud Business, our loyalty solution, that the customer's name was the first thing the cashier would see when a customer walks in.  

Ecommerce shops should retweet, respond to e-mail and Facebook posts and thank and reward customers, by name with @, when they share a product review or endorse your brand online.

8) Your loyalty program should REWARD your customers:  If your customers can't describe the benefit of your program in one sentence, then you're not truly rewarding them. If your program is memorable then you'll be more top-of-mind and drive increased shopping frequency and word-of-mouth.

7) Reward customers instantly when they enroll: Immediately demonstrate the type of exclusive perks your loyalty customers will enjoy.

6) Let your customers see the carrot: MindHacks.com recently highlighted a study from the Journal of Marketing Research that found people increase their shopping frequency the closer they get to the goal.  Make your reward achievable, let your customers see their progress and you'll start seeing your customers more.

5) Give your loyalty program time to run: Loyalty program success hinges on driving repeat purchases and increasing average tickets.  If you're like most businesses, you may have a an average shopper frequency of 1x per month - that means you won't even be able to measure the percent of your member base that returns for at least 4 weeks.  And then, you may only get 2 - 5% to purchase on that next visit to start.  Loyalty is about building a relationship.  Give your data (and your loyalty program) at least 6 months to reach significance before you determine its success.  During this 6 month period, collect e-mail addresses, give customers with the highest rate of increased frequency additional perks and send e-mails with special bring-a-friend or reward-for-referral to fuel word-of-mouth and new enrollments.

4) Apply the data:  There are some benchmarks you can use in the beginning.  If you're not seeing at least 3 - 5% of your enrolled loyalty members returning every month by month 4, then you may want to consider making your reward more enticing or shorten the number of visits required to reach the reward.  And listen to your customers - maybe once a month you have a different special reward for loyalty members, chosen by loyalty members.  Send an e-mail and ask people to select 1 of the 4 rewards you've selected by voting on Facebook or tweeting their response.  This will increase your e-mail engagement and social visibility, gives them something to pass along to friends and keep your loyalty program top-of-mind.   

3) Have a strategy:  Everyone's objective is to increase revenue, but there are a million and one ways do that.  If you want to increase frequency, then keep your program fresh and continually engage customers (engage - not bombard) to stay top-of-mind.  If you want new customers, reward for bringing a friend, create easily passable offers and content, like videos, recipe or tip cards - show your potential customers how they'll benefit from your product.  If you want to increase average ticket, then be spontaneous with sampling with your loyal customers - "Jennifer, we're launching a new drink, do you want to try it and tell us what you think?"  If you start with a focused strategy, collect the data, then it's easier to see what's working and what's not.

2) Make the point-of-sale experience great:  The purpose of loyalty is to reward and build a relationship with your existing customers.  There isn't a better place or more valuable real-estate to enroll these best customers than at the POS.  CPG companies clamor for end-cap and in-check-out aisle spots to capture that impulse buy.  Take advantage of that space as the retailer to first, thank your customer, then tell them 1) What they get instantly for enrolling and 2) The reward (the carrot) they'll be earning towards with each visit.  Build your member base quickly. 

1) Keep it simple:  If you can't describe your loyalty program in one sentence, it's too complicated. Your loyalty program is reflection of your brand and what your customers value - it's all about the relationship. You may be tempted to pick-and-chose different elements that you like in competitors' programs.  The downside is that you don't have their data, so you don't know if it's working.  Start with a simple program where customers earn toward a reward.  Insert some surprises along the way that truly reflect your brand personality and what customers want.  Then measure the response, keep an eye on your benchmarks and build from there.

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Wrong or right, something has to change at Facebook

If you haven't heard, Facebook's IPO didn't go well and now Zuckerburg has lost $10 billion in value, making his share worth $9.5 billion.  And now he's is under a lot of pressure to cede his position as CEO.   

DO IT!  And who gives a flop.  An experienced CEO would face this situation with utmost seriousness, getting on the phones, on a stage, in a boardroom in a fitted suite announcing a plan to turn this ship around.  Zuckerburg isn't that guy - he can't be.  He doesn't have the experience nor the track record people can believe in.  I'm sure Mark hears "you're too young" a few times and he has to accept that, yes it's true, and comes with the natural limitation of you-just-haven't-lived-longed-enough-to-really-know.

The best thing for Facebook's stock and future is to announce, Zuckerburg, the man who fundementally changed online communication, is going to be focusing solely on product strategy.  We brought in [insert the name of someone who know how to make money] to be our Chief Marketing Officer and [insert name of turn-around CEO] to be our CEO.  

Mark may be CEO someday, but for now he has to know what he doesn't know - what he can't know - and focus on the genius and creativity that built Facebook.  Personally, I'm optimistic and kind of excited.

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Alex Rampell of TechCrunch describes the revolution happening in the payments space as a result of Square, PayPal and others decreasing merchant fees.  The new revenue opportunity for payment companies is monetizing consumer shopping data.

I agree that leveraging data for richer shopper analytics and closing the loop from product discovery to purchase is a huge.  However, the biggest challenge will not be building these systems, it will be executing in a way that benefits consumers, not just retailers.

Facebook is in the midst of a class action lawsuit after using Facebookers' pictures in ads for brands they "liked."  On paper, leveraging a customer's stated preference for the purpose of marketing to his/her network of friends sounds perfect.  But Facebookers were creeped-out and felt Facebook abused its relationship and access.  Marketing tennis lessons to someone who just bought a tennis racquet sounds great, but can be a major fail if the execution is a complete consumer turn-off.

Poor execution will damage brand image, casting shadows of mistrust and creepiness on retailers that abuse their relationship with their customers.

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Will Soccer Ever Be Big in the United States?

I'm a soccer fanatic, so my father-in-law knew this article would make my heart hurt.  Tim Holland, the author, outlines some key reasons why soccer won't ever break the "stronghold" of football, basketball and baseball.  One reason, he states, is the lack of a homegrown star winning the World Cup - not just having a good run.  In my eyes, Landon Donovan and Abby Wambach are homegrown stars and champions, but soccer is more than the United States and definitely more than the World Cup.  I love and watch it for the talents of Lionel Messi (Argentina, Barcelona FC), Cesc Fabregas (Spain, Arsenal) and Luka Modric (Croatia, Tottenham) in their Champions League games, country games, Premiere League games and the Olympics.

While I worry if soccer will ever be big, I like my husband's response "who cares." 

"Soccer has a fan base. It's not to the level of football and the other sports but it is still somewhat new to television audiences. I wouldn't watch it if they changed the rules so that is not the issue. Now may be the time for soccer to shine as the greedy, drug-induced, crime-addicts of football, basketball and baseball are drive those sports into the ground. The author is right about one thing -  there is a need for better youth development programs to last through high school and into college.

I could care less if people like soccer or not. I enjoy playing it, watching it and having a fantasy league built around it. If other people don't like it, who cares; they're missing out in my eyes." -Adam  A. Burg

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Mobile Payments, What Will it Take?

Mobile payment growth hasn't blown anyone away for a few key reasons, according to a recent study by Gartner Group, reported by Clickz here:

1) Service providers haven't adapted strategies to local requirements

2) NFC (near-field communication), the primary technology for facilitating mobile payments, is proving more complex than expected.

3) Consumers are just not warming up to it.

Sandy Shen, from the Gartner Group, predicts that mass market adoption of NFC is four years away, citing the biggest hurdle for mobile payment is "convincing consumers."

So, what does this mean for American Express, Google (who recently acquired Punched), Apple, PayPal, Cimbal, Sparkbase, Dwolla - all looking to make mobile payments the preferred way to pay?

First, I would like to question that consumer leeriness is the hang-up. My guess - people just don't know about mobile wallets.

As evidence that awareness is the problem, I went to the Apple Store to gauge quantity and response for mobile wallet applications.

Cimbal:  Free, Released August 11, 2010.  Approaching it's one-year anniversary it has a whopping 2 reviews, on of which is clearly from an employee.

PayPal: 4.99, Released June 30, 2011. It has 199 ratings, with 95 of them giving it 1 star.  Still the volume of ratings shows that people were aware the application was available.  Two negative reviews cited errors with the "Virtual Terminal," which is specifically for small businesses.

Punchd: Free, Released Feb. 17, 2011.  6 ratings, 4 are positive.  Loyalty punch cards on your phone - I like their style and voice.  Very conversational, but not a lot of awareness on the App Store.

Dwolla: Free, Released July 5, 2011.  23 ratings with 16 5 stars.  Pretty impressive.  I also noted that the suggested apps were also pretty high-brow including Square (another mobile payments acceptance app for small businesses), Bloomberg and Pageonce.  

Sparkbase: Currently Available in Chicago, IL. No ratings.

Then, I downloaded Starbucks' mobile pay app.  Free, 86 ratings, 59 of which were 5 stars.  So, the most successful mobile payment option came from a retailer as opposed to cross-retail application.  I don't think this means cross-retail apps are doomed, but I do think it points to what apps have to do to be successful.  Mobile wallet apps need to make themselves an easy option at the point-of-sale.  This means building meaningful relationships with their retailers that motivates them to get the word out about mobile payments and loyalty programs in-store.

The two mobile wallet applications that had some response, PayPal and Dwolla, both also showed signs that downloads, or at least vocal downloaders, came from small businesses, not consumers.

Consumers are the key.  Who ever makes it a known, easy-to-use option for consumers, will earn the most market share in the mobile payment and loyalty space.

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Google+, My First 5 Minutes

As I suspected, finding friends and friends finding me wasn't an issue.  I have gmail, which probably made it easier.  

I dove into adding friends to circles.  I'm incredibly excited about the circle idea, but it remains to be seen if I'll actually use it.  I'm an open treasurer chest. 

Right now, Google+ seems to be leaning more "professional" for me.  This is self-fulfilling and results from my awareness of how Google, specifically Caffeine and real-time results, works.  I know that the content I put into Google+ will be indexed by Google.  Google no longer has to depend on an agreement with Twitter or anyone else to power real-time results - it's all on their platform now. If someone is searching for me, it's most likely in a professional capacity, so, I'll most likely intentionally keep my conversations more professional (aka, avoid cursing).

I found it interesting that the colleagues I most often look forward to following on Twitter, have all been mysteriously quiet today.  Then, the moment I hit the Google+ stream, I found them conversing away.  So, the activity level appears to be high right now, but, Bridget Stewart, made an excellent observation as to why this may not sustain: "Ok... Here's the thing. Twitter is able to be a bigger part of my life because I have a desktop app for it. If Google+ gets that, or better yet a social app incorporates both so I can watch streams from it, I would be more likely to be active in Google+. Just sayin'."  She's an awesome slice of pizza.

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A new Google Chrome extension makes extracting Facebook contacts a lot easier, helping users more easily reconstruct their respective social graphs on Google+. UPDATE: Facebook has blocked this tool.

I don't think this will be a deal breaker for Google+.  It's e-mail client has a large base and, even for users who have to "start from scratch" won't have to wait long to be found by their friends.

I am excited to see this battle play out, even more so in light of Facebook's addition of e-mail!

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Can Social Media Sell Books - Today?

I 100% agree that social media starts with a relationship, but, as pointed out by Jane, it takes time to build relationships.  How can you start using social media today to sell books and make it worth your time?

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Recently some friends asked me if I had any recommendations for Barcelona.  Do I ever!

First, schedule doing a food tour and cooking class as early on in your trip as possible.  These two things, Camp Nou + La Sagradia were the highlights of our trip.

Food tour - Jo and Joe are awesome.  They are American transplants who have been living in Barcelona for 7 years.  Make sure you ask about their story, worms and professions outside of doing tours.  They are fascinating.http://thebarcelonataste.com/

Cooking Class - Our teacher was awesome and everyone in the class was extremely social.  Not only do you learn recipes, but customs that will definitely come in handy during your stay.http://www.cookandtaste.net

La Sagradia Familia-Buy tickets before you leave if possible.  The line can be insane.  This is a must see site - we did the audio tour and probably spent about 4 hours there - that's probably on the extreme side but I would say 2 hours is normal.

If you like hiking, definitely go to Montserrat.  Do not do a tour, just take the rail train up there and leave yourself plenty of time to hike - like a half day.  The views are incredible, the hiking is amazing.

Last, the beach is awesome and all the food in Barceloneta is amazing.  The closer you can get to the big steal fish, the better.  The beach closest to the port is very active - keep walking to find a good spot that's a bit quieter.

If you have time, get the Art Pass - it allows you to get into all the art museums without waiting in line and for a discount.  We only had time to go to 3 and it was still worth it (there are 6 or 7 in total).  I can't remember the name of my favorite museum - it was the one that was local - the CCCB, I think - super awesome.

La Boqueria for breakfast is the best time to go - the earlier the better.  Get a tortilla (which is like a huge omelette) or if you're brave, there are a lot of seafood specials.  

The food everywhere is incredible Jo and Joe can give you recommendations and you'll visit some places in Barri Gotic that you'll for sure want to return to on the tour.  If you haven't made hotel reservations yet, I would recommend staying in Barri Gotic - it was my favorite neighborhood.  We stayed in Las Ramblas and that was just too commercial (but fine).  My favorite fancy dinner was at PLA and our favorite traditional dinner was Cerveceria Catalana, at the corner of C Mallorca and La Rambla de Catalunya.

We love soccer so we of course took a tour of Camp Nou.

We loved using the rapid to get around.  Including up to the neighborhood of Gracia, which is an awesome place to eat and just relax.  We also used it to go to La Sagradia Familia, Parc Guell and other spots you can see from a tour bus. We essentially took a tour, never got off the bus, then used the rapid to return to the sites we wanted to see closer.

I hope this helps!  Have fun.