Highlights From My Latest Report On Loyalty Marketing

Luca Paderni

We have just published my new report on loyalty marketing: "A New Approach To Brand Loyalty."

From the interviews with more than 50 marketing leaders, we have learned that more than 40% of chief marketing officers (CMOs) admit that their brand loyalty programs underperform or produce erratic results, or they simply do not know how the programs are performing. The survey also shows that for most CMOs, loyalty marketing is often seen as a means to an end, not a strategy, and that their approach, while necessary, has unclear objectives and focuses too much on short-term financial goals.

Other key findings from the report:

  • Marketers are primarily focused on customer acquisition (65%), increased brand awareness (40%), and marketing return on investment (39%), as opposed to initiatives addressing customer loyalty, such as increasing customer retention (31%) and customer lifetime value.
  • The majority of respondents indicate that customer retention (79%) and revenue growth (53%) are the key metrics used by senior management to evaluate loyalty marketing initiatives, as opposed to Net Promoter Score (24%) and customer satisfaction (24%).  
  • Lack of differentiation (91%) and promotional clutter (73%) are seen as the main reasons why loyalty initiatives are often not delivering the goods. For more than half of the respondents, loyalty marketing initiatives are not aligned with the brand they are promoting.
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How To Create Real Value Through Branded Mobile Experiences

Kerry Bodine

We use mobile devices throughout the day to communicate with each other, get timely information, and entertain ourselves. And, because they’re almost always within a few feet of us, these devices offer myriad opportunities for brands to insert themselves into our lives in meaningful ways. But brands have been slow to realize this opportunity.

Whenever I browse the Apple app store, I’m always shocked by the small number of apps that have been commissioned by big brands — and this holds true for the Android and BlackBerry app stores, too. The app landscape is absolutely dominated by new startups — and big brands are getting left in their dust.

Take, for example, Apple’s list of top free iPhone apps from 2010. Big brands were noticeably missing from the following categories, where only one of the top 10 apps was from a big brand:

  • Education (kudos to NASA, which was the only big brand)
  • Entertainment (kudos to Fandango)
  • Healthcare and fitness (kudos to WebMD)
  • Medical (kudos to WebMD)
  • Photography (kudos to Adobe)
  • Utilities (kudos to AT&T)
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From Soap To Shoes

Tracy Stokes

I’m often asked how I went from marketing women’s skincare at Neutrogena to Timberland boots for outdoor guys, as they seem to be such different businesses. But for me, they have more in common than you might think. They are both strong global brands, with products you can trust and passionate, involved consumers. My passion is for figuring out what is at the heart of a brand, how consumers connect with it, and how to connect with them — understanding what those consumers have in common and where their needs are different, whether they are in Milan, Minneapolis, or Mumbai or whether they are an outdoor guy or a city woman.

At Forrester, I’m going to delve into these areas: harnessing the consumers’ voice in the marketing process; when you should listen and when you should not; the similarities — how global brands can stay true to what they are, while embracing local consumers' needs; and what this looks like in the virtual age, when global walls separating consumers in different countries have fallen down. What’s the butterfly effect of a marketing program in Shanghai on a consumer in San Francisco? What are the differences — for example, how women consume media differently than men, particularly interactive and social media, and how that affects the media mix. Finally, with so many choices, and so few dollars (or pounds or RMB), how can marketing leaders identify what return they are getting on their spend?

So here’s where I need your help. What are your brand-building challenges? What would you like to learn more about that will help you and your team connect with your consumer?

The Data Digest: Device Ownership By Generation

Reineke Reitsma

Gen Xers live in device-filled households. Whether it’s gaming systems for the kids, HDTVs and surround-sound systems for themselves, or digital cameras and frames to showcase their families, Gen X households are most likely to have these devices. Gen Xers have mastered the art of functionally integrating technology into their lifestyle and maximizing its benefits. The first generation to grow up with technology, they are comfortable with it and recognize its benefits, as do the tweens and teenagers clamoring for devices in the household.

Boomers remain middle of the road on technology adoption. Both Younger Boomers (ages 45 to 54) and Older Boomers (ages 55 to 65) fall behind the younger generations in terms of almost anything  technology-related: from the number of devices they own (on average, seven for Boomers and nine for Gen Yers and Gen Xers) to the amount of time they spend on the Internet. The one area where Boomers are ahead of the technology curve is on the amount of money they spend, on everything from telecom monthly fees to online purchases.

Mobile Payments Enter A Disruptive Phase

Thomas Husson

A recent article in The Wall Street Journal mentioned that Google could team up with MasterCard and Citigroup to pursue a role in mobile payments; this is yet another indication that disruption is looming in the payment space.

In his keynote at 2011’s Mobile World Congress, Google CEO Eric Schmidt stated that “NFC should revolutionize electronic commerce as well as payments.”

What does Google have to do with payments? Well, it has already rolled out (quite unsuccessfully so far) Google Checkout. What’s different about this new proposal is that this is not just about payments: Google would embed Near Field Communication (NFC) technology in Android mobile devices, allowing consumers to make purchases by waving their smartphones in front of a small reader at checkout counters. So what? Well, NFC is more than just a payment technology; it brings mobile payments together with mobile marketing and loyalty programs. As with mobile devices in general, it helps bridge the digital and physical worlds.

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The Driving Force Of Tech Marketing In This Decade: Education

Tim Harmon

If the overarching tech marketing theme in the ’90s was all about marketing as branding, and in the ’00s, marketing as lead generation, then the ’teens are shaping up to be about marketing as education. But not about educating customers about your product, per se. No, what I mean is educating customers about the business process/function and best practices that underlay your product, i.e., that your product supports.

In our recent B2B Social Technographics survey, fielded in Q1 2011, we asked customers, “Which are the most important vendor action factors when selecting the best vendor for a technology purchase?” By far, the No. 1 response was “how well the vendor can supplement our knowledge on the business process/function its product/technology supports.” [Other response options included “vendor’s demonstrated ability to communicate the economic benefit of implementing its product/technology” and “vendor salesperson’s demonstrated ability to understand our business problem.”]

An example is called for. I began my career as a programmer analyst (that title ages me!) for an aerospace and defense firm. I had the opportunity to “rotate” through all of the IT groups, including business applications, engineering systems, CAD/CAM, and IT operations. I won’t say I became a wizard in aeronautical engineering (although I know more than I ever wanted to about downwash), but by the time I wrapped up my stint in biz apps, I’m pretty certain I knew more about most of the company’s business processes than anyone other than, perhaps, the COO.

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Making Money On QR Codes

Julie Ask

This is one of the more creative applications of QR codes - tattoos. $240 to date at $80/tattoo. Given how permanent the code is, I'm wondering if they shouldn't have considered MS Tags - more branding and flexibility. It's the 2011 version of a dog tag. Would be more interesting if these were links to pages with medical records, etc. - something useful in the case of an emergency. Kidding aside, 2D bar codes have a lifetime - whether they live in a print ad, on a book cover, or on one's skin. Those employing 2D bar codes - especially on product packaging - must take into consideration the lifetime of the code and be ready to support it whether it's a marketing campaign or a link to a video with a safety demonstration.

Channel Enablement In The Era Of Cloud: One Of Microsoft’s Approaches

Tim Harmon

A lot of tech vendors – and channel partners – are struggling over what channel partners’ play in the cloud services demand chain is going to be. Technology is decreasingly delivered/consumed in the form of on-premise installation (a function performed by and the original raison d’être of channel partners), and increasingly delivered as-a-service by a service provider. In the software sector, that service provider is typically (but not always) the software vendor (think: salesforce.com).

And, in most cases, for good reason. Software has bugs. Early versions of software can be unstable and unpredictable. In the classic channel-partner-sells-and-installs-software model, the product (the software) remains in the control of the software vendor, i.e., the vendor assumes the risk of customers’ unmet expectations. The license is between the vendor and the customer, and the vendor is on the hook for providing bug fixes and tier-2 and -3 support.

As much as many channel partners would like to act as application hosters (and many of them do – approximately 15% of software is delivered via a hosting model today, and 20% of channel partners today have a hosting business [see “Channel Models In The Era Of Cloud”]), when it comes to early-version or mission-critical software, vendors simply can’t risk putting the as-a-service service level/performance responsibility in the hands of channel partners. Service failures, over which the vendor would have no control, would result in egg (or worse!) on the vendor’s brand, not the channel partner’s. Until tech vendors’ partner programs mature to the point where they can certify partners’ data centers, those vendors are going to be reticent to hand over the data center reins to partners.

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Our Mediocre Multichannel Mission

Martin Gill

In celebration of the fact that my Forrester Boss, Patti Freeman Evans, was over this week in London, we thought we’d go on a multichannel retail shopping tour of London to see just how well some major UK retailers are integrating their on- and offline channels and enticing their shoppers into engaging with them online.

The answer is sadly, not very well at all.

Hitting Oxford Street on a sunny Friday at lunch time, we performed an eyes-on tour of a rough cross-section of some of the better-known UK brands. We went looking for exciting new uses of technology disrupting the in-store environment. Examples of beautifully integrated online/offline/mobile channels placing the customer at the heart of the brand experience. Innovative applications of technology that seamlessly blended the digital and physical brands, enticing shoppers into engaging with these premier retailers both now, and later when they got home. Or even, how excitingly, via their mobile phones.

So while a hungry band of devotees of the fruit-flavored tech-god gathered outside the Apple Store, not realizing that just round the corner they could get their paws on a new iPad 2, sans queue, we started our shopping trip.

Flippancy aside, we were looking specifically for how well multichannel retailers are integrating physical and digital channels.

The results were (depressing) surprising :

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Current Events And Market Insights: Knowing Doesn't Equal Understanding

Reineke Reitsma

At the end of January, I spoke at the Esomar Shopper Insights Conference and part of my speech was about how technology makes the market insights professional role more challenging in some ways. For example, technology has made the world flat: The Internet makes it possible for information to travel fast, and it feels like we know everything about anything (or at least we could).* But my point was that knowing doesn’t equal understanding.

And in the past weeks, with the world on fire, this thought has been nibbling at the back of my mind. It was there when I watched television and followed the latest developments in Egypt or Morocco. When I read the news or watched the videos and pictures from the earthquake in Japan, or more recently when Britain, France and the US decided to intervene in Libya. I can follow the news minute by minute via Facebook or Twitter (and I do), but I feel I lack the context and local background to really understand what’s going on — like most of us. How will the intervention in Libya change the relationships in that part of the world? How will the earthquake and the issues with the Fukushima Daiichi nuclear power plant affect the Japanese economy? The world is flat, but we are still limited by our own horizons.

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