Promotional Incentives are Rewarding Brands with Customer Loyalty

Source:  www.tech-seeker.com

Promotional incentive- what exactly does that term mean?  If you look in Wikipedia, you won’t find anything.  I guess that means that the definition is still up for grabs and that the definition is whatever you want it to be.  For us, promotional incentives are simple.  They are not personalized pens or “gimme” hats.  Promotional incentives are what marketers give you to build and maintain brand loyalty.

Prime promotional incentive programs include free bread from Sara Lee, Coca Cola bottles with the chance to win money and prizes and free Beyonce ringtones when consumers purchased Loreal cosmetics.  Consumers love to get something for nothing and that is why non monetary rewards and promotional incentives are proving to build brands and customer loyalty.

Millions of people downloaded free music from iTunes in 2004 when Pepsi gave away 100 million songs.  This noted music download promotion was announced at Super bowl XXXVlll.  What better stage to introduce a promotional strategy of this magnitude?  This was the introduction into theera of monetized digital content.

This customer reward program was successful for Pepsi, for iTunes and for the consumer.  All parties involved received what they wanted.  The consumers received free music.  Pepsi received increased brand recognition and loyalty.  iTunes, who was only a year old at the time, received brand exposure which millions of dollars of advertising could not have accomplished.

Promotional incentives are not a new phenomenon, but they are here to stay and digital music incentives are the rage.  According to Risk Analyst Steve Dersch, “The DIGITAL part makes it portable, easy to distribute, and harder to abuse.”  Because of the safeguards from abuse, the price of promotional music downloads can be as low as $.04- $.06 at scale instead of the expected $.86- $1.

Brands are built through customer loyalty.  Customer loyalty programs including promotional incentives and music download promotions, provide customers with a reason to be loyal to a brand.

For more details and information you can logon to http://www.promotionalcurrency.com/

Source picture: http://www.toddsmods.com/blog/archives/2005_01.html

Why digital rewards could save traditional loyalty programmes

Source: www.Utalkmarketing.com

By Denis Huré, CEO, and Jill Goldworn, president and co-founder of the first club™

There is no doubt that loyalty programmes are on the rise today. In the US alone, there are 1.8 billion individual memberships in loyalty programmes (source: Colloquy.com), everything from airlines to convenience stores to cinemas. In light of this huge number, the general perception is that consumers are happy to join loyalty programmes – eager to enjoy the added rewards that come with loyalty programmes. The reality, however, is that they are not. Confirming this expectation gap, a recent survey by the Chief Marketing Officer Council found that some 32% of consumers surveyed felt that participation in loyalty programmes holds “little to no value.” Ouch.

What has emerged as a result of this disconnect is a new direction in loyalty programmes: instant reward redemptions. In the past, instant rewards have been limited to cash or discounts at the register; maybe a free item of very low value. Technology, thankfully, has given rise to this new breed of instantly redeemable rewards – the digital, downloadable kind. These instant rewards promise to finally eliminate some of the traditional problems associated with loyalty programmes, like engagement and delivering value.

Problems with traditional programmes

According The Journal of Retailing, “the rewards associated with loyalty programmes provide a means to establish reciprocity between the customer and the company.” But the problems that have plagued this interaction, or reciprocity, throughout the years and usually stem from the delay between collection and redemption by loyalty programme members. Whether a programme’s threshold for redemption is too high, or the redemption process is too cumbersome (which often the case, ask any FFP member), traditional loyalty programmes suffer from inefficiency. And here’s where instant redemption provides instant relief, specifically in two areas:

Low-threshold consumers

In the past, a big problem has been the loss of “low-threshold” consumers. For these consumers, who maintain a low accumulation of points (or programme currency equivalent), the traditional loyalty programme concept fails: if the point threshold is too high, the programme has become irrelevant because the consumer feels the reward is not obtainable (source: Harvard Business Review). In such cases, the loyalty programme is actually hurting the brand. It suffers because the consumer disengages from the brand before they have received an added “reward” for membership.
Instant reward redemptions provide companies a very affordable alternative to offer these low-threshold consumers an easy way to burn low point accumulations. Loyalty programme managers also benefit, as studies have shown that these “light buyers” represent a large increase in spending and purchase frequency post-redemption (source: Journal of Marketing). In other words, they are not a segment to be ignored.

Delayed Redemption

Another area of concern with loyalty programmes is cumbersome redemption processes. Regardless of the delivery method, timing is of the essence in loyalty programmes. In fact, the timing is (almost) everything. The longer the delay in collecting a reward, the less powerful the loyalty creation (Sloan Management Review). Here, instant rewards reduce the delay between collection and redemption and, therefore, a larger chance for loyalty engagement success.

Digital Content: The ultimate instant reward redemption

Digital content, offering loyalty members downloadable content (such as the latest selection in music, movies, software, books, games, magazines), is emerging as the premiere medium for the delivery of instant reward redemption. The sheer selection of digital content that is available, along with its monetisation potential, makes it an excellent vehicle for instant reward redemption programmes. Consumers want instant rewards, and digital content is the next logical step. Research from Mintel confirms this fact: 47% of consumers surveyed said their choice of loyalty programme would be influenced by instant redemption options, such as cash or discounts. Jackpot.

So with this information acquired from recent surveys and obvious positive consumer sentiment, the next question seems to be: is digital content a good substitution for cash or discounts?

In a word, yes. According to Mintel’s study, 61% of respondents said that lower overall cost for merchandise they would have purchased anyway is an important attribute of a loyalty or reward programme. It is feasible to assume then, that relevant content – content that the consumer is likely to purchase regardless – is a good substitute for cash or discounts. And considering that 65% of internet users have paid for intangible digital content, there is a huge market for relevant and engaging digital content waiting to be developed (source: Pew Internet). In the UK, a recent YouGov survey showed that among those aged 18-34 years old who had engaged in digital activities, 22% spent more than £5 on digital books, the digital content category receiving the highest spend (source KPMG).

Digital content presents a win-win strategy

Digital content gives businesses the chance to burn points off their balance sheet, while offering the entire spectrum of loyalty programme participants the opportunity to redeem points for merchandise in which they are interested or already purchasing on a regular basis.

In essence, instant digital rewards have bridged the gap between reality and perception. By making rewards instantly redeemable, businesses can give their customers the value that they seek: relevant rewards instantly and anywhere, loaded onto the devices they use in their everyday lives. Instant digital rewards, it seems, have created a new trend in loyalty programmes: programmes that work – for everyone.

Why engaging mums is essential to accessing families

Mar 9, 2011

Source: www.utalkmarketing.com

As the primary controller of the family finances, mums make around 97% of the weekly purchasing decisions for their families. With an estimated 19 million mums in the UK it is clearly in the interest of brands to ensure their marketing strategies, products and services are meeting their needs and expectations.

To find out what mums really want from brands, we must be willing to connect with them in their natural environment, in the course of their day-to-day lives and routines. This could be out shopping; with friends; at home; at playgroup etc. The language, tone, and line of questioning we use should also follow the same natural pathway. This reduces the interference with mums’ regular behaviour and allows real, true insight to flow freely, unhindered.

An example of this is the recent work we completed for a major baby food manufacturer. We were asked to review a new line of organic baby food products, which were in development. Giving mums the freedom to trial and think about the products in their own home environment, as part of their daily routine, allowed them to develop really insightful feedback, purely based on their needs and requirements as a mum. The feedback has been used as a significant resource in product development and marketing.

All too often we see research with mums being conducted at arms length, through form filling, over the internet or in hostile, formal surroundings. Engaging mums in this way will not provide a true picture of what really matters to them, and certainly can’t be converted into any meaningful consumer-led marketing strategy.

It is often the piece of the jigsaw we see missing from seemingly well thought out marketing programmes.

It’s important to recognise the key channels of influence and true ‘touchpoints’ for mums too. Some 84% are regular internet users, and with new online channels dedicated to this group popping up on a daily basis, there is a strong belief among marketers that this is now the main source of information and influence.

We work with thousands of mums on a daily basis and they tell us that the internet is important but that their own friends and family are a far greater influence. MumPanel statistics that show 67 per cent of the MumPanel network still ask their own mum for help, advice and guidance.

On top of that, mums still regularly attend coffee mornings and child support groups and rely on their own local offline networks for advice and support. They’re also fantastic networkers at the playground gates. So we should not forget the importance of the good old mum network out and about and the increasing influence of the grandparent generation.

The value of tapping into the conversations that take place within these networks and starting the engagement process within the natural circle of mums is significant. This is where we find truly unhindered insight and where we can start to engage with mums most effectively.

An additional benefit of tapping into these mum networks is that we can connect with many mums who are normally hard to reach. These are usually friends of friends who would not ordinarily join a mum panel or participate in market research. Without these mums you can end up with a large number of career mum panelists, as well as higher proportion of more outspoken mums. While these are valid consumers, they do not always offer the profile required for every brand in the UK.

Translating mum insight into meaningful marketing strategy can, however, cause considerable difficulty. Results, whether they are quantitative statistics or qualitative opinions, are only as good as your analysis or interpretation of them. Data can easily be misinterpreted and achieve a completely devastating outcome.

Getting this part of the process right is the real challenge. A good marketing strategy should retain customer centricity, while generating impressive sales or services. To ensure data is transferred into meaningful strategy, we advocate that sense checking continues throughout the development process, from new product development to marketing communications, where the customer or audience is involved from end to end and not just at the start and end.

And you’ve got to know your audience. Having full understanding of, and empathy for, our audience gets us an awful lot closer to the customer-centric strategy that delivers true consumer engagement and satisfaction – not to mention increased brand loyalty and a much improved bottom line.

By Lynne Barcoe at MumPanel

the first club™ Gives Insight into the Future of Loyalty Programs in New Whitepaper, “Loyalty: Looking Forward”

Give Loyalty Program Members What They Want, When They Want It with Digital Content

Los Angeles, February 09, 2011 – Airlines, Hotels, and Retailers take notice: the popularity of loyalty programs is growing; but so is the dissatisfaction over program benefits and rewards when it comes to the high number of points or miles necessary for redemption, and rewards that consumers recognize to be valuable.

Brands must understand this new evolution of loyalty consumer demand, and a new whitepaper from the first club™ “Loyalty: Looking Forward: The State of the Loyalty Industry and its Digitized, Instant Future” provides insight into the next generation of loyalty programs. “Loyalty: Looking Forward” focuses on the challenges of low motivation at the lower spectrum of loyalty program customers. What can brands do to prevent flight of customers who maintain low accumulations of points? The broad answer: provide incremental rewards that are relevant to the consumer, easily attainable, and instantly available through digital content.

68% of consumers feel that a loyalty program can strengthen their relationship with a brand, and successful rewards programs will cater to this demand for relevant offerings by providing a wide array of instantly-available digital content. “Loyalty: Looking Forward” provides specific industry data for airlines, hotels, and retailers: information that is essential to the loyalty program manager striving to prepare for the digital reward evolution.

A look inside “Loyalty: Looking Forward”:

Digital Content
48% of consumers spend more with a company whose loyalty program offers content that is relevant to them personally. 65% have purchased digital content online. It is imperative, therefore, that brands implement programs that offer a wide array of content that is available digitally and easily.

Airlines
The modernization of airline FFPs to include digital rewards will substantially decrease airlines’ exposure to financial liability (by encouraging the incremental redemption of miles), and will resonate with consumers who clearly desire more value from their airline loyalty program.

Hotels
In today’s online deal-shopping atmosphere, consumers are less responsive to in-hotel premium services. The days of offering elite “status” or premium service for customer loyalty are eroding. The new day requires an offer or promise of tangible added value: 47% of consumers are motivated to join programs that provide instant gratification.

Retailers
Offering direct discounts for loyalty program members gives retailers the ability to immediately impact consumer decisions; these discount incentives, however, are easily duplicated by competitors. The result: price wars within the segment. Instead, companies have market expansion opportunities via loyalty programs or promotions that engage consumers.

“Loyalty: Looking Forward” provides:

- A look at what digital content consumers are demanding.
- Explains how digital rewards provide hotels a cost effective opportunity to match these consumer demands.
- Explains how cross-promoting across brands through digital rewards will expand a retailer’s market and increase margins.

Featuring latest statistics and defining characteristics of various industry loyalty programs presented by the first club™, “Loyalty: Looking Forward” will help program managers grasp emerging loyalty trends and their digitized, instant future. To download a copy of the whitepaper, please visit www.thefirstclub.net/en/white-papers or contact Vanessa Horwell at vanessa@thinkinkpr.com for more information.

the first club™ Gives Insight into the Future of Loyalty Programs in New Whitepaper, “Loyalty: Looking Forward”

TLA expands to Canada with new partnership

Los Angeles, 2nd June 2010. The Licensing Agency, Inc. (TLA) announced today its new partnership with the Canadian-based licensing and promotions agency, Kanu Inc. They will bring TLA’s range of services including TheFirstClub.com to Canada reinforcing TLA’s strong presence in North America.

Based in Toronto, Kanu Inc. was founded in 2010 by veterans of the video game industry and Canadian retail business. They provide licensing, promotional and loyalty solutions, a perfect match to TLA’s core services. The Canadian agency will especially be a powerful asset to the 2010 launch of TheFirstClub.com in North America.

Jill Goldworn, founder and president of The Licensing Agency states: “TLA is very proud and excited to partner with Kanu Inc. We believe their experience, knowledge and relationships within the Canadian market will be a tremendous benefit to expand our loyalty and rewards solution – TheFirstClub.com.”

TheFirstClub.com is a versatile portal where end-users can download music, PC games, mobile content and shortly movies, eBooks and Audio Books, in return for redeeming promotional vouchers. TheFirstClub.com has been specifically designed to enhance loyalty reward programs and sales promotions giving a unique access to the entertainment world on a worldwide level.

Kanu Inc. will also represent the other services of The Licensing Agency group including licensing services, digital sales promotion campaigns, theatrical partnerships, viral marketing campaigns and many more.

Jean-Paul Rehr, CEO of Kanu Inc. adds: “The current economic climate demands inventive, cost effective promotions and rewards tools for business to draw and keep customers. We want to deliver these solutions to Canada with the same effectiveness and creativity that TLA have brought to the European and U.S. markets.”

To know more about The Licensing Agency and its range of services please visit www.thelicensingagency.com.

To know more about Kanu Inc. please visit www.kanuinc.com.