Cash is King with Rewards!

Today’s consumers are much savvier at finding out what is available to them at the lowest price and I am specifically referring to the retail market in South Africa. Research in the marketplace concludes that the best rewards programme for any company is to offer cash-based rewards due to consumers usually become frustrated with points-based programmes. For example, if you have accumulated points at the start of the programme, the value continues to drop – and who wants to be part of such a programme? The use of points and miles-based rewards programmes are not effective in acquiring or retaining members as it often takes a long time to earn and redeem the rewards.

It doesn’t matter where you go these days or where you shop, you are confronted by staff at the point of sale stops asking you to join their rewards or loyalty programmes. For example, currently in my wallet, I have the following loyalty programme cards at my disposal, e.g. ABSA’s “Rewards Card”, Exclusive Books’ “Fanatics Card”, Boardmans’ “Thank you Card”, Kauai’s “LiveLife Card”, Clicks ClubCard, Dis-Chem’s “Healthy Living Card”, CTFM’s “Accrue Card”, SterKinekor’s “MovieClub Card” and PicknPay’s “Smart Shopper Card”.  Let me confess, I LOVE ‘immediate gratification’ offers and I love spending at the above mentioned companies as they reward me each time. I have done what they have asked me to do and then they compensated me for doing just that. This kind of reward is based on the age-old marketing, value-add concept of “action and reaction”, which always seems to be a WINNER!

We as marketers are confronted each day with the challenge to acquire new customers and what are we going to do to retain them? So you may ask: ‘why is it so difficult to earn a customer’s loyalty?’ The answer to this my friend, is that attention spans are shorter, as the old saying goes ‘time is money and money is few’, patience is running thinner and the competition is visible today more than ever. You need to go in with the right engagement strategy when starting a loyalty programme for your company. The wrong approach is to only focus on acquiring a database full of potentially wrong candidates. The winning solution is to acquire the right consumers from day one as your chances of building solid relationships are much greater by demonstrating value is the key to the long-term success of your programme.

Therefore, you need to determine what resonates with your members and a good programme will offer VALUE, whether it’s in the form of cash-back, merchandise or airline points/miles. The whole concept of a loyalty programme is to change your consumers’ behaviour but remember, if they never receive the rewards, they will lose enthusiasm for the whole programme, and you have failed miserably…

LoyaltyPlus' Blog: The future of Social Media

One of my friends recently posted the following comment on Facebook: “I wonder how we will remember Facebook in 2030. Will we see it as ...

The future of Social Media

One of my friends recently posted the following comment on Facebook: “I wonder how we will remember Facebook in 2030. Will we see it as a craze gone wrong in the same fashion as we think back at disco music, perms, Modern Talking and roller skates? Or will it be mentioned in the same breath as landing a man on the moon, the '95 Rugby World Cup final and Pringles Chips? I suspect the former.” And I intend to disagree, hear me out:

Bob Dylan once said, ‘the times they are a changin’. Allow me to shed some light on the road of social media development:

In 2008, a very interesting article was published in the Public Relations Journal (Public Relations Society of America), on the three-year-long international survey of public relations practioners examining the impact of blogs and other social media were having on public relations practice. The results indicated that both blogs and social media have enhanced what happened in the public relations sector and that social media and traditional mainstream media complemented each other. Further to this, the emergence of blogs and social media has changed the way their companies communicated, especially with regards to the external audiences. These findings suggested that social media complemented traditional news media, and that blogs and social media influenced coverage in the traditional news media sector. Therefore, blogs and social media have made communications more instantaneous by encouraging companies to respond more quickly to criticism.

In 2009, an article was printed in the ScienceDirect Journal (Indiana University) stating that social media was the new hybrid element of the promotional mix as it made it possible for one person to communicate with hundreds or thousands of other people about products and the companies that provide them. It argues that social media should be considered as part of the promotion mix because in the traditional sense it enables companies to talk to their customers, while in a non-traditional sense it enables customers to talk directly to one another.

In 2011, another article was published in the Massachusetts Institute of Technology stated the role Social media was playing in the business industry and how it could enhance existing resources and capabilities in a company. All of this could be done by adopting appropriate social media guidelines, training and policy enforcement across all sectors and departments. Adopting social media by itself will not confer a company’s sustained competitive advantage but capabilities thus enhanced could confer a company’s sustained competitive advantage.

Social media seems to be doing it more frequently than other marketing channels. Let me venture even deeper into this rabbit hole. If you go onto any search engine today, you will find millions of social media jobs being incorporated into marketing jobs along with ROI (return-on-investment) tools to measure your social media content and strategies. Every marketer out there is also fully aware that we need to keep track of the entire do’s and don’ts and changes as social media generates leads – a marketer’s gold mine! We as marketers also realise that social media strategies must form part of the broad and general marketing mix therefore we know that social media is here to stay – period.

Just have a look at the following stats which proves the value of social media:

*Source: Webmarketing123. 'The State of Digital Marketing 2012 Report,' Aug 28, 2012.

Let me end by saying the following to you: if you aren’t prepared for the visual content revolution, you may be left in the dust!

Conquering the internet marketing frontier!

At the speed at which technology is advancing and the ways in which consumer behaviour is shifting it is not about the battle between online and traditional marketing but rather strategically selecting which marketing tools complement one another. We are moving from mass to individual marketing and the more info or data you have, the better you can target a consumer. As a marketer we are faced with one of the biggest decision making processes when confronted with internet marketing as it is such a broad concept with so many different angles and choices and the list can go on. Therefore, before we start undressing this mannequin, we first need to decide what is the major goal that we would like to achieve, for example, to establish an increase in sales within the next year with an average of 15% through e-commerce or repositioning. So how are we planning to execute this jack-in-the-box? Well, by keeping the following objectives in mind: (a) establish a great flow of traffic (people) to our site; (b) establish an interest to keep the potential clients for a longer period on the site to confirm possible sales; (c) persuade potential clients to respond through the great offers advertised and most importantly; (d) get permission to interact with them via newsletters, e-mail campaigns and mobile marketing.

If you have ever found yourself in this foreign space of (a) online advertising (search engine optimization, adwords and affiliate marketing), (b) permission marketing (e-mail marketing, newsletters and mobile marketing) before moving on to (c) social media marketing (social networks, online communities, blogging, viral marketing, online public relations and reputation management), then welcome but know that once conquered, you can consider yourself as the internet’s Joan of Arc!

What are the next steps?

• Build a keyword strategy
• Optimize your website
• Create a blog & marketing offers
• Promote content through the social media portals
• Convert website traffic into leads
• Nurture leads with targeted messages
• Optimize your marketing for mobile viewing

Now go and have fun! Remember to tackle each tactic step by step to make internet marketing more manageable.

Is luxury brand purchases declining?

One must keep in mind that although the recession has hit the world hard and still continues in a descending spiral, there is still a segment of the population that has not felt the impact yet. These are the high-end spenders with a net worth of millions and billions of dollars and they form the support group to the luxury brands of the world. These high net worth individuals are still travelling, purchasing high-ticket items and seeking out services that enrich their lives while they do not cut back on their lifestyles. Their spending patterns are a bit different these days but although prestige products (i.e. Bentley coupé) remains on the shopping list of the ultra-affluent, they are also devoting more money to satisfy their non-material needs such as diving with a world-ranked scuba diver or having a world-renowned chef preparing meals for private dinner parties at their abodes. They continue to spend on what is most vital to them i.e. their health, families, pets and charities.

The world’s population of HNWI’s (high net-worth individuals) increased to 8.3% in 2010 compared to the 17.1% in 2009. The growth of financial wealth of the HNWI’s was 9.7% compared to the 18.9% jump in 2009 after the recession crisis losses of 2008. Although the population of HNWI’s expanded in 2010 along with their wealth, was the growth more moderate compared to 2009.

According to the latest report, LVMH announced a 25% increase in profits in the first quarter of 2012 to 6.6 billion Euros.

Have a look at the following stats from China:

Generation Y is a powerful emerging demographic that should be mentioned here, as they are highly educated and they do tap into the good life. This segment consist of approximately 70 million people that were born between 1983 and 1997 and they are extremely comfortable anything hi-tech. This demanding group are willing to spend in those areas that lend to individualism, such as designer cars and clothes.

Luxury brands are not for everyone, but for a certain individual who has reached a higher level in their lifestyle. Even with the economic downturn in the world today, the wealthy consumers amongst us are still willing to pay for access to exclusive experiences as well as luxury brand products. These high net-worth individuals would rather cut their spending in order to afford a single exclusive valuable purchase that they believe will better their lives (‘trade up/down’ phenomenon). If you approach any luxury brand company such as Vespa, Jaguar Land Rover or Bentley with a discounted proposition, you will be requested to make your future purchases at Toyota or Honda etc. Reason being, luxury brands are very reluctant and unlikely to discount their products or merchandise, not even during an economic downturn but rather include extra services such as an extra year to the motor plan! Why may you ask? Luxury brands believe that they will lose their niche market appeal to the high-end consumer market, as it is detrimental to their brand reputation. They would rather refocus their current marketing strategies to establish a better and more loyal customer base than trying to extend their offerings to a lower LSM group by discounting their product offerings. Therefore, the luxury brands of the world will focus on brand awareness and differentiation.

In the end, luxury brands need to decide what will be in the best interest of their brand and ensure that the strategy stays fool-proof. There is always a risk discounting the brand to accommodate the lower income level consumers desire to own a piece of the brand and on the other hand, keeping the brand exclusive to the traditional market and not comprimising the image. Brands do work hard to keep the prestige on a certain level and by generally speaking, should a Bently be discounted just to ensure that the sales do not decline, the brand image will be damaged to a certain extend that it will not be percieved as an exclusive and elite product.