State of the Loyalty Industry: Glory Days by Ivan Frank, ePrize

Glory Days

If loyalty marketing were personified, he'd likely be found standing at the water's edge, reflecting on days gone by as well as his plans for the future. He may even try to skip a stone or two. Before judging where we've been and where we're headed, we usually start with where we are today. That intersection could be marked by acknowledging the presence of the Internet, the panacea of tools available to marketers, and an economic market with a sign "Recession" hanging overhead.

The Internet and related technologies have put consumers in the driver's seat. We are all spending our time more wisely - in full control of the media we choose. We spend over 30 hours a week online - not to mention the third screen: mobile.

As marketers, we are trying to crack the code of digital and engagement marketing. The good news? There are more tools than ever. The bad news? There are more tools than ever. It may be difficult to prioritize among all the choices. While the tools exist to create and extend loyal relationships, reaching the next level of loyalty and engagement remains elusive to many brands. In loyalty, as in life, setting the right priorities is more than half the battle.

The recession has also changed the way we make decisions – possibly forever. From now on, consumers will spend more wisely. From now on, credit will be different. From now on, businesses will act differently. From now on, our culture will be different.

When you see a fork in the road, take it.

What's ahead, and how do we move forward? We can see engagement loyalty on the cusp. There are some bright examples showing us it can be done well; such as with Zappos or MyCokeRewards.com. Yet, most brands have not jumped in with both feet. A recent survey of Loyalty 360 loyalty engagement panel members reveals some interesting findings:

· Most marketers rated the 'ability to drive personalized marketing via engagement loyalty' as critically important.
· Most marketers rated their brand's current capabilities to do so as 'below average.'
· Despite this gap, over half of marketers rated the #1 reason for not improving in these areas to be the 'inability to create the ROI model/case for change.'

Who invented this "Internet" anyway?

The retail marketing world faced a similar inflection point 10 years ago: the Internet. In hindsight, it seems obvious today how powerful the Internet would become for mainstream retail brands; but, at the time, major brands widely debated and doubted the future of the Internet.

Just for fun, consider the annual filings from a number of major retailers from the late '90s. Nearly all retailers failed to make a single mention of the Internet anywhere in their annual business reports -- not even in the competition section -- until the year 2000. When the market dropped out in April 2000, when many took that to mean the end of the Internet, it actually signified only the end of empty business models and the birth of true Internet retail marketing.

If you could travel back 10 years, think about the obvious investments you would make. Now, consider if board members of leading retailers could travel back in time 10 years. It's pretty clear they'd be SCREAMING at the top of their lungs about the Internet.

What will we be screaming about in another 10 years when it comes to engagement and loyalty?

ePrize recently celebrated its 10th anniversary – a milestone marking unbelievable success, unprecedented growth, and of course, a discovery of key learnings. In that time, we've been helping brands directly connect to their consumers and channel partners through promotions, loyalty, and engagement strategies. Timing is everything and we believe the time for engagement loyalty is right now.

As I contemplate our loyalty marketing future into the year 2019, I believe many loyalty winners will emerge amidst this inflection point. During great times of change come even greater opportunities.

"The best time to plant a tree was 20 years ago. The second best time is now…" – anonymous

"I wish I knew what I know now when I was younger…"

It's now 2019. Over the past 10 years, an entirely new category of brands has emerged. Many pundits call them "the connected brands." They've leveraged the power of new technology after new technology, embracing changing consumer behavior almost as quickly as behavior has changed. One-to-one marketing had been a promise for decades, but it was indeed in this decade that these connected brands took over, driving gains in market share, new product innovations, marketing efficiency, and superior profitability. Today, it's easy to see and admire their success, but in 2009, they made some very difficult choices:

· PRIORITIZATION: Despite difficulty in creating clear investment plans in digital technologies and engagement, this group took the time and pain to define ROI measurements around specific groups of consumers and specific engagement behaviors that drive value.

· DATA IS THE ROYAL FLUSH IN THE GAME OF MARKETING: These brands built and nourished consumer databases of consumers that spanned countries and continents, starting small at first but they remained steadfast to building the asset of the database.

· SPEED IS A GAME CHANGER: They reorganized their marketing and loyalty teams for speed and agility, responding to consumer feedback in real time, leveraging technologies such as "Tweets." (You may remember the name Tweets from a firm called Twitter 2006-2010, which began the micro-blogging revolution, later acquired by Facebook 2010 and changed to Twupdates, later acquired by Microsoft in 2012 and now called Bingdates).

· APPLICATION INNOVATION: Building on a carefully managed database asset, this group further invested in loyalty and engagement applications on top of technology platforms ranging from Internet, Mobile, and Social Media among others. These apps were not designed solely to market messages to consumers. These brands delivered applications that created value for their consumers such that people consumed these applications and brought the brand into the consumer's inner circle of protected time. Some of these applications have become more popular (or widely used) than the brands themselves.

· CUSTOMER AT THE CENTER OF ALL MARKETING PROCESS: With their head start, these brands further leveraged these tools to build the marketing process around the consumer. These brands pioneered and mastered the Internet and the Social Web and integrated communication mediums to drive consumer feedback and real "participation" as part of their ongoing development of new products, services, and marketing campaigns.

What does the "you of the future" want you to do now?

It's 2009. And, as loyalty marketers, we have a bright future in front of us. The obstacles may be steep but they are man-made. As consumers, we are fighting for every dollar in our pockets. As brands, we are fighting against the competition for every share of the consumer's wallet. The long-term advantage boils down to a loyal relationship between the brand and consumer. Without the presence of loyalty, the fight for every consumer dollar will become primarily about price, as commoditization sets in. Some of us are already facing this prospect all too well. Unless we prioritize, and plant the necessary trees today, they will never take root.

This inflection point presents a great opportunity to ride a wave like we have never seen. Think about how obvious some of today's reality will be when we reflect upon it in a few years. Can we really have a loyalty effort without a deep Internet and Social Media strategy? Can we really afford not to spend the time to focus, prioritize and justify new investments? While each brand's specific journey is not set in stone, the future of loyalty is gaining more and more daylight. The question is, how will you respond? Yes, there are challenges. Yes, there is risk. And yes, the time is now.

What's right about America is that although we have a mess of problems, we have great capacity - intellect and resources - to do something about them.

"Whether you think you can or can't, you're right"--Henry Ford


Contact Ivan Frank, Chief Marketing Officer, ePrize, LLC
Follow Ivan on Twitter: ivanateprize
Email: ivan@eprize.com
Call: 877.837.7493


About ePrize, LLC
As the worldwide leader of interactive promotions, ePrize creates one-to-one relationships between advertisers and their individual customers. With a focus on motivating specific consumer behavior, campaigns range from online sweepstakes to global points-based loyalty programs. Since 1999, ePrize has successfully launched 5,000+ promotions for 74 of the top 100 brands including Coca-Cola, Dell, General Motors, The Gap, Miller, Yahoo!, P&G, Disney, and Wendy's. In 2008, ePrize was named to the Red Herring 100 as one of the top private technology companies in North America. All 325 ePrize professionals are dedicated to delivering extraordinary service, along with immediate and measurable results. Headquartered in Detroit, the company also has offices in New York, Chicago, Los Angeles, Dallas, and Atlanta. For more information, visit http://www.eprize.com/.