Practitioner experience meets customer experience

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“Engagement Expo 2011,” held at the Westin Stonebriar in Dallas last week, focused on customer experience, and here I’ll focus on highlights from my experience at the event:

Ed O’Boyle, Practice Leader, Marketplace of Gallup Consulting, discussed the state of American consumers and their level of engagement in “Engaging Customers Today and Planning for Tomorrow.” The findings that O’Boyle presented confirm the findings of COLLOQUY’s Relationship Chain(TM), which demonstrates that customer engagement (from dialogue to redemption) lead to further, more active, engagement and greater customer value. O’Boyle shared these findings from their research:

* Fully engaged customers provide a 23[%] premium in performance, whereas fully disengaged customers create a 13[%] discount in performance. The overall consumer mix of engagement:
* 26[%] Fully Engaged, Performance Index 123[%]
* 27[%] Engaged, Performance Index 107[%]
* 27[%] Not Engaged, Performance Index 99[%]
* 20[%] Actively Disengaged, Performance Index 87[%]
* As well, when both strong employee engagement and strong customer engagement are found, it equates to a 240[%] boost in performance.
* Overall, more people are saving more than spending, which is a new trend. Research shows that the trend could be here to stay. Consumers are saving money in two ways:
1. Cutting back on categories that not deemed necessary
2. “Trading down” brands in non-engaged categories

Among the other conference highlights was a session “Ask the Engagement Expert: Making Engagement Work Today and Tomorrow,” a moderated discussion that included Mark Shipley, Vice President of Loyalty of Sears Holdings Corporation, and Robin Korman, Senior VP of Loyalty and Strategic Partnerships with Wyndham Hotel Group. (Sears Holdings, by the way, is the recipient of the Master of Enterprise Loyalty honor in the 2011 COLLOQUY Loyalty Awards roster.) Among their highlights:

* Shipley discussed the challenges of email, as ISPs are setting a higher bar for customer engagement and will block emails if open rates aren’t high and spam/block rates low. Shipley also encouraged the audience to keep program measurement and ROI calculation simple so the organization can react more quickly to data.
* Korman shared the challenges of a single engagement strategy for Wyndham Hotels, a company with 15 hotel brands and a franchise model. As more than half of the loyalty program enrollments come through the property itself, finding the right incentive for franchise owners is paramount. She touted the importance of the first interaction with a new member. She encouraged everyone to resist a selling message and instead use that widely-read first message to thank new members for joining, tell them more about program benefits, get the dialogue going, get their engagement out of the gate. She also shared that mobile technology is leading to more last-minute hotel decisions. Travelers are waiting until the afternoon to decide where to stay that night. Wyndham is looking at this trend and asking if they should change their strategy: pass people today-only deals in the afternoon?

And for some international perspective, Rob Voase, head of CRM of GAME Group, and Nick Afonsky, SVP of Development of 5one USA, shared insights from GAME Group’s loyalty programs in “Welcome to the GAME: How GAME Group Uses Customer Insight to Drive a Positive ROI.” GAME is committed to staying relevant as bricks and mortar stores become less important to gamers. As their CEO Ian Shepherd has said, “We are not a retailer. We are in the business of building customer relationships.” They use customer data in various ways, such as using customer reviews of games when trying to engage lapsed customers, or using customer insights as currency when negotiating with game makers. Among the session notes:

* The GAME Group operates 1,300 video game retail stores across Europe and Australia. They have two store brands: GAME stores for the more casual gamer and Gamestation for the more-intense gaming enthusiast. Both stores have loyalty programs: the GAME Reward Card and the Gamestation Elite Card.
* GAME Rewards has 12 million active members and sees that 65[%] of transactions come from members. There is a 3-pound annual fee, and members are rewarded 2.5[%] back (5[%] on pre-order titles). Points can be earned and redeemed both in-store and online.
* GameStation Elite is free to join. As 70[%] of Gamestation transaction are cash transactions, it’s important to use the program to identify customers. GameStation Elite also gives 2.5[%] back. Since their October 2010 launch, they have signed 1.5 million members, which accounts for 69[%] of Gamestation transactions.
* There is little shopping overlap, as only 13[%] of GameStation Elite members also have the GAME Rewards Card.
* GAME also sees strong results on direct-mail efforts, with an average response rate of 13.5[%] (versus 3[%] control).

Dan Ribolzi
As a LoyaltyOne consultant, Dan advises on best practices in all areas of loyalty marketing, including program design, evaluation and growth strategies. Drawing on his expertise in customer-centric marketing, he helps develop and implement loyalty solutions that meet clients' business objectives while creating value for their customers.

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