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Loyalty marketing: trends and challenges

'How to I love thee/Let me count the ways......" Elizabeth Barrett Browning
TIBCO has done a study on trends in loyalty marketing -- as a precursor to unveiling their TIBCO Loyalty Labs solution at the Cards & Payments Asia AND Retail World Asia 2012 Conference in Singapore between 25 and 27 April 2012. We bring you highlights of the study -- and a link to download the full report  
Details of the conference, organized by Terrapinn can be found here:   

Today’s standards for measuring the strength of customer engagement – frequency, recency, monetary value, and advocacy – are essentially the same as thosein place half a century ago. While the measures of success remain the same, the marketing landscape has changed beyond recognition, with enormous challenges to establishing anycustomer relationship at all, much less advocacy.

Marketers can’t simply tack on the internet to the TV, print, radio, and outdoor options available in an earlier, simpler era. The internet itself is fragmented into social media, search, games, the blogosphere, entertainment channels, and conventional web sites that may or may not involve e-commerce. The audience is fragmented as well. In this new environment, loyalty initiatives play an increasingly important role,particularly those initiatives that go beyond simplistic points-for-purchases andencompass the extent of loyalty-building tactics now available. This whitepaper seeks to keep marketers up-to-date on the newest trends and tactics in loyaltymarketing and authentic customer engagement.

Game Mechanics rationalize and codify the psychological reasons people enjoy games. Now marketers can use these sametechniques to get people hooked on their brand.Gamefication, or using game mechanics in industries other than gaming, hasproduced new concepts ripe for use in marketing like “interval rewards schedules”(participate for a specied time period and get a reward) or “micro-leaderboards”(compete with a small group of friends for points). One of the best examples of gamefication has nothing to do with a literal game,but with artful use of the simple game mechanic called “envy.” Every time airlinepassengers in a loyalty program are allowed to board  first or use members-only airport lounges, a certain amount of envy is created in (at least some of) the passengers who don’t have these privileges, which can in influence them to changetheir buying behavior.
Social Media: Conventional loyalty programs differentiate themselves through their reward/ purchase ratio and type of reward (merchandise, discounts, coupons, levels,etc.). There is a temptation to transfer this thinking to social media, and withFacebook consuming over 12 percent of people’s online time it’s not a bad idea as an initial step. But in order to fully exploit the power of social media, brands need to adopt a new strategic approach to how they value their customers, and specifically, place more value on brand advocacy.
Time-Based Posting: So you’ve created a hot Facebook fan page, with over one million “likes,” meaning access to over one million news streams. Of course you’re thinking about what to post – offers, discounts, invitations to join a game – but you should also be carefully considering when to post. Morning or evening, weekday or weekend, the times you post or tweet candramatically affect response rates, and opportunities to maximize responses (e.g.“likes” or re-tweets) arise and disappear daily, even hourly.
Privacy concerns are growing worldwide, and there’s plenty of evidence to confirm the legal establishment is going to support them. This trend will surely frustrate the efforts of brands to identify and engage their customers – and it casts a new light on the value of loyalty programs. To put it  simply:loyalty = permission.
Real-Time Marketing:  Driven by enormous advances in microprocessors and networking, data is now available not in days or even hours but milliseconds. Due to this change in technology, loyalty marketers have access to an invaluable new tool called complex event processing, also known as event-driven computing.

Staying Ahead: Developments in technology – the rapid penetration of mobile platforms, the dominance of social networks as a communication nexus and the ability of database engines to integrate and mine vast amounts of data – have given rise to game-changing opportunities for loyalty marketers. The winners in this new, technology-driven environment will not only reap short-term gains, but may well
in infuence their market share for decades.