the hub magazine - the big picture

Whenever my family and I make one of our regular visits to the local ice cream parlor, I make sure we are served by Lisa. We’ve gotten to know Lisa over time — she’s working her way through community college and never fails to have a smile on her face. We seek her out. One night, facing long lines at the ice cream shop, we walked out of the store when we saw Lisa wasn’t working. It just wasn’t worth it.

How did it come to this? Well, we like Lisa because she greets us, because she has punched an endless series of 10-punch loyalty cards for us over the years, and not least because she’s the server most likely to put an extra scoop on our cones.

For my family, the act of getting ice cream has steadily progressed from a simple desire to satisfy our sweet-tooth cravings into a more complex transaction of expectations and need fulfillment. At what point does the switch flip? At what point does an ordinary consumer become a “loyal” one? And for that matter, what is loyalty?

The run-of-the-mill “loyalty” program focuses narrowly on encouraging a consumer who has just bought a product or service to repurchase, whether through points, badges, a punch on a 10-punch card, or any number of other similar mechanisms. But loyalty should be considered more broadly — it includes the purchase-repurchase stage, but is not limited to it.

Loyalty is a measure of a given person’s willingness to commit to a brand. Beyond buying the next ice cream cone, it also includes the degree to which I am willing to go out of my way to find Lisa and buy ice cream from her, to be willing to pay a premium and to be an advocate for a specific product, vendor or even scooper.

If that broader definition is true, then the idea of commitment has broad implications for how we think about marketing.

A brand is the sum of our collective encounters with and perceptions of it. All of these encounters are likely to be disconnected and interspersed with encounters with other brands. Our lives are not typically experienced in a linear fashion, and the accumulation of various encounters and experiences with brands can often contain conflicting bits of information. Our brains synthesize it all together, coalescing everything into a single consumer perception of the brand.

Every encounter with a brand communicates something about it. And so every encounter a consumer has with the brand — from picking up the packaging, to dialing a call center, to reading about it in the news, to browsing an end-cap, to conversations with friends — has the potential to foster (or hinder) loyalty to that brand. Loyalty, then, is the string that connects these various brand encounters.

Loyalty is, perhaps, something we haven’t had to think about all that much before the past decade, but it is more vital than ever. Cheaper technology and faster innovation cycles have commoditized so many categories, making it more and more likely that a consumer has only a tenuous relationship, at best, with most brands. And the consumer journey itself has fractured into a non-linear root system of choices and directions. Consumers have virtually infinite ways to research, buy, and advocate a brand along their journeys.

Especially when playing in a commoditized category, it’s easy to reach for standard-issue loyalty programs — something with points, say. Airlines do it, as do hotels and grocery stores — even my local ice cream shop with its punch card. These are programs that are laser-focused on driving a consumer from purchase to repurchase.

But even within this narrow section of the consumer journey, marketers today have begun to experiment with new methods of driving repurchase. For example, JetBlue recently has begun supplementing its frequent flyer program with a program that employs game mechanics.

Similar to how Foursquare works, JetBlue awards points and badges for performing airport-based activities, such as checking into an airport terminal, and rewards point leaders with plane tickets and the like (Advertising Age, May 31, 2010). There are many more examples, but to underscore the fact that loyalty strings throughout a consumer journey, let’s look for examples of how marketers foster loyalty both earlier and later in the journey.

First, at the beginning: With a little bit of diligence, marketers can set the stage for loyalty to take hold very early on. Consider Facebook’s nearly ubiquitous “Like” buttons, which have transformed the social media giant into “the loyalty card of the Internet” (Advertising Age, September 20, 2010). Using Facebook “Like” data, brands can tailor search results to a consumer’s very specific preferences, and guide them to products or areas that might appeal to them.

Home Depot has begun using this data to tailor the consumer experience, making it far easier for consumers to continue on their journeys with the brands. They know that with the advent of price comparison utilities, like Red Laser, the consumer is less likely to commit to shopping at Home Depot, even after having set foot in the store.

Taking a completely different tack, Zane’s Cycles in Connecticut goes out of its way to build relationships of trust and integrity with its consumers. The bike shop allows anyone to take a $6,000 bicycle for a test ride — without deposit or identification. Zane’s loses about two bicycles to theft each year, but has ridden faith in its consumers to a $13 million per year business (BusinessWeek, February 18, 2010).

Innovative marketers have built loyalty through other points in the consumer journey in many ways:

• The famously accommodating customer service at Zappos is a cozy blanket surrounding the consumer’s purchase experience and virtually ensures a repeat purchase.

• The My Starbucks Idea program, allows consumers to feel like owners of the company — through this program, consumers can have a say in product development and virtually every other aspect
of the business.

• The Pepsi Refresh Project is a vast community that encourages consumers to stay engaged with the brand through cause-based initiatives.

• Tesco is famous for its prototypical Clubcard loyalty scheme, but has since branched out to provide a phone-based utility that makes the shopping experience easier and smoother.

All of these examples are proven ways that these brands have found to promote loyalty at all stages of the consumer journey. But how do you make it happen for your brand? Here are four principles to follow:

Consider every opportunity. Understand all the touchpoints with a brand and plot them out along your consumer journey. Be sure to include touchpoints beyond paid media — what about packaging or sales staff?

Clearly define the role each channel will play in the journey. This absolutely is not an exercise in “360-degree communications.” This is about prioritizing where a brand should be, not a laundry list of where it could be.

If you know where your brand should be, then you won’t be tempted by the siren song of the latest trend or fad. Certain channels are better at some communications tasks than others. What has worked for another brand to solve its business problem will not necessarily work for yours to solve your business problem.

No dead ends in the consumer journey. This is the beating heart of loyalty. Because loyalty is a seamless experience, encouraging a consumer along his or her journey with a brand, the communications plan cannot have any one-offs. Each piece of communication should lead a consumer smoothly to the next stage of the journey and not leave him or her wondering what to do next.

Measure the right things. Just because it is difficult to empirically measure or plot out the link between, say, awareness (or any other early stage of the journey) and repurchase doesn’t mean that the link doesn’t exist. But you have to be measuring the right things.

If a website, for example, is meant to build community (and hence loyalty), then there is no point in measuring the number of visitors that come to the site. It’s irrelevant. If you have defined the role of each channel clearly, then it’s easy to make sure you’re measuring the right things and to tell whether your marketing efforts have succeeded.

At the end of the day, we all want consumers to have relationships with our brands like the one I have with Lisa at my local ice cream shop. By thinking of loyalty as a component of consumers’ bigger-picture sense of commitment, brands will be able to build deep loyalty with their consumers.



	NOVEMBER / DECEMBER 2010


	The Big Picture

	*Loyalty is the connective tissue between the steps in a consumer's journey.*

	Whenever my family and I make one of our regular visits to the local ice cream parlor, I make sure we are served by Lisa. We’ve gotten to know Lisa over time — she’s working her way through community college and never fails to have a smile on her face. We seek her out. One night, facing long lines at the ice cream shop, we walked out of the store when we saw Lisa wasn’t working. It just wasn’t worth it. How did it come to this? Well, we like Lisa because she greets us, because she has punched an endless series of 10-punch loyalty cards for us over the years, and not least because she’s the server most likely to put an extra scoop on our cones. For my family, the act of getting ice cream has steadily progressed from a simple desire to satisfy our sweet-tooth cravings into a more complex transaction of expectations and need fulfillment. At what point does the switch flip? At what point does an ordinary consumer become a “loyal” one? And for that matter, what is loyalty? The run-of-the-mill “loyalty” program focuses narrowly on encouraging a consumer who has just bought a product or service to repurchase, whether through points, badges, a punch on a 10-punch card, or any number of other similar mechanisms. But loyalty should be considered more broadly — it includes the purchase-repurchase stage, but is not limited to it. Loyalty is a measure of a given person’s willingness to commit to a brand. Beyond buying the next ice cream cone, it also includes the degree to which I am willing to go out of my way to find Lisa and buy ice cream from her, to be willing to pay a premium and to be an advocate for a specific product, vendor or even scooper. If that broader definition is true, then the idea of commitment has broad implications for how we think about marketing. A brand is the sum of our collective encounters with and perceptions of it. All of these encounters are likely to be disconnected and interspersed with encounters with other brands. Our lives are not typically experienced in a linear fashion, and the accumulation of various encounters and experiences with brands can often contain conflicting bits of information. Our brains synthesize it all together, coalescing everything into a single consumer perception of the brand. Every encounter with a brand communicates something about it. And so every encounter a consumer has with the brand — from picking up the packaging, to dialing a call center, to reading about it in the news, to browsing an end-cap, to conversations with friends — has the potential to foster (or hinder) loyalty to that brand. Loyalty, then, is the string that connects these various brand encounters. Loyalty is, perhaps, something we haven’t had to think about all that much before the past decade, but it is more vital than ever. Cheaper technology and faster innovation cycles have commoditized so many categories, making it more and more likely that a consumer has only a tenuous relationship, at best, with most brands. And the consumer journey itself has fractured into a non-linear root system of choices and directions. Consumers have virtually infinite ways to research, buy, and advocate a brand along their journeys. Especially when playing in a commoditized category, it’s easy to reach for standard-issue loyalty programs — something with points, say. Airlines do it, as do hotels and grocery stores — even my local ice cream shop with its punch card. These are programs that are laser-focused on driving a consumer from purchase to repurchase. But even within this narrow section of the consumer journey, marketers today have begun to experiment with new methods of driving repurchase. For example, JetBlue recently has begun supplementing its frequent flyer program with a program that employs game mechanics. Similar to how Foursquare works, JetBlue awards points and badges for performing airport-based activities, such as checking into an airport terminal, and rewards point leaders with plane tickets and the like (Advertising Age, May 31, 2010). There are many more examples, but to underscore the fact that loyalty strings throughout a consumer journey, let’s look for examples of how marketers foster loyalty both earlier and later in the journey. First, at the beginning: With a little bit of diligence, marketers can set the stage for loyalty to take hold very early on. Consider Facebook’s nearly ubiquitous “Like” buttons, which have transformed the social media giant into “the loyalty card of the Internet” (Advertising Age, September 20, 2010). Using Facebook “Like” data, brands can tailor search results to a consumer’s very specific preferences, and guide them to products or areas that might appeal to them. Home Depot has begun using this data to tailor the consumer experience, making it far easier for consumers to continue on their journeys with the brands. They know that with the advent of price comparison utilities, like Red Laser, the consumer is less likely to commit to shopping at Home Depot, even after having set foot in the store. Taking a completely different tack, Zane’s Cycles in Connecticut goes out of its way to build relationships of trust and integrity with its consumers. The bike shop allows anyone to take a $6,000 bicycle for a test ride — without deposit or identification. Zane’s loses about two bicycles to theft each year, but has ridden faith in its consumers to a $13 million per year business (BusinessWeek, February 18, 2010). Innovative marketers have built loyalty through other points in the consumer journey in many ways: • The famously accommodating customer service at Zappos is a cozy blanket surrounding the consumer’s purchase experience and virtually ensures a repeat purchase. • The My Starbucks Idea program, allows consumers to feel like owners of the company — through this program, consumers can have a say in product development and virtually every other aspect of the business. • The Pepsi Refresh Project is a vast community that encourages consumers to stay engaged with the brand through cause-based initiatives. • Tesco is famous for its prototypical Clubcard loyalty scheme, but has since branched out to provide a phone-based utility that makes the shopping experience easier and smoother. All of these examples are proven ways that these brands have found to promote loyalty at all stages of the consumer journey. But how do you make it happen for your brand? Here are four principles to follow: Consider every opportunity. Understand all the touchpoints with a brand and plot them out along your consumer journey. Be sure to include touchpoints beyond paid media — what about packaging or sales staff? Clearly define the role each channel will play in the journey. This absolutely is not an exercise in “360-degree communications.” This is about prioritizing where a brand should be, not a laundry list of where it could be. If you know where your brand should be, then you won’t be tempted by the siren song of the latest trend or fad. Certain channels are better at some communications tasks than others. What has worked for another brand to solve its business problem will not necessarily work for yours to solve your business problem. No dead ends in the consumer journey. This is the beating heart of loyalty. Because loyalty is a seamless experience, encouraging a consumer along his or her journey with a brand, the communications plan cannot have any one-offs. Each piece of communication should lead a consumer smoothly to the next stage of the journey and not leave him or her wondering what to do next. Measure the right things. Just because it is difficult to empirically measure or plot out the link between, say, awareness (or any other early stage of the journey) and repurchase doesn’t mean that the link doesn’t exist. But you have to be measuring the right things. If a website, for example, is meant to build community (and hence loyalty), then there is no point in measuring the number of visitors that come to the site. It’s irrelevant. If you have defined the role of each channel clearly, then it’s easy to make sure you’re measuring the right things and to tell whether your marketing efforts have succeeded. At the end of the day, we all want consumers to have relationships with our brands like the one I have with Lisa at my local ice cream shop. By thinking of loyalty as a component of consumers’ bigger-picture sense of commitment, brands will be able to build deep loyalty with their consumers.


	ERIC PAKURAR is head of strategy and integrated planning at G2 USA, responsible for the G2 Pathfinder planning process across experiential, design, interactive, promotional, relationship and shopper marketing.

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