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Loyalty World conference
London, November 2009

Rise of the big players

During the first week of November the European Editor of The Wise Marketer attended the 'Loyalty World 2009' conference in London; these are his personal reflections on the event.

This was the 7th Loyalty World conference run by Terrapinn in London. The conference had attracted a mixed audience of marketers from a variety of sectors; represented were retail department stores, finance, banking, travel, leisure, automotive, health & beauty plus the usual players from loyalty marketing agencies, media, suppliers and sponsors.

Rick Ferguson, Editorial Director of Colloquy, was chairman for both days of the conference and only passed the baton to Terry Hunt from EHS Brann for the last session of the conference. Rick introduced the conference to the idea of customer intimacy and the triumvirate of 'equity, continuity and dialogue'. As usual, Rick kept the event moving and probed the speakers for real insights into loyalty marketing from case studies and their experience.

This event started slow and built momentum. Will Shuckburgh from Nectar had the traditionally 'graveyard' slot of the final speaker on the final day but held his ground and audience with insights into the partner marketing programmes being built within the Nectar coalition loyalty program in the UK.

The key note address was entrepreneur Luke Johnson, famous for his themed restaurants brands and weekly column in the Financial Times. The focus of his commentary was the need for service delivery and insightful innovation to deliver a superior customer experience but these messages, whilst relevant in a general sense seemed a bit generic and did not address 'what's new and dynamic in the world of loyalty', which is probably what the audience was seeking. No criticism of Luke: he did his stuff very professionally and with passion but this felt like a slightly generic, low-key start to the event.

He was followed by Alex Hunter, ex-Head of Virgin Online and by the time he made this conference an independent consultant pushing his own message on the social media space. His references to 'Digg' and other frequently followed thought leaders in the social media space were no doubt very topical and knowledgeable but my impression was that the audience were actually seeking a more basic introduction to the key issues in what is a fast emerging but as yet poorly defined business model for loyalty marketers.

The pace picked up however and also became more focused on the conference topic with the majority of the speakers that followed. Ed Falconer from Myer, the Australian Department Store, gave a very lively and interesting presentation on the Myer customer loyalty programme, which has 4.3m members and covers 63% of sales within the brand. His key message was the market research-led approach to driving the programme and its connection to the information derived from the loyalty programme. His example of the life-cycle of men's clothing purchases moving from first proud outing in a social setting to eventual use as gardening clothing and then use as a cloth to clean the car seemed to resonate strongly with the majority of the female attendees at the conference!

Aubyn Thomas, Senior VP Marketing Services from Macy's in the USA, also gave an excellent day one presentation on the battle for space in the US consumer's wallet given an average membership of 14 customer loyalty programmes and only 3 or 4 likely to make it into the customer wallet. She covered a lot of highly relevant detail and shared insights that are a covered in more depth in her new book on 'Customer Inspired Marketing' and the quest to become the brand that consumers 'love'. Aubyn clearly knows her stuff and has a very strategic approach to the loyalty game. She started her presentation with a slide describing the 'consumer truths' of individualism, power and in-control and contrasted these with the 'loyalty truths' of ubiquity, lack of differentiation, lack of data analysis and the fact that loyalty is no longer just a plastic card. Whilst not entirely new thinking (Colloquy and the Wise Marketer have both published articles making the same points) the delivery was excellent and resonated well with the audience. The description of the Star Rewards program and its 4 tiers with increasing soft benefits was impressive in a programme with a claimed 24 million member base. The audience was left with a clear message on the value of customer data and insight when applied to the 21st century consumer.

Other highlight presentations from this two day conference included the Richard Bruce case study of how Homebase (a large UK DIY retailer) has partnered with Nectar coalition in the UK and migrated their previous solus brand loyalty card offer into the Nectar value proposition; the Marty Goldman case study on the revitalisation of the Harrah's Entertainment loyalty programme for London Clubs International; and Gary Twelvetree from Barclaycard giving some preliminary insights into the new Barclaycard loyalty programme that will launch in the UK in spring 2010. The programme will have Barclaycard holders auto-enrolled as members from day one; they will earn pounds not points (an intriguing approach); and he promised both scale and diversity of retailers. The Wise Marketer will follow this initiative and file a report when it launches next year.

The key theme of this conference however was that the 'big players' of the coalition loyalty marketing world are starting to make a move on a global expansion of their operational expertise. The key sponsors for the event were LoyaltyOne and Aeroplan and many of the speaker presentations followed a theme of being case studies related to the partner programmes that they delivered. Only Loyalty Partner from Germany was absent from the party although they have spoken at this event previously and Emnos, their customer insight division, was flying the flag in the sponsors hall.

Bryan Pearson, President of Loyalty One, told the audience to "go global, go green or go home" with a key message of the emerging trends of coalition partnership marketing, cooperative social networks, customer-centric marketing messages and the cause-related initiatives that are a response to customers' increasing movement into this space.

The other key theme of the conference was the emerging impact of social media on customer loyalty marketing. The most innovative application of how to blend social media into a real-time and interactive channel for customer feedback, loyalty and communication came from Starwood Hotels' Stephen Taylor. The statistics from his opening are food for thought for any loyalty marketer: 1 in 2 SPG (Starwood Preferred Guest loyalty programme) members has watched a video on YouTube, 1 in 5 follow blogs, 1 in 2 members log into a social network on the same frequency that they engage with the SPG web site and 1 in 4 visit social photo sites. These are not the sort of statistics that are easily dismissed as a passing fad by loyalty brand managers. His quotation from Eric Qualman that "successful social media companies act more like party planners, aggregators and content providers than traditional advertisers" was a thought-provoking observation for the loyalty marketing industry, which has tended towards an 'industrialised process' approach to building and running large scale consumer loyalty programmes. We may need more innovation, creativity and 'off the wall, outside the box'-type thinking to cut through to the modern consumer with loyalty marketing initiatives.

Overall this was a good conference in reminding the participants of the fast evolving consumer space in which a successful loyalty marketing initiative has to operate. The themes that dominated this year's event would have been thought very much for the future even a few years ago. Tomorrow has arrived today.

Peter G Wray

The author is managing director of pgw Ltd. This article was first published by The Wise Marketer, November 2009.

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