Loyalty Truth

The folks at RetailWire spark some great conversations – all of which are focused on retail marketing, but only some of which are loyalty marketing specific. I’ve been privileged to contribute to Retail Wire as a member of their Brain Trust, a name which still earns me some loving chiding around the family dinner table.

Last week the discussion was about “Napster moments”, those instances of change so profoundly momentous that industries are redefined and industry leaders are jettisoned with their place assumed by start-ups and other newcomers.

As RetailWire explained;

“These changes are happening all around us and in a multitude of industries. Newspapers, publishers and DVD rental chains, to name just a few, are being overwhelmed by changes that many saw coming a long time ago — changes that they could have been leading, rather than being annihilated by.”

From my recent study of the loyalty supplier marketplace and the growing inventory of loyalty software benchmarking accomplished with Mike Atkin and the Customer Strategy Network, I sense a Napster Moment coming for Loyalty Marketing.

Here’s what I mean:

1. With Consumer 2.0 defining customer engagement and loyalty strategies, how will suppliers fare whose model is based principally on “selling points” that can be later redeemed for merchandise, gift cards, and travel?
2. Which of the leading firms creating brick and mortar merchant networks will not only amass the numbers, but meet consumer demand to earn rewards, daily deals, and other promotional formats as they patronize their favorite local merchants?
3. With so much buzz about location based marketing, game based designs, and social posting, will it be industry “leaders” that capture the magic of Social Loyalty, or will the crown fall to a new wave of competitors?
4. As announcements of data breaches continue to grab headlines, will loyalty program enrollment be dealt a serious setback, or will leadership be taken to allay consumer fears and better articulate the high value of loyalty programs?
5. As increased customer engagement continues to be correlated to higher redemption rates, who will cope best with the new standards of loyalty accounting – seeking redemption instead of encouraging breakage?

The RetailWire discussion pointed out that Napster Moments “are particularly disastrous when companies or industries on the whole simply refuse to acknowledge that their business model or core product must change.” With great respect for colleagues, past employers, and competitors, I wouldn’t live up to the Loyalty Truth moniker if I didn’t speculate the coming of a Napster Moment for Loyalty Marketing.

Loyalty Marketing isn’t going away. Consumers continue to want goodies and recognition for their patronage. Brands need measurable and financially accountable marketing methods to drive results for their shareholders.

What is undeniably changing are the ways consumers are making purchase decisions, the way brands need to communicate with consumers to develop brand preference “ahead of the transaction”, and the means by which value is delivered to consumers in this evolving digital world.

By definition, a Napster Moment leaves in its aftermath winners and losers.

Be a winner.