Loyalty Truth

After spending the last few weeks thinking through reasonable responses to my new favorite question for 2010 “Do you think Social Media is here to stay?“, I’ve recently been re-directed to my “old” favorite question that I have been answering for 12 years “Do loyalty programs work?”

Without disappearing completely down that gopher-hole, I’ll just say that there is enough discomfort in using the “L” word that industry insiders are redirecting the conversation to new labels. Is it any wonder why Customer Engagement has been the buzzword of the year?

Lifecycle marketing in the credit card business has always hinged on the “Activation, Usage Retention” triad. In retail, there is a similar flow with “Awareness, Visit, Purchase, Return“.

I believe that within these lifecycle flows, Customer Engagement has always existed. Activation can be broken down into Awareness & Engagement leading to Activation. You get the idea.

So why is Customer Engagement being given so much attention these days? Maybe because marketers have always found it one of the toughest steps to effectively manage in the relationship value chain. And, maybe it is because in 2010 the job is increasingly difficult as consumer attention spans are shrinking each day.

Not too long ago, I went to see the end-times movie “2012” and the challenge of customer engagement was made crystal clear. As the final scene faded out, the entire theater full of patrons jumped to their feet and headed to the exits. As I sat comfortably watching the credits scroll by, I noticed that I was literally one of three people still in my seat. I had noticed this behavior before, but finally connected some dots.

You see, consumer attention spans have been shrinking for several years and the pace of shrinkage shows no sign of slowing down. The question is: how do marketers hope to create and maintain “customer engagement” when “customers” (us) can barely pay attention long enough to change the channel?

With tongue only slightly in-cheek, I believe the slide in customer attention span all started with USA Today. The snippet-based paper lowered the bar for people to gather their news, requiring them only to read a paragraph or two and then turn the page. After a while, reading a news story in the New York Times seemed like sitting down to crack War and Peace.

The die was cast and a new standard was set for how consumers gather their news – short entertainment-driven sound bytes that could be absorbed while multi-tasking negated the requirement for thought or analysis. Now we have a “crawler” on everything from CNN to ESPN to summarize our news for us, and we are sharing our subjects of interest with friends through quick SMS messages and IM blasts. Even the outflow of natural disasters as recently occurred in Haiti are threatened by our short attention span.

Compress the communication further by limiting our messages to 140 characters on Twitter and it is clear that there is more emphasis on the announcement than the content inside. In the business world, we are increasingly asked to summarize key thoughts and initiatives into “one pagers”.  Weeks & months of work on strategic plans are being distilled into executive summaries that are shorter by the day. It almost seems as though even a brilliant business plan or strategy is doomed unless there is an effective elevator speech to go with it.

The trends we have seen in Loyalty Marketing include members who want to achieve award status quicker and redeem more often for smaller “attainable” rewards. Converting points for cash back certificates at the point of sale is high on the list for many program operators.

If you agree that attention spans are compressing daily and our own internal communications are being driven by 3 PowerPoint slides and a “one pager”, what tactics can we hope to successfully employ to engage our customers?

I think the answer is two-fold:

• First, we can go back to social media – as we might just have to meet people “where they are” rather than hoping to bring them into our web, our way.
• The second is to never forget that every house has a kitchen table or something akin to it. People still gather and enjoy each other’s company in informal settings. Putting a catalog or brochure on their kitchen table gives them something to talk about – YOU. Personalizing that catalog based on known behaviors makes it even more of a conversation piece, once opened.

Pairing these two unlikely partners – Social Media and Direct Mail – might just work. Give it a try.