According to the predictions of dozens of loyalty thought leaders in The Wise Marketer's latest report, 'The Loyalty Guide III', businesses now find themselves in an environment in which the opportunity to collect meaningful customer data is growing exponentially with new channels and increasingly direct contact. As a result, increased speed and supplier responsiveness will be something that characterises marketing efforts for at least the next decade, if not longer.

But Dr Jonathan Reynolds from the Said Business School at Oxford, UK, has also warned marketers that consumers are increasingly finding themselves in a world with "too much stuff", and that there are not yet enough products and messages that are being successfully personalised for the individual. Reynolds notes that there is a global trend of value and price deflation in all but a few luxury markets, and consumers are becoming smarter and better informed due to the price transparency effects of the internet. This of course means that they're also now seeking greater value, even though they are also becoming wealthier.

The growth of loyalty schemes around the world...
The loyalty market globally, in terms of both consumer and business to business (B2B) programmes, continues to grow rapidly with much new interest being seen in emerging markets. The growth of China and India is creating a huge new economic group of middle class and high net worth consumers. Developed markets in the USA, Canada and Europe are maturing and loyalty schemes that have been established - in some cases for decades - are now searching for new ideas and inspiration.

In developing countries, companies clearly do need loyalty programmes to gather insights for product and market development, but often not as urgently as they need more fundamental programmes to increase sales and acquire new customers. In a developing market, a coalition loyalty scheme is always a good option because the costs are relatively low, and they allow consumers to spread their spend in order to obtain a significant reward in a reasonable time while keeping reward costs in line with the slim margins often made in these markets.

The growing role of the coalition model...
The coalition loyalty model has a very bright future in all markets, too. Multi-partner and coalition programmes will become much more widely used and accepted, both by businesses and consumers worldwide - although some challenges exist in terms of geographic scale in some countries and markets. More international coalition programmes (like Air Miles and the EMV card-based SelektPoints) can be expected to spring up, and can be expected to begin with the expansion of existing national coalitions.

Coalition programmes offer many advantages which will become more important, both financially and in terms of consumer reach, as time passes. At the same time, loyalty networks (e.g. Rewards Network) are also expected to become increasingly popular. Being a 'loose coalition' they usually provide consumers with loyalty benefits or rewards at a great variety of outlets and merchant locations (as they don't provide sector exclusivity for participating merchants), also usually on a national or even international scale.

Insights for successful loyalty initiatives...
But one of The Loyalty Guide's key conclusions for the future development of customer loyalty initiatives in developing markets is that companies will need to segment their customers into tiers based on transaction patterns, and then offer 'soft benefits' (i.e. recognition, personalisation, and privileged access) as well as the usual 'hard benefits' that all members receive. This is a point of differentiation from competitors and a source of delight for customers who qualify for the extra perks.

The other key need highlighted in the report is the need for careful and ongoing training at all levels of employees, and the need for mystery shoppers who can test customer-facing employees' awareness of and enthusiasm for the loyalty programme.

The Loyalty Guide covers the future, present-day market, and history of customer loyalty programmes in detail, including almost 1,000 pages of solid loyalty marketing data, practice, and theory - everything you need to know in one report. It also explains customer loyalty and engagement, metrics, best practices, concepts, technologies, models and the latest tools and innovations. It's packed with detailed case studies, research, market sizes, forecasts, models, charts, illustrations, and materials to support new initiatives, presentations and proposals. Find out about the principles, practicalities, measurement, analysis, and bottom-line effects of customer loyalty, and gain expert guidance from dozens of loyalty marketing thought-leaders worldwide. Find out how to gather and use customer data to increase customer profitability, reduce churn, and to monitor and increase customer frequency, spending, and share of wallet. Most importantly, find out where competitors are succeeding or failing, and why. The complete executive summary, table of contents, downloadable samples, pricing and ordering information are all online at http://www.theloyaltyguide.com

The research broadly determined that in all four components of the 1-to-1 Marketing Framework (Identify, Differentiate, Interact, and Customise), the degree of 'radical change' will be high. For example, 80% felt that there will be signficant improvements in the capabilities that enable one-to-one marketing, and...

The survey found that only 30% of debit card holders have some type of reward, discount, or rebate associated with their card, and that the top two types of reward offered were cash rebates and coupons or points toward discounts...

More worryingly, only half of the companies surveyed that were aware of such losses of customers and sales had attempted to win that business back. A high proportion of respondents (65%) indicated that they had stopped doing business with a telecommunications provider due to...

If approved, the new arrangement will result in the reorganisation of the Fund's income trust structure into a growth oriented, dividend paying, global loyalty management public corporation, and the fund's units will be transferred into the corporation through a unit-for-share exchange. It is expected that the...

Although the study indicates that 80% of the executives strongly agree that customer strategies are more important to companies' success than ever before, many companies fail to design and deliver those strategies and, as such, lose out on customer commitment and loyalty...

Until next week,

Pete Clark
Co-Editor