3. Socialization

4. Gamification

5. Monetizationare changing the face of loyalty marketing* * and how these forces together drive today’s key trends in customer engagement Howard Schneider MetznerlSchneider Associates

6. Disintermediation

7. One of the biggest words I know the elimination of an intermediary in a transaction between two parties

9. Airlines did not know their customers by name

10. AAdvantage was launched as a promotional tool to get customers to identify themselves…NOT as a reward program

11. Travel, hospitality, car rental companies established direct relationships with their customers

12. Banks and some retailers, who had transactional data, soon followed

13. Retail, restaurant and others jumped in as technology and cost permittedLoyalty programs turn 30 this year!

14. Indirect distribution models Today, some of the fastest growing categories for loyalty programs are those with indirect distribution models Media companies, studios, manufacturers, CPG companies are turning to loyalty and engagement programs to create one-to-one customer relationships for the first time.

16. Customers not interested in studio “brand”

18. Rewards interactions and transactions

19. Allows fans to customize their experience

22. Marketing efficiency continues to increase

23. Measurability and accountability continue to spread, into categories accustomed to less-precise metricsLook for more loyalty and customer engagement programs from marketers who are new to the world of direct customer relationships.

24. Monetization

26. Segments / visits

28. Rewarding past, not future, behavior

29. Rewarding without clear value metric

30. Unhappy customers

31. Decreasing reward availability

32. Blackouts and restrictions

34. As easy as “supply and demand” As easy as “supply and demand” Elevate is the first revenue-managed program of its kind that provides choice, value, and a dynamic approach to enhance ROI. 15 Days Advance Higher ROS Lower ROS 14 Days Advance Near Parity Near Parity

35. More than just a reward program. It’s an experience.

37. Other categories are actively exploring how to use the revenue-management model for their loyalty programsLook for more loyalty and customer engagement programs to deliver incentives, rewards and value based on precise knowledge of customer value.

38. Socialization

40. Skepticism

41. Infatuation

42. Evangelism

43. Overuse / misuse

44. Disenchantment

45. Sooo last yearEventually, each finds its optimal role in an ever-evolving mix of media, strategies and tactics. Today’s social and mobile media are uniquely suited to play a major role in loyalty and customer engagement. Social media are an important tool for disintermediation and delivery of customized value and relevance.

46. Why would I “like” a fabric softener?

47. A sleeper strategy helps Downy and Macy’s clean up Event marketing, demonstration-chic, comedy, advertising, and the most basic of DM tactics: customer acquisition, all enabled by Facebook and Twitter. Voila: a CPG company now has a database, while Macy’s boosts January White Sale traffic.

48. And the results? Now, a CPG brand can begin building direct relationships and fostering loyalty.

49. Finding the “needles in a haystack” brand devotees Sears and Kmart launched the fastest-growing loyalty program in history – over 60 million customers joined shopyourwayrewards in the first year! The program lets Sears track members’ spending and deliver targeted information and offers to drive and reward transactional behavior. But these great old American brands wanted to get members involved in a personal way.

50. Driving social participation, not just transactions The program rewards social activity, like joining Sears and Kmart branded communities, sharing reviews, uploading photos.

52. 5.7mm viewsThis promotion built awareness of and participation in the SYWR program, and reinforced the value of points.

54. Invaluable WOM

55. Identification of brand fanaticsSocial media are a fait accompli, and play a role in virtually every successful loyalty program today.

56. Gamification

57. Reality IS broken Games aren’t a panacea for our broken world, or our marketing and customer loyalty challenges. But they sure can help engage customers. As loyalty programs have become ubiquitous, they have lost some of their power to motivate behavior and differentiate brands. There is an increasing need, driven by both marketplace psychographics and program economics, to reward non-transactional behavior. …and you may ask yourself: “You said programs should be based on revenue. Now you say programs should reward non-transactional behavior. WTF?”

60. Sharing something with a friend

61. Answering a survey

62. Posting a photo, video or comment

63. Visiting a website, watching a trailer or demo

65. Bragging rights

66. Reinforcement

68. …on the road… Subaru allows owners to “reward themselves” and get recognition for longtime loyal ownership, and for identifying their lifestyles and interests

69. …and online Members earn points for purchases, credits for activities Rewards are listed in separate catalogues — points can be redeemed for merchandise; credits cashed in for virtual or digital rewards such as avatars —ringtones, wallpapers, exclusive video clips or music

71. More ways to engage on the customer’s own terms

72. More economic leverage for marketers with more ways to reward behavior without giving away the storeEven legacy brands and well-established categories will increasingly incorporate gaming tactics to make their programs fun and engaging.

73. Disintermediation, Monetization,Socialization and Gamification

74. Thank you! Howard Schneider Metzner l Schneider Associates