Is there a future in loyalty?

(photo thanks to atomicshed on flickr)

I'm working on a pitch just now where one of the questions is 'what is the future of loyalty programmes?'

When I started in this industry loyalty schemes were new and exciting and would save the world from bad advertising. Now they're increasingly commoditised and people now expect rewards on initial purchases in the form of cash-backs on sites such as ipoints or quidco. So where's all the loyalty gone?

So here's my quick and dirty predictions. Would love to hear other people's thoughts!

• Consolidation into a few large points schemes where people can see the benefit from buying products and services across multiple sectors
• Move from points into cash-back for these larger schemes (especially online aggregator schemes)
• Successful loyalty schemes will be those that are aligned to a holistic customer data strategy that enables brands to understand and connect more with people at a personal level
• Branded loyalty schemes will evolve to focus on enhanced experience of the brand’s product or service rather than discounted points converted into unrelated goods

Is ROI killing innovation?

Brent Hoberman (of lastminute.com fame) did the opening address at the Future of Digital Marketing 2008 conference today in London.

Presenting without PowerPoint, he took us on a lightening-fast and enlightening trek through his experiences, ideas and other random digital-related thoughts.

(It was a shame that the rest of the day couldn't live up to such a great opening... some of the presentations would have more appropriate at a 'past & current of digital marketing 2004' conference)

Brent knows he's been successful, but he wasn't arrogant enough to suggest he's an innovation genius. When talking about his newest innovation - mydeco.com - he was humble enough to suggest that there's still lots of learning to do. Some things that currently look like winning elements might not take off, and other simple ideas might end up being the killer app. Successful innovation comes from setting off lots of initiatives and ideas - not necessarily one 'big' idea.

So one thing Brent said really struck home - he questioned whether ROI can kill innovation. He wasn't saying that as marketers we shouldn't worry whether things are working or not - of course we should care about this. No, he was suggesting that the obsession with 'ROI' and 'certainty' will stop good and new ideas from happening.

How can you do something different and innovative if you need proof that it will work?

At worst this would mean only ever copying what you or your competitors have already done.

At best, proof can be 'found' by looking in different categories and piecing together 'evidence' from case studies that are similar to the strategy / idea that you're suggesting.

But history is written by the victorious. There are few case histories that demonstrate what hasn't worked. (Brand Failures by Matt Haig is the only real example I can think of). Looking within these 'case studies of success' from a source like the IPA Effectiveness Awards will quickly confuse you with success coming from apparently contradictory strategies for two different brands in the same category....

For me it comes down to the difference between efficiency and effectiveness.

Measurement and ROI analysis can only ever help you be more efficient. Spend your money again in places where it worked and take your marketing dollars out of stuff that doesn't. Good worthy stuff that we should all do. (Although I would argue that a red, amber, green model for 'should we do it again?' would simplify this process and prevent us having to wade through graph after graph of data analysis)

Improved effectiveness will only come from innovation. Doing something different to the category, different to the norm and providing some genuine value to the people you want to buy your product or service. Yes, measurement and ROI analysis can be one of the inputs into the innovation and ideation process, but 'proof' can never be found to justify something genuinely new.

So it worries me that whilst 2007 saw many agencies and businesses invest in innovation departments, job titles and descriptions, the current 2008 climate is seeing our friend ROI turning up to every party, with his close friends 'guaranteed' & 'proof' tagging along.

It's a party with lots of conflicting and loud voices. I just hope everyone can get along and innovation isn't ushered out the back door for being too unreliable...

Balloonacy

I loved the Orange Unlimited and never ending website that Poke created for them to help advertise their unlimited texts campaign. It was a simple but clever idea, beautifully executed, and certainly took up a number of hours of my time.

I think perhaps it was a bit of a decadent use of marketing funds, but I would imagine the 'engagement' box was well ticked with very long dwell times. (Though I'd like to see that stats on how it did in social media)

Well, I think they've surpassed themselves on the 'wish I'd done that' stakes. They've only gone and created a brand new concept:

The digital nomad.

The world's first internet balloon race. Choose a balloon animal (corresponding to one of their four 'segment' tariffs - camel, dolphin, racoon or canary, which are now being launched on pay as you go). Give it a name and a purpose and wait for the race to start. (22nd June)

So what happens?

You guide your balloon across the web - visiting different web sites and collecting points for its travels. There's some interaction as you get your mates to support you and give you a boost. And in Sonic the Hedgehog style, different websites have different power ups that earn you more points / distance. Each animal has different characteristics (temperament and speed) - though it's not clear how these will play out in the game.

A widget for your web site / favourite social networking site will give you updates and allow your friends to see how you're doing.

You can even submit your webpage / social media page for inclusion in the great web journey. So not only do you compete and interact - you get to help set the course as well.

The balloon that goes the furthest wins some big prizes. (Ibiza trip, reflecting the age group they're targeting). And there are daily prize draws for good performers. But with something as involving and potentially entertaining like this, it's not just the competing for the big prize that matters - it's the ability to get stats & feedback to compare with your mates for social kudos. (As well as look at the stats for numbers of visits to your web pages).

In fact, if I could make one suggestion to Poke, it would be to include the ability to set up mini-leagues with my mates so its easy for this group banter (perhaps using the social media widgets)

So it looks like a blast, and certainly deserves to have success in terms of likeability, WOM, and engagement. It also gives Orange a whole bunch of emails and data to play with for future nurture / prospecting and conversion.

I guess my only challenge to Poke is to keep the interest levels up in the lead up and during the actual race. They've sensibly restricted the fun to 7 days, and are now generating as much buzz as possible in the anticipation of the event. But having signed up today, I've only received a perfectly pleasant email. I want more!

Whether this will work in terms of PAYG sales, who knows. And in fact, I'm actually not a fan of Orange's overall strategy of taking their segmentation into full customer-facing marketing, but that's another post.

But great to see something brave, new and interesting.

(Thanks to Pete Petrella for pointing this out - a brilliant digital creative chap)

So was difficult worth doing?

So they did it.

3 minutes of tense times on C4, particularly as they struggled with the 'N'. And a nice moment, when we see 'hello mum' written in crude pen on the gloves of one of the sky divers. (Rather bad shot of the car though, but we'll forgive them that as it was live.)

2.2 M watched the live ad (Guardian). There was an increase from 2M to 2.2M when the ad was shown according to unofficial overnights. So a minimum of 200K actively engaged?

I managed to miss the 'live' event, but I guess that's not the point. It's about planning to be to be talked about too.

And is it working?

Well 52K hits on You Tube in 4 days. Who knows how many hits Honda have on their site.

Blog Pulse doesn't show a massive increase, but we'll see in the next few days.

Over on Creative Review, the comments are slightly flat.

Personally, I think in the world of PVRs, making appointment to view advertising is a good idea, and I admire W&K / Honda for their bravery. But it's interesting that the ad is linked to the Accord rather than just being a Honda brand piece. Yes, there's a shot of the car on the ground, but let's be honest, the product has nothing to do with the ad and vice versa. For me Cog was stronger as the product was intrinsically vital to the ad's success.

But they've got a long way to go to meet the 1M+ who watched cog on You Tube. It's going to take a lot for the live ad to go viral.

Will the ad make a long-term effective impact on people outside of the advertising community...?