Posts

Two Reasons HENRYs are the Most Important Subset of Millennials

Before we get into the reasons why HENRYs are the most important subset of millennials, you might be asking yourself what millennial HENRYs are and why you should care.

It’s safe to say most people are familiar with the millennial generation, as they have been a hot topic for the past 10 years. The intensity of interest in them is growing as their purchasing power increases, soon to surpass that of the Baby Boomers. Tons of articles are published every day about how to engage with millennials, or how to incorporate them into your marketing strategy. Many companies have identified a need to connect with the millennial generation. A handful have defined an actual strategy around targeting and engaging them (seen a Diet Coke ad lately?).

The intensity comes from a reasonable place — a desire to tap into a segment of the American population with both a high disposable income and a lifetime value to a brand that could span decades. But there’s a problem — targeting a loosely defined group of 80 million people doesn’t exactly classify as a marketing strategy. The truth is — from top to bottom — millennials are the most diverse generation of economic significance in the US today. So we need to stop treating them all the same.

Within the diverse mix of college co-eds and minivan driving parents the secret to effectively leveraging this generation of consumers can be found by targeting one specific group known as the HENRYs. If you want to develop a successful marketing strategy, or develop a strong loyalty strategy, millennials are not your target. Millennial HENRYs are your target.

HENRY stands for High Earner Not Rich Yet. A HENRY is defined as: a household under 55 years old with an annual income between $100K and $250K, but that has not amassed investable assets of $1M. And while demographics for the term HENRY technically span 3 generations, the Millennial HENRYs are where brands need to focus for two core reasons:

1. They have a significantly higher budget for discretionary spending than Gen X or Baby Boomer HENRYs.

2. Young HENRYs are the most likely to become the brand’s most valuable customers both in terms of money spent & influence given over their lifetimes

So, how do you engage with this segment of consumers? What are their spending habits like? Download our white paper: Millennials are Not Your Target to learn more and gain strategies for engaging with this group.

The State of Global Loyalty: A Conversation about Turkey (Series)

The State of Global Loyalty: A Conversation about Turkey

What does customer loyalty look like outside of the US? How are companies around the world addressing the evolving challenges of customer retention? And what can US loyalty marketers learn from their global counterparts?

Welcome to our Global Loyalty Series! Seeking to find those answers, I recently posed questions to loyalty experts in our Maritz Global Partner Network, challenging them to offer insights unique to their regions around the world.

global loyalty, e-rewards This week, I connect with Enis Karslioglu, CEO of Sanal Magaza in Istanbul.

1.What are some of the biggest challenges companies in your region are facing when it comes to retaining loyalty program members? What opportunities do you see for these brands/marketers?

In larger scale programs such as airline companies and the banking industry, redemption is always a major challenge. In order to retain and convince the customers to come back, the rewards offered play a very important role in the programs. We highly advise to our customers to design the program to deliver related, high perceived value rewards, within a reasonable time frame to their target audience and program participants.

2. What cultural changes are you seeing in Turkey that are effecting customer loyalty?

Loyalty concept awareness is a big hurdle in Turkey. Offering high value rewards and a large variety of rewards is extremely important and challenging. Heading 3 different segments is a major challenge for our sales and marketing team with very little events.

3. What does customer retention mean to you? What does the ideal, loyal customer look like?

The ideal loyal customer is the customer who comes back often and makes new, frequent purchases with the brand. They are the member who engages new members and creates word of mouth about the brand in the market.

4. What do you believe makes a loyalty program successful?

The two main components of a successful loyalty program are creating a strong relationship with the consumer and increasing sales through the loyalty program.

5. What advice do you have for loyalty marketers?

  • Create your own permission based CRM
  • Engage your customers
  • Mine and launch individualized campaigns
  • Increase your penetration and sales

6. Are you a member of any loyalty programs? If so, which do you believe is the best loyalty program?

Turkish Airlines Miles & Smiles program is one of my favorite loyalty programs I participate in. I really feel rewarded and excited each time I spend my miles on ticket redemption. I also enjoy shopping in the www.shopandmiles.com Rewards Portal.

7. What is your wish-list for an ideal loyalty program? What would this program look like for participants?

First, an ideal loyalty program should be laid out on the proper technology. Rewards should be designed to fit perfectly to the target audience and program members. KPI’s should be set properly and aimed to be fulfilled from within the program. The program should be impressive and engaging enough to evoke the target audience to become members instantly and retain them for a long time. We aim to make every loyalty program create long-term value for both our customers and their customers.

8. How concerned are you about loyalty program fraud? Do you have any tips on how to be mindful of loyalty fraud?

Fraud is a major topic that should be taken into consideration at the very beginning of developing the program. Every measure should be taken both operationally and technically while developing the software, all the way to project launch. Correction of fraud later might create a big cost and tarnish the company’s reputation.

About Enis 

Enis, originally an Electronics Engineer from Hacettepe University in Ankara, has a wide experience in Media, including his past management of CINE 5, the biggest Pay TV of Turkey.  He received an Executive MBA at Harvard and participated in the General Management Program at the Kellogg School of Management at Northwestern University.

Enis established BIGGPLUS GROUP in 1999 and is the CEO of the group, including SANAL MAĞAZA INC. He has been focused on customer loyalty programs, E- Commerce and E-Rewards as well as merchandise development, carrying the company up  to  the leading position in Loyalty sector in Turkey, serving thousands of corporate clients such as Nestle, Unilever, P&G, Philip Morris, Axa Insurance,  Bosch, Goodyear, Coca Cola, Loreal, Turkcell, Ford, Shell, BP, Castrol, and Turkish Airlines, etc.

About Our Global Partners

Maritz  partners with top loyalty practitioners worldwide as part of the Global Strategic Partner Network.  Carefully vetted, trained in Maritz’ solutions and in regular communication with our solution leaders, Strategic Partners bring geographic market-specific expertise to our global clients.

 

The State of Global Loyalty: A Conversation About South Africa (Series)

What does customer loyalty look like outside of the U.S.? How are companies around the world addressing the evolving challenges of customer retention? And what can U.S. loyalty marketers learn from their global counterparts? 

Welcome to our Global Loyalty Series! Seeking to find those answers, I recently posed questions to loyalty experts in our Maritz Global Partner Network, challenging them to offer insights  unique to their regions around the world. 

This week, I connect with Barry Coltham, Managing Director for Achievement Awards Group, with input from Richard Cramer, Director of Loyalty.

Over the past 26 years, Barry has been instrumental in building the company’s deep expertise in automotive, banking, healthcare, and retail verticals and leading major research-based initiatives. Barry has a Master’s degree in Business Leadership and is a Certified Human Performance Technologist through the International Society for Performance Improvement.

 

As the Director of Loyalty, Richard leads a team of passionate loyalty marketers and analytics experts to deliver sophisticated, creative loyalty solutions. He is a veteran advertising executive with deep understanding of big brands, consumer psychology and relationship marketing. Maritz has been a shareholder in Achievement Awards since 2000.

1. What are some of the biggest challenge companies in South Africa are facing when it comes to retaining loyalty program members? What opportunities do you see for these brands/marketers? 

The major challenge is ongoing member engagement once programs have launched. We now have over 130 loyalty programs in South Africa, many that offer the same type of rewards. The value propositions have been watered down due to the on-going cost of running the programs which has resulted in member disinterest. Research by Truth Loyalty in 2017 found a decrease in the number of programs that women participate in, from 6.1 programs down to 5.6, as well as a slight decrease in the number of programs men belong to. If brands want consumers to stay involved with their program and frequently engage with it, something needs to change. The opportunity in South Africa is to go beyond rewards and to engender emotional connection and customer experience.

2. What do you believe makes a loyalty program in South Africa successful? 

A great value proposition and simplicity, the ease of use of a program, and surprise and delight rewards that are personalized and make members feel special. Another important element is the integration of programs with partnerships that are relevant and add value to the members’ lives. We can see in South Africa that the top programs are the ones that are easy to use.

3. What cultural changes are you seeing in South Africa that are affecting customer loyalty? 

There is a big transition over to mobile, and more people using internet on mobile phones than laptops and more mobile phones than the overall population. There is a fragmented, costly media landscape that does not reach rural poorer communities – mobile phones are the only way to access these members.

4. What’s the biggest piece of advice you have for loyalty marketers? 

There should be an understanding that you will have to increase sales by 6% to pay for the loyalty program. Most programs in South Africa reduced their value propositions because they did not factor in the cost of running the program. Employ a Specialist Implementation Agency and SAAS platform with experience in running the programs. The loyalty program is an integral part of the company’s DNA.

5. What is the impact, if any, of government regulations on loyalty programs in South Africa? 

There are two major legal acts that impact loyalty programs in South Africa: The Consumer Protection Act (CPA) and the Protection of Personal Information Act (POPI).

First, the CPA states that loyalty credits or awards are a legal medium of exchange (like cash) when suppliers offer it as consideration for any goods or services offered.  Because the loyalty benefits are legal forms of exchange, the goods given in return will also be subject to the CPA. This means that consumers are fully protected against defective, unsafe and hazardous products in the same way as a consumer who purchased goods and services with cash or on credit. Under the CPA, suppliers have a duty to ensure that the goods offered to consumers in loyalty programmes are in stock. In most advertisements you will hear the “while stocks lasts”, “subject to availability” or “terms and conditions apply” at the end, which suppliers believe cover them if they are not able to satisfy the promises made. The other major legal act, The Protection of Personal Information, refers to how loyalty programs process a lot of personal information and the processing of this information must be done lawfully.

About Our Global Partners:

Maritz partners with top loyalty practitioners worldwide as part of the Global Strategic Partner Network.  Carefully vetted, trained in Maritz’ solutions and in regular communication with our solution leaders, Strategic Partners bring geographic market-specific expertise to our global clients. 

The State of Global Loyalty: A Conversation about Europe (Series)

What does customer loyalty look like outside of the United States? How are companies around the world addressing the evolving challenges of customer retention? And what can US loyalty marketers learn from their global counterparts?

Welcome to our Global Loyalty Series! Seeking to find those answers, I recently posed questions to loyalty experts in our Maritz Global Partner Network, challenging them to offer insights unique to their regions around the world.

First up, I connect with Michael Lausenmeyer, Managing Director of Boost Loyalty Europe.

Michael is experienced in CRM & loyalty consulting, OMNI-Channel Marketing, and international project management and offers significant experience from the worlds of  retail, manufacturing, media, pharmaceutical, travel, finance, energy industries.

Michael, what are some of the key challenges and opportunities companies in Europe are facing when it comes to retaining loyalty program members?

One challenge is how to make members redeem their points and  how to keep them active in the programs. It is not so much that people quit the program, they even collect points, but they do not get involved enough to redeem points. There’s also the question of what to entice the members with. There is a tendency to focus on the short-term effect of monetary rewards, which only fuels the need for additional and higher discount measures and is therefore hardly sustainable.

We see great opportunity in digital solutions. Seamless collecting and redeeming of points via a personal device for one, but also engaging customers in new and different ways with new communication technology. Customers are much more inclined in sharing data when they get something in return.  Also, rewarding engagement has to be much more part of loyalty in the future. This personalized yet automated communication and attention to the individual customer is the key to activating them profitably.

What cultural changes are you seeing in Europe that are affecting customer loyalty?

In many European Countries there will be a further shift towards the use of individual handheld devices and even better coverage and faster connections. Brand and loyalty programs will be competing even more intensely for a place on the first screen of smartphones. There will be a shift in demographic with the Boomers retiring and a new generation of shoppers moving up. For them, monetary rewards are still relevant, but that is simply not enough to get close to the consumer of the future. New technologies and new loyalty concepts will be influenced by and will in return influence shopping and loyalty behavior.

How are European government regulations influencing loyalty strategies?

Changes in data regulations might have impact on the way personal data must be handled in the near future. There will be an optimization in Europe starting end of May. I cannot imagine there being less transparency in the future, but I would guess there will be many more security regulations that need to be met when handling customers’ data.

What’s your best piece of advice for loyalty marketers?

Stop doing loyalty like it was done ten years ago and don’t be led by personal preference. Adapt your programs and measures to your customer of the future not the current one.

Who do you see doing a great job at driving loyalty or consumer engagement?

I am member of several programs, but mainly trade or airlines. I really like the mechanism of Cookie Clicker though, because in my opinion, in its simple way this website applies pointers from behavioral science very effectively.

Finally, what is your wish-list for an ideal loyalty program for European consumers? What would this program look like for participants?

  • Relevant Service and information
  • Seamless applicability
  • Transparency in data use
  • Rewards for my time and contribution not just money spent
  • Impeccable technical set up and design
  • This program would put the participant first, giving them a reason to be part of the program.

About Our Maritz Global Partners

Maritz partners with top loyalty practitioners worldwide as part of our Global Strategic Partner Network.  Carefully vetted, trained in Maritz’ solutions and in regular communication with our solution leaders, our Strategic Partners bring geographic market-specific expertise to our global clients.

3 Trends that Rewrote the Rules of Loyalty Marketing in 2017 (Part 3)

(This is the third in a three-part series on shifts that occurred in 2017 that will have long-term impact on the loyalty industry. Part 1: Liquid Currency covered the adoption of pay-with-points solutions and Part 2: Loyalty Program Fraud covered the increasing awareness of program hacking risks.)

Shift #3: Coalition Loyalty Programs Stumbled

If you were one of the many loyalty experts predicting the likely failure of any coalition loyalty model in the US, you might have ended the year enjoying a bit of schadenfreude.

2017 was simply a tough year for coalition loyalty to catch a break.

While the dominant form of loyalty program outside of the US — one wherein members can earn and redeem points freely across a defined network of complimentary brands (the coalition) — a large-scale coalition loyalty initiative has never succeeded in the US. That seemed about to change when American Express announced the launch of Plenti almost three years ago. But since then we’ve witness not just the multiple stumbles experienced by Plenti, but challenges with both of its Canadian-based counterparts:

  • Plenti – While boasting more than 30 million members and the support of Amex, Plenti has struggled to attract and retain key partners to maintain a strong coalition. And it ends the year seeing the exodus of more partners and declining support from their parent entity. 
  • Air Miles – the Canadian-based coalition program owned and operated by LoyaltyOne suffered a significant PR hit starting late in 2016, when Canadian media began to cover the upcoming first-time expiration of Air Miles points. Due to overwhelmingly negative public reaction that continued into this year, Air Miles reversed their decision and agreed to reimburse members who had already dumped their points. That decision resulted in a multi-million dollar loss, much of that in unrealized breakage. The incident pushed some Canadian legislators to pursue legal restrictions on loyalty point expiration policies. AirMiles subsequently announced other changes to their program in an effort to gain back some of the member good will lost over their point expiration issue.
  • Aeroplan – the Canadian-based coalition program, owned by Aimia, was jolted earlier this year when its key partner, Air Canada, announced it was leaving the relationship by June 2020 to establish its own proprietary loyalty program, a move that could potentially cost Aimia millions of dollars in lost revenue and leaves their coalition program without an airline anchor brand.

So, as I noted — a tough year for North America coalition loyalty schemes.

Its the Consumer, Stupid

When I first wrote about Plenti back in March of 2015 I asked, “Is Plenti the holy grail of loyalty?” I outlined my rationale for being skeptical that a coalition could succeed in the US, while expressing optimism that if any entity could pull it off, it was Amex. My main concern was whether US consumers would actuality understand and embrace a coalition loyalty program.

New data from a Maritz 2017 consumer study only reinforced my concerns:

  • 50% of surveyed consumers said they were not familiar with Plenti at all (although of those who were, a majority had a positive or neutral view of the program). 
  • Less than half of self-identified Plenti members said they have ever redeemed for a reward through the program.
  • The majority of members said they only purchase from one or two coalition members (defeating the main value prop of the coalition model)

Amex might still put it out, but its just as likely that the stumbles experience by Plenti and the significant challenges with Aeorplan and Air Miles portend an inevitable decline of the coalition model the US.

Implications for Loyalty:

When Plenti debuted it was considered a potentially serious threat to proprietary loyalty approaches. Coalitions offer brands the allure of participating in a loyalty scheme without the up-front costs and commitment that can come with launching their own program. But the last year has shown the weaknesses of the coalition model, particularly in its inability to engage US consumers. And when you take into account the challenges with Canadian coalition schemes, it seems that many companies are making the calculation that they are better served by owning their own program where their brand rules supreme. Moving into 2018, its a safe bet that proprietary loyalty will continue to have strong hold over the US loyalty market.

Thanks for following along with our 3-part series – Maritz Loyalty wishes you a Happy New Year!