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    !"##$% ''

    It is probably the case that of everyone

    who reads this review the vast majority will have at

    some time or another signed up to a loyalty-

    marketing program. Be it air miles, credit card

    reward points, money-off vouchers or luxury gifts,5most of us are collecting for something whenever

    we shop. In the UK, for example, thousands of us

    think nothing of handing over our Nectar card when

    we shop at Sainsbury`s.

    But as customers, how often do we10actually cash this points in? How often do we feel

    really excited by what is on offer? Most

    importantly, how often do we feel our loyalties to

    these stores increases? Does not everyone offer a

    card these days? Are we not, in fact just bored of15them?

    When the first loyalty cards hit the

    market, uptake was huge and rewards for

    marketers very

    high. Not only20could a company

    help ensure acustomer came

    back to them

    over their25competition, but

    with the

    increased spend came a series of valuable data

    which refined their knowledge of who they were

    trying to sell to.30

    Consumers are evermore difficult to

    please, and uptake on offers is reducing. In the US

    the rate of membership growth slowed from 30

    percent in 2000 to 4 percent in 2003, and on

    average only a quarter of members redeems their35 promotional currency.

    Watching this downward trend, marketersfear the loyalty-card is on its way out.

    One repeated suggestion is that customer

    uptake is diminishing because the technology40involved is becoming too complicated. Although

    advanced means of collecting data can be highly

    useful from the company`s point of view, if this

    technology becomes central to the added value

    offered to the customers than it is unlikely they will45respond well.

    Yet in "Loyalty-marketing for the twenty-

    first century" Capizzi and Ferguson argue that this

    loyalty-marketing that takes advantage of current

    technology still has a lot to offer if only marketers50thought a little harder about how they put the

    program into practice. Customers are now well-

    versed in what these schemes are about, and there is

    a lot of market for them to choose from. However,loyalty-cards will continue to work well, provided55that the value proposition is attractive enough.

    This is the crux of Capizzi and Ferguson`s

    argument. Their belief is that imagination is now

    central to the ongoing success of this strategy. As

    consumers we are tiring of offers that ask us to60collect points in exchange for money off vouchers,

    standard gift tokens and uninspiring "toaster" - style

    presents. This is no doubt that this is one of the

    reasons why the rate of uptake of these programs

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    has slowed so much - customers are simply failing65to see the added benefit as enticing enough to keep

    them going back to the same store.

    What is lacking is what Capizzi and

    Ferguson label the Wow! Factor, which in mostcases means the offer of a reward with more soft70

    benefits. This could be an otherwise unobtainable

    experience, such as Harrods of Londons day with a

    top jewelry designer. For the wealthier customer,

    whose disposable income is any firms main target,

    these rewards are far more likely to attract than75money off schemes and low-value household

    goods.

    The obvious downside to all this, of course

    is that it costs money. Marketing departmens should

    be very careful to calculate their potential ROI to80make this kind of deluxe loyalty scheme work.

    Often the simplest answer is coalition.

    All over the world companies are now

    seeing the benefits of sharing set-up, processing and

    redemption spend of loyalty-schemes by partnering85with firms who offer complementary products.

    The trend is to focus on one group of

    society and bring together a band of services and

    products that most suit them. So ClubMom, inc. in

    90the US, for example, offers mothers the change to

    collate points earned at partners Farmer Jack

    supermarkets, JCPenney, Payless Shoe Source, Nine West Stores, Pier 1 Imports and Radio Shack.

    Covering technology, food, household goods and95clothing, this proves an attractive offer to many

    women, and in return they get spa visit,

    housecleaning services, romantic dinners and other

    such gifts chosen with the harassed mom in mind.

    The potential to set-up similar coalitions100to target students, those in retirement, the gay

    community and so on is huge. The trick with such a

    program is to be the first to market, to offer real

    value and not to overlook the weight of

    amalgamated everyday spend.105Loyalty-marketing still offers that list of benefits

    that first attracted firms over a decade ago. Yet in

    a changed climate with a weary consumer

    marketers cannot afford to be lazy in the way they

    think about this tried and tested formula. With their110tips as a starting point, Capizzi and Fergusons

    simple advice is "lead, follow or get out of the

    way".

    Strategic direction

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    !" $%&'()*'+,

    -./0 12304 23 5673544.2/4 ./ 895 8568 19.:9 :2335472/0 82 895;2

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    !!" $%$&'!($(

    )" &*+,-./

    &*+, 01* 0*20 +/+-. +., ,*3-,* -4 01* 456657-./ 80+0*9*.08 +:* 0:;* 5:

    4+68* @

    1. Consumers are evermore difficult to please. T F

    2. ROI (return on investment) is not important for marketing

    department. T F

    3. Consumers are pleased with offers that ask them to collect points inexchange for money off vouchers. T F

    4. The trend is to focus on one group of society and bring together a

    band of services and

    products that most suit them. T F

    5. Loyalty-marketing still offers that list of benefits that first attacked firms over a decade

    ago. T F

    6. Customers are failing to see the added benefit as enticing enough to keep them going backto the same store. T F

    A" B1:+8+6 C*:D8@ 05 6*+,E 05 456657 +., 05 /*0

    F+031 01* 456657-./ C*:D8 7-01 01* 35::*30 ,*4-.-0-5.8"

    a) to lead:

    1. to lead off something

    2. to lead something on

    3. to lead to something

    4. to lead up to something

    A to make something happen or exist

    as a result of something else

    B to begin an event by doing something

    C to make someone believe something

    that is not true

    D to come before something and be a

    cause of it

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    USAGE NOTE: lead , guide , and direct

    To lead means “to show the way by going first”: He led us down the mountain. To guide

    means “to show the way and explain things”: She guides tourists

    around the White House . To direct means “to explain to

    someone how to get somewhere”: Could you direct me to the

    station?

    b) to follow:

    1. to follow something around A to find out more about something

    2. to follow something through B to keep following someone

    everywhere s/he goes

    3. to follow something up C to do what needs to be done to

    complete something or make it

    successful

    c) to get:1. to get something across A to not do something you have

    promised to do or are supposed to do

    2. to get around to something B to be able to make someone

    understand an idea or piece of

    information

    3. to get in on something C to do something you have been

    intending to do for a long time4. to get out of something D to be able to make someone

    understand something difficult

    5. to get through to something E to become involved in something that

    other people are doing

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    !" $%&' ()% (%*( &+' &+,-%. ()%,% /0%,(12+,3

    1. What happened when the first

    loyalty card hit the market?2. According to the text, why are

    consumers so difficult to please?

    3. Explain the Wow factor!4. Which trend is present on the

    market, according to the text?

    5. What do Capizzi and Ferguson

    advise to marketers?

    4" 5,% ()% -2.', 1+ ()% 62* 2+7% (2 7289:%(% ()% ,%+(%+7%,

    6%:2-"

    1. The subject of the study is the level of usage of _____________ razors in the Third World. 2. ______________ is the amount of money you have after paying all your

    bills, taxes etc., that you can spend on things you want. 3. How did the killer _______________ his victims’ bodies? 4. “I don’t feel ______________ interfere in this argument, I have better things to do”, said

    Jenny to her parents. 5. The countries seem _____________ a conference at the EU headquarters in Luxemburg.

    dispose of disposable favorably disposed to

    disposable income disposed to

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    !"##$% '(

    Setting goals with your employees is anessential element of effective human resources

    management.

    There are a variety of reasons to set5employee goals. Goals can: focus employees on

    the purpose of your business; enhance your

    chances of success by applying your employees

    efforts to your company's long-and short-term

    success; and motivate employees. Employee10goal-setting is also an important part of an

    employee appraisal or bonus program because

    without goals, achievement is not easily

    measured. To be effective, employee goals must

    be clear and understandable. Each goal must be15concrete, attainable, and critical to the growth of

    your business. The tips below will help you set

    good goals: employees are often the best source

    for information about what job-specific goals

    will contribute to overall increased productivity,20responsiveness, or other business goal. Involving

    employees in goal-setting also eliminates the

    potential for the resentment that can arise when

    goals are imposed. At a minimum, do this

    halfway through the year to insure that goals still25make sense and that employees are on track.

    Don't set goals such as "Do a better job," becausea general goal does not instruct an employee in

    what steps to take. An example of a constructive

    goal is "Increase response time to customer calls30 by 30%" or "Cut customer complaints by half."

    Don't automatically assume that bonuses should

    be tied to increased sales or even profitability.

    For example, it may be most important in a given

    year for your business to cut costs or raise35visibility. Tie bonuses into that critical goal

    rather than one that is traditional. Many people

    have a tendency to set goals too high.

    Unattainable goals lead to employee frustration

    and lack of motivation and it is your job to make40sure that employee goals are realistic. Don't set

    different goals for employees the same

    responsibilities. Not only will this likely breed

    resentment, but it can put you in legal hot waterin terms of charges of discrimination. It's45

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    common for businesses to set annual employee

    goals at the beginning of the year. Others may

    want to do it before a busy season, or at an

    annual company meeting. Be careful to set

    employee goals and conduct evaluations on a50calendar year, not on employee anniversaries.

    This way, it will be easier for you to compare

    performance between people with similar jobs.

    You want your employees to work against your

    competitors, not each other. Avoid things like55contests as part of your goal setting. Instead,

    have your employees strive to meet a specified

    target within a specified period, and reward those

    who meet it. By doing this, you provide all of

    your employees with incentive to share60information and help each other. You might want

    to base financial incentives on the overall goals

    of your company. This can be used to encourage

    teamwork, and for everyone in the company to

    know that they are involved in your growth and65

    continued

    prosperity.

    For

    example,

    Levi70Strauss has

    set

    financial

    goals for

    the75company

    for the year

    2001; if the

    company attains that goal, it will be possible for

    each employee to get a bonus equivalent to their80entire 1996 salary!

    Build Your Business

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    !" $%&' ()% (%*( &+&,- &-' '%.,'% ,/ ()% /01102,-+ 3(&(%4%-(3

    &5% (56% 789 05 /&13% 7:9;

    1. There is only one reason to set employee goals. T F

    2. Employee goal-setting is also an important part of an employee appraisal or bonus

    program. T F

    3. Involving employees in goal-setting also eliminates the potential for the resentment that

    can arise when goals are imposed. T F

    4. Unattainable goals lead to employee happiness and satisfaction. T F

    5. Basing incentives on the overall goals of the company can be used to

    encourage teamwork. T F