FEBRUARY 2016 | An Independent Supplement by Mediaplanet to USA Today

DISCOVER the future of wearables and health engagement.

FIND out how gamifi cation unlocks new possibilities for your customers.

SEE how millennials are changing the face of loyalty programs.

Loyalty & RewardsLOYALTYANDREWARDSGUIDE.COM

Why the Golden State

Warriors’ legendary run

is fueled by fans at home

and also on the road.

Publisher Joe Addona Business Developer Stephanie King Managing Director Luciana Olson Content and Production Manager Lauren Hubbard Lead Designer Kathleen Edison Designer Kéziah Makoundou Copy Editor Sean Ryan Production Designer Jennifer Ledbury Contributors Dennis Armbruster, Jeff Berry, Kristen Castillo, Roberta Codemo, Zach Honig, Guy Kawasaki, Tammy Lucas Send all inquiries to editorial@mediaplanet.com Cover Photo Joe Robbins All photos are credited to Getty Images unless otherwise credited. This section was created by Mediaplanet and did not involve USA Today or its Editorial Departments.

2 | LOYALTYANDREWARDSGUIDE.COM | IN THIS EDITION MEDIAPLANET

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D on’t Be a stick in the mud. Are you having fun? Are your members? Games, videos,

interactive content, cartoons, funny social campaigns—there’s a whole world of ways to make loyalty more fun.

DO Mobile-ize. For most of us, smartphones are practically an appendage. Every aspect of loyalty should be optimized for mobile. Many programs integrate mobile some places—points notifi cation or redemption, perhaps—but fall short in others.

DON’T Assume silence is golden.In fact, dissatisfi ed customers who don’t speak up can cost a business dearly in loyalty and money. Recent research found that a typical retailer puts 16 percent of revenue at risk

Loyalty Do’s and Don’ts for 2016

Just because a problem occurs more frequently does not mean

it has the biggest impact.

from customer experience (CX) problems, and disgruntled consum-ers often stew in silence and exact their toll, like not coming back or badmouthing the company, later.

DON’T Forget old reliable. Stop acquiring loyalty members; you have enough, and chances are good you’re not creating meaningful relationships with them. Driving long-term retention of loyal mem-bers will lower your overall invest-ment. And, surprise, you’ll acquire new members through reputa-tion—not costly incentives.

DO Dig deeper. Not all customer experience problems are equal, and just because a problem occurs more frequently does not mean it has the biggest impact. Some issues have a higher correlation to loyalty behaviors. Put processes in place to better understand cus-

tomers’ pain points, then measure and monitor risks.

DO Keep exploring social media. Sure, it’s a veritable tsunami of con-tent, but the opportunity to connect with customers and build loyalty and, in turn, sales is unbeatable.

DO Get personal. A one-size-fi ts-all approach in loyalty or cus-tomer experience is long gone. One-to-one personalization is the goal, acknowledging that no two customers are alike. Predictive tools and data analytics allow for hyper-personalized relationships.

DON’T Go it alone. Partnerships (co-branded credit cards, teaming up with companies for short-term promotions, joining a formal coa-lition program) are the best way to create long-term, di� erentiated and meaningful value for customers.

Getting loyalty and great customer engagement right is a tricky recipe. These tips can help.

Building Brand Equity Away from Home

The Middle SeatA frequent fl yer pays her dues and reaps the rewards. See how the middle seat landed her an unforgetta-ble visit and love affair with Ireland. Online

What’s New?Leading voices from the rewards industry sound off on the new-est trends in customer engagement that come built to last. Page 4

Travel the World It’s no longer just a fantasy. Try these tricks to rack up thousands of rewards points without leaving the country Page 6

DO Keep it dynamic. Consider sending targeted o� ers to shoppers’ smartphones right in the aisle. Paired with iBeacon technology, these private o� ers allow on-the-fl y adjustments based on demand, inventory, time of day, customer value and more.

DO Court the mighty millennial. You were once their age, but mil-lennials aren’t simply you in a time warp. It’s crucial that mar-keters understand the needs of those born roughly between 1981 and 1997, a unique breed with dramatically di� erent ideas about consumerism and loyalty than other demographics.

DON’T Forget ‘Keep it simple, stupid.’ Getting loyalty right can be complicated, but everything needs to be seamless on the cus-tomer’s end. ■

Dennis ArmbrusterEditor-at-Large, Colloquy

As a customer, how would do you approach your own travel rewards program?

The most important thing to consider is the value proposition that the program o� ers you. Most customers join a travel rewards program because they want to travel. It is vitally important to ensure that the rewards pro-gram’s free night redemption thresholds are achievable and fair.

Some programs are 10 points for every dollar spent; some pro-grams are 1 point for every dollar spent. Depending on the pro-gram’s o� erings, the number of nights it would take you to get to a free night might seem like a good deal, but when you do the math that’s not always how it works out. It should be realistic to achieve these benefi ts.

The number of promotions plays a big role in this as well, as these allow you to build up your points much faster for your stays

towards a free night. Elite status should also be achievable, so that you can start enjoying the addi-tional benefi ts that come along with that status. Finally, there are a variety of other awards to look at, for example, redeeming your points for gift cards or merchan-dise. If these rewards are not in reach, you may want to consider a di� erent program that will pro-vide these benefi ts.

How has your professional experience helped you to see program members’ perspective?

In the hotel industry, customer loyalty is really defi ned by the engagement level of the customer with that brand. One key measure is how often the same guest returns to our properties, and the satisfaction that this guest has with their stay. One of the greatest challenges for all brands continues to be the ability to

deliver a strong guest experience every time, which is critically important.

Most guests belong to more than one hotel loyalty program. Many guests are members of sev-eral programs and have varied expectations, so it’s critical that as a brand we understand the needs of our loyal customers and deliver strong results.

How do you think this industry will change in the next three years?

As we know, this area is changing fast. Over the last year, we’ve seen rapid movement from desktop to mobile use in how people research and book their travel. Our goal is to keep mobile engagement with our brand simple and easy, removing any friction that may frustrate customers.

Customer personalization, where o� ers and incentives are more customized and relevant

to customers, will also continue to be very important to us and to our guests moving forward. In a world of change and the constant introduction of new and emerging technologies, it is easy for compa-nies to lose sight of what is really important: remaining focused on the needs of the customer. We pride ourselves on ensuring that any investment or enhancement we make will improve the travel experience of our guests.

Considering the other side, what’s most important to you as a rewards program professional?

I have learned that the most pow-erful way for a brand to drive guest loyalty is to provide incredible cus-tomer service at every opportu-nity. At the end of the day, despite the rewards program benefi ts or technology enhancements, what resonates most with guests is their overall experience with the brand.

The interaction and experiences that our guests have at our proper-ties—or with our customer service team—and the relationship and trust we build with our guests, is really what is most important and will continue to be the key driver of guest loyalty today, and throughout the future.

What’s your advice for professionals considering how they can scale their one-to-one customer relationships?

We focus on every guest, every time, with a clear commitment to always provide exemplary care for our customers. From our reservation specialists to our front desk sta� , we believe that every guest interaction is critical. Whether it’s fi nding a solution to a guest’s problem, or simply o� ering a smile, every opportunity we have to interact with a guest can build brand loyalty and ensure their experience with us is special. ■

Tammy Lucas of Best Western Hotels explains how you can get acquainted with your own rewards program as a consumer, plus personal insight for brands looking to make the most of their consumer loyalty.

4 | LOYALTYANDREWARDSGUIDE.COM | INSIGHT MEDIAPLANET

Nothing But Net and Loyalty

By Kristen Castillo

My Rewards: Mastering the Customer’s Perspective

Two veterans of the loyalty industry open up about what’s impacting rewards programs today, noting what’s helped, what’s hurt and what the biggest takeaway should be.

Jamie RussoVice President, Loyalty Programs

and Customer Engagement, Choice Hotels International

Bill LinehanExecutive Vice President,

Chief Marketing Offi cer, RLHC Leadership Team

When looking to join your fi rst travel rewards program, what is the most important thing to consider?

E nsuring you get out what you invest in the program, in both the short- and long-term. Can you

easily achieve rewards, or do you need to wait so long that there is not value for you? Then, are there redemptions and benefi ts that improve your everyday, your once-a-year, and your once-in-a-lifetime moments?

S houldn’t loyalty programs be all about the perks and benefits? When looking to join a rewards

program, the more important thing is to consider is if it’s worth it. Do you have to invest a lot of time to reap rewards or does recognition come immediately? Meaning, does the program cater to you or are you expected to cater to the program?

What are some of the biggest challenges right now in matching customers’ expectations?

Does the value proposition that the com-pany provides, coupled with the loyalty program, make me think twice before spending with a competitor? The biggest challenge I see is that loyalty programs now make rewards harder to achieve, so customers are less likely to believe that the value proposition works for them. We need to restore that value to the customer.

A loyal customer is one whose opinions and values are aligned with that brand’s posi-tioning. You know this to be true when the consumer becomes an ambassador for the brand. This only happens when the consum-er and the brand appreciate each other, just as any meaningful relationship where they both want to spend more time together. The challenge is in personalizing the program to each member as opposed to publishing all details of the program for everyone.

What shifts do you see in the mobile space when it comes to customer engagement?

Mobile now allows us to own the travel experience in a very positive way. But com-panies need to earn space on a customer’s device, so we must use mobile to uniquely solve travel needs better than anyone else. Loyalty programs can assist here. Instead of big redemptions once every few years, redemptions can be more often and be part of the travel experience.

Our mobile app is evolving, and no won-der! Mobile devices are the fastest growing medium and they’re transforming the marketing communications landscape across all industries, making it critical to adapt to behaviors we expect from our mobile devices. For example, we are adding the ability to use your phone as a key and we are communicating with Hello Rewards members, based on their geo-location, at any given time.

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“Fans know that they can help you win games,” says Warriors GM Bob Myers, “so it’s exciting.”

NBA champions, the Golden State Warriors, credit their passionate fan base with helping them win games. Danny Weinstein, a San Francisco mediation judge, has been a War-riors fan since the 1960s and a sea-son ticket holder since 1987.

“I was always a Warriors fan,” he revels. “I’m a basketball junkie.”

Heat checkThe team is hot now, having won the NBA Championship in 2015, but there was a time when Weinstein’s tickets weren’t in demand. These days he gets a dozen or more emails from friends looking to use his tick-ets. But the judge is holding onto his tickets overlooking center court.

Then there’s Rick Colsky, a sea-son ticket holder for over 40 years. “I’m a native San Franciscan and I love basketball,” he says, explain-ing the current team has great energy and dedication. “They’re so much fun to watch. They share

the ball and everyone’s involved on o� ense and defense.” His favor-ite player? Stephen Curry, whom Colsky calls, “part scientist, part showman,” a point guard that “takes your breath away.”

Meanwhile, Weinstein praises Curry’s “artistry” and is impressed with the entire team’s commit-ment to excellence. “It’s magic,” sums Weinstein. “To see people who actually play as a team and appear to have loyalty to each other and to the team is so rare.”

Like familyFans, especially season tickethold-ers, feel a familial bond with the team. “The owners are very fan-ori-ented,” says Colsky. “There’s never been a time when there has been more concentration on fans than there is now.”

The team shares their fans’ passion and appreciates their loyalty. “We have the best fans in the NBA,” Curry proclaims. “They bring the energy into the building, night-in and night-out, and are a part of our home advantage. We’re defi nitely excited to come here on game day because their excite-ment pushes us to another level.”

As forward Draymond Green explains, that excitement can even extend to the road. “Dub Nation sup-

ports us in every city we go to, and it’s amazing,” says Green. “The fans started a ‘Let’s Go Warriors’ chant today that drowned out the boos, and that’s becoming the norm now.”

Golden gratitude“Last year was really the best for many, many years,” refl ects Colsky, whose seats are behind the visiting team’s bench. “It’s excit-ing to see. Now the Warriors are the most-watched team.”

That fan base is diverse too. “It’s not all the same demographics. It’s not all the same backgrounds,” explains Bob Myers, the team’s General Manager. “It’s an electric, passionate group of people and what it all adds up to is the best fan base in the NBA.

“Fans know that they can help you win games, so it’s exciting.” ■

6 | LOYALTYANDREWARDSGUIDE.COM | INDUSTRY PERSPECTIVE

Earning Airfare with Your Feet on the Ground

F ortunately, there are plenty of oth-er ways to rack up thousands of points without ever stepping foot

on an airplane. The simplest (yes, most rewarding) options include credit card sign-up bonuses and regular spending, shopping for products online and even pur-chasing miles directly from the airline. With these tools under your belt, you’ll be flying for “free” in no time.

Credit card sign-up bonusesYou’ve probably seen the offers online or in the mail: You can earn tens of thousands of miles just by signing up for a credit card. In some cases, it really is that simple, but you should generally expect a min-imum-spend requirement as well.

For example, Alaska Airlines will give you 25,000 bonus miles without requiring you to spend anything at all. With American, however, you’ll need to spend a few thousand dollars before the promised miles will post to your account.

Credit card spendingOnce you get the sign-up bonus, you can continue to earn miles every time you swipe your card. Some cards and programs even offer special category bonuses,

You wouldn’t be alone in assuming that the easiest way to earn airline miles is by actually flying—but you would be wrong.

which let you earn even faster when you make purchases at cer-tain establishments, such as gas stations or office supply stores.

Online shoppingAnother great way to earn miles is by making purchases through your favorite airline’s shopping portal. Generally, you can earn

one or two extra miles per dollar, but sometimes that figure will jump up to 10, 15 or even 30 miles per dollar you spend. If you buy flowers for $100, you could end up walking away with 3,000 miles!

Purchasing miles at a discountFinally, another great option is to purchase miles from your pre-

Earn even faster when you make

purchases at certain

establishments.

Zach Honig Editor-in-Chief, The

Points Guy

ferred airline during sale periods. These opportunities come and go, giving you a chance to purchase miles at a fraction of the regular price. If you’re redeeming for inter-national business or first-class flights, you can get, say, five or 10 cents per mile in value for miles that you purchased for two cents or less. n

What’s Ahead for the Wide World of Wearables?

It sounds far-fetched, but with advances in wearable technology, anything now seems possible. And consumer interest isn’t likely to wane.

new report from Re-search and Markets predicts the global market for wearables

will reach $3.3 billion by 2020.

From the startMost of us have grown comfort-able with wearables, even if we don’t use them ourselves. Shop-pers with watches from Apple, Samsung and others pay for coffee through mobile payments. And there is no shortage of people

measuring steps walked, sleep habits and more with Fitbit and other bracelet devices.

But wearables have moved beyond the wrist. Developers are experimenting with every-thing from sunglasses to dresses to shoes that deliver and mon-itor data, provide notifications and Internet services, and serve as mobile payment platforms. Implanted chips (we already do this in pets to provide location services) or data-enriched tattoos

don’t seem as otherworldly as they once did.

On the horizon Coming later this year is a cock-tail ring that serves as a pay-ment device. Ringly jewelry is on the market as a notifications tool, allowing wearers to check updates from social media and other sites. Through a partnership with MasterCard, wearers will be able to point the ring at a contact-less reader to pay for sandwiches,

concert tickets and more. Also on track for late 2016 is

mobile payment capability on a General Motors key fob. And Samsung recently demonstrated WELT, a belt that measures ten-sion exerted by the wearer’s belly while also monitoring waist size, eating habits and exercise.

It all amounts to something to look forward to—or not. If you can’t refuse that second piece of pie, your nagging belt may just do it for you. n

Jeff BerryEditor-in-Chief, COLLOQUY

A

6 | LOYALTYANDREWARDSGUIDE.COM | INDUSTRY PERSPECTIVE

Earning Airfare with Your Feet on the Ground

F ortunately, there are plenty of other ways to rack up thousands of points without ever stepping foot on an

airplane. The simplest (yes, most rewarding) options include credit card sign-up bonuses and regular spending, shopping for products online and even purchasing miles directly from the airline. With these tools under your belt, you’ll be flying for “free” in no time.

Credit card sign-up bonusesYou’ve probably seen the offers online or in the mail: You can earn

You wouldn’t be alone in assuming that the easiest way to earn airline miles is by actually flying—but you would be wrong.

Earn even faster when you make purchases at certain establishments.

Zach Honig Editor-in-Chief, The

Points Guy

tens of thousands of miles just by signing up for a credit card. In some cases, it really is that simple, but you should generally expect a min-imum-spend requirement as well.

For example, Alaska Airlines will give you 25,000 bonus miles without requiring you to spend anything at all. With American, however, you’ll need to spend a few thousand dollars before the promised miles will post to your account.

Credit card spendingOnce you get the sign-up bonus, you can continue to earn miles

every time you swipe your card. Some cards and programs even offer special category bonuses, which let you earn even faster when you make purchases at cer-tain establishments, such as gas stations or office supply stores.

Online shoppingAnother great way to earn fre-quent flyer miles is by making purchases through your favorite airline’s shopping portal. Gener-ally, you can earn one or two extra miles per dollar, but sometimes that figure will jump up to 10, 15 or even 30 miles per dollar you

spend. If you buy flowers for $100, you could end up walking away with 3,000 miles!

Purchasing miles at a discountFinally, another great option is to purchase miles from your pre-ferred airline during sale periods. These opportunities come and go, giving you a chance to purchase miles at a fraction of the regu-lar price. If you’re redeeming for international business or first-class flights, you can get, say, five or 10 cents per mile in value for miles that you purchased for two cents or less. n

What’s Ahead for the Wide World of Wearables?

It sounds far-fetched, but with advances in wearable technology, anything now seems possible. And consumer interest isn’t likely to wane.

new report from Re-search and Markets predicts the global market for wearables

will reach $3.3 billion by 2020.

From the startMost of us have grown comfort-able with wearables, even if we don’t use them ourselves. Shop-pers with watches from Apple, Samsung and others pay for coffee through mobile payments. And there is no shortage of people

measuring steps walked, sleep habits and more with Fitbit and other bracelet devices.

But wearables have moved beyond the wrist. Developers are experimenting with every-thing from sunglasses to dresses to shoes that deliver and mon-itor data, provide notifications and Internet services, and serve as mobile payment platforms. Implanted chips (we already do this in pets to provide location services) or data-enriched tattoos

don’t seem as otherworldly as they once did.

On the horizon Coming later this year is a cock-tail ring that serves as a pay-ment device. Ringly jewelry is on the market as a notifications tool, allowing wearers to check updates from social media and other sites. Through a partnership with MasterCard, wearers will be able to point the ring at a contact-less reader to pay for sandwiches,

concert tickets and more. Also on track for late 2016 is

mobile payment capability on a General Motors key fob. And Samsung recently demonstrated WELT, a belt that measures ten-sion exerted by the wearer’s belly while also monitoring waist size, eating habits and exercise.

It all amounts to something to look forward to—or not. If you can’t refuse that second piece of pie, your nagging belt may just do it for you. n

Jeff BerryEditor-in-Chief, COLLOQUY

A

5 Social Media Essentials from Guy Kawasaki

Businesses Power up Rewards Programs with Gamification

The former Chief Evangelist for Apple and renowned Silicon Valley stalwart shares his list of tips for reaching customers and staying relevant in the social media economy.

Gamification, the newest buzzword in the loyalty industry, has caught on due to the heightened engagement companies are enjoying by incorporating gaming elements into non-game contexts.

Ask customers to submit pic-tures of your product or service in use by uploading with a special hashtag. Monitor this hashtag and then cherry-pick the best ones for sharing by your social-so-cial media accounts.

Provide one-minute videos that show how to optimally use your product or service. If you really want to do this right, create a You-Tube channel for your company and also upload the videos directly to your Facebook account.

Hire freelancers to create blog posts about topics that are per-tinent to your customers. These stories should be of general inter-est to people in your industry and should not be sell-jobs about your product or service.

Search online for every men-tion of your company and prod-uct. Respond to these mentions within 24 hours. The goal is to demonstrate that you care about the customer experience that your company provides.

Search also for every mention of your competitors and their prod-ucts and services. The goal here is to show these customers that you care about their business—perhaps more than their current supplier does. n

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T his multi-billion dollar industry is on its way to territory it’s nev-er seen before. “It’s on the verge

of growing in incredible propor-tion over the previous 20 years,” says Paul Gordon, the senior vice president of sales at Rymax Mar-keting Services, Inc., “simply be-cause you have a different audi-ence that is savvy now, in terms of smart devices. You’ve got dif-ferent ways to deliver the infor-mation to them, and you’ve got different ways to engage them.”

Choose your difficulty Businesses have to find creative ways to deliver their message and engage consumers. When a com-pany begins offering a rewards program, it first needs to give con-sumers bonus points for enroll-ing. “You give them a little skin in the game,” Gordon sums.

While it can’t be too challenging or time-consuming, at the same time the program has to be excit-ing enough for consumers to play. “People always have to be within reach of that next level,” adds Gor-don. “It drives them on to get even more things.”

Don’t overdo it Programs that offer a gigantic payoff that you work for all year generally aren’t successful. “You have to give them something

By Roberta Codemo

attainable pretty quickly to get them into it,” says Gordon. A pro-gram has to have different levels with various price points and have products that resonate with the audience.

“Not everything has to be a 42-inch TV,” he continues. “There are a lot of good, desirable prod-ucts that fall within the $25 price range for someone to put in their program. We live in a 100 percent branded society.”

People don’t want knockoffs or last year’s model; they work hard and want what’s desirable now —and that’s the most important part of the product selection. Says Gor-don: “This is where the future is.” n

Give them something attainable pretty quickly to get them into it ...

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