Dear customer, you are downgraded!

I recently received a mail from my favourite airline Jet Airways, that I have been downgraded! I am a member of their loyalty program for years now! And this is not the first time this has happened to me. It also happened in 2001 and 2002 too.

The letter read - "...since you have not had enough flights with us, you will be downagraded. Our Dynamic Tier Review (DTR) formula, unique to Jet Airways - DTR is an award winning, multi-period and multi-criteria-based tier review. It has no precedent anywhere in the world. With DTR, upgrade to the higher tier is quicker and tier renewal is easier. The DTR evaluates a member's tier based on Tier Points and Tier JPMiles earned....."

I was disappointed. As a customer, it did not matter to me if the DTR was award winning for Jet Airways! It surely did not work for me ( the downgrade letter was templated too with such high sound words and sentences!). 

It made me think about the structure of current loyalty programs across the world and their relevance when loyal customers like me are click away from the next best offer!

Here are some questions that came to my mind:

  1. In a year of recession and tough 2 years for business, I was suprised how the DTR did not take care of this business environment. I did'nt fly so much as Jet would have wanted. So, Jet's view of my loyalty is transcational - fly more( at full price or premium prices and get rewarded more!). I too will behave the same way in the future, I presume. Question #1: Can't loyalty programs be flexible, adapt to new environment, and why reward only transactional loyalty?
  2. Given the unsettling business environment that it was over the last 2 years, why would me even as a "fiercely" loyal customer, travel in Jet if the fares were not competitive. Finally, if there is no value, loyalty cannot be bought with points. Question # 2: When there is a challenge of intrinsic value in the product,  will loyalty progams deliver - No. It is better to focus on the product rather than upset customers. Companies must know, customers will move on in such circumstances!
  3. I have been surprised with their loyalty program  not paying attention to customer experience, in spite of being a Citibank-Jet Platinum card member. Every time redeeming their upgrade vouchers was a pain. The little travel that I did in these 2 years, whenever I presented the voucher, I was told it was applicable only on full price tickets! Funny, not sure what world they were living in. Question # 3: Do companies that run loyalty programs pay attention to  such little details that affect customer experience? They took trouble  a few years back to invite me to their co-branded card, but forgot to look at my spends and credits to give me waivers at such tough recessionary period.The bank has no clue, whatsover.

Loyalty programs are still in their 1.0 version.  Imagine a product that has not changed for 25 years! They still are in an old world order - "spend with us to earn rewards". Sometimes they have to recognize the value that customers get when they are out shopping for options, may not justfiy the reward they earn everytime if they have to stay within these products/brands. They need to transform given the new environment and options in front of customers.

Customer seek value and surely are willing to pay premium for loyalty but recognition, surprises and instant gratification will need to be weaved into these programs - on the assumption value needs to be earned in the customer's mind & wallet.

Rest assured, this is not a rant but earnestly these are thoughts that I had in my mind and coming out of experiences I have had with such programs over time.  



How will customers change their shopping habits with mobile?

With mobile device in the hands of customers and quick adoption of smartphones, will it redefine the shopping habits of customers? I believe it will. 

Mobile will increasingly act as research and shopping tool in their hands. Right now, I don't think it is widely used but with increasing app downloads & penetration, mobile internet adoption etc. this is certainly going to change shopping experiences - right from the way they search for products/brands/services and helping them choose & buy them too.

I believe it will  be a " check, learn, ask & walk "(CLAW) shopping model on the mobile. It will be a mix of ' text & mortar' shopping. Mobile will overtake internet shopping in my opinion and adoption of mobile in certain categories will be significant.

Which categories need to get ready for this change?  An nice study by emarketer can used as a benchmark by marketers to ensure they get ready for this shopping  habit transition. In countries like India, China & Japan where the mobile penetration & growth is high - the impact will be felt the maximum.




This mobile shopping habit will have to encompass a mix of mobile apps, call-in advisors, chats, mobile alerts, location based services, mobile coupon downloads & redemption@ the store. Marketers will have to plan for an Integrated Mobile Shopping Experience (IMSE). 




Exponential adoption not exponential growth is key in 2011 for marketing automation

I have been reading a lot of blogs, views of consultants & research reports over the last couple years on the growing need for marketing automation in companies to manage customers better.

This is an irony that has always suprised me - the companies that have made the marketing automation investments don't use them enough and the ones planning to invest don't really plan well on how to get enterprise-wide acceptance.

It was interesting for me read an article by Carlos Hidalgo

  • “Less than 25% of organizations that have implemented a [marketing automation platform] fully currently utilize its potential.”
  • According to a recent study, 78% of marketers state that generating high-quality leads is still their biggest challenge.
  • Various reports have between 70-90% of leads still being ignored and going to waste.

This was quite relevant points that corraborated with what I have been observing over the last few years.

Here's what I would like to see in 2011 for exponential adoption first,  lest marketing automation will die its natural death:

  1. Organizations must break-down silos and exponentially adopt marketing automation across various departments as customers don't do business with departments in companies!
  2. Determine metrics that are relevant to each of the departments and all these must roll-up to an enterprise-level metrics on lead management( lead capture, lead nurturing & scoring),  lead fulfillment and post-sales customer management.
  3. Practice byte-sized execution plans across mutliple customer-facing departments and clearly think multi-channel -  web,  mobile, call centre etc.
  4. Create a marketing budget across customer acquisition and customer retention and look at the ROI across both these parameters.
  5. Build a "marketing automation tree" across both acquisition & retention and determine when the grid-lock link breaks across various stages of customer interactions.
  6. Build a test and control group for various marketing automation campaigns to clearly benchmark success &  incremental lifts - to enable other deparments see the benefits for quick adoption.

To be successful, there must be a sound foundation, definition of the business process across marketing, sales & customer care - alignment across these departments  is critical &  key to exponential adoption of marketing automation across companies.

The right way for marketing automation to grow is to now focus on exponential adoption as it will act as the much needed catalyst for growth in the coming few years.