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Article
Publication date: 7 August 2007

Rick Ferguson and Kelly Hlavinka

This article aims to examine US loyalty marketing industry size and analyzes growth trends.

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3198

Abstract

Purpose

This article aims to examine US loyalty marketing industry size and analyzes growth trends.

Design/methodology/approach

The article provides a discussion on COLLOQUY's benchmark‐setting measurement.

Findings

US loyalty rewards program membership has reached 1.3 billion, according to COLLOQUY research that provides the first comprehensive census‐taking of loyalty marketing since the modern loyalty era began with frequent flyer incentives in 1981. COLLOQUY's benchmark‐setting measurement, based on a fourth‐quarter 2006 analysis of a dozen business sectors, reveals that the average US household belongs to 12 loyalty programs. In a key finding, the COLLOQUY census shows that “active participation” in loyalty programs is a blended average of 39.5 percent across all sectors analyzed, a number that COLLOQUY experts characterized as “dismal.” Of the 12 programs per average household, 4.7 yield active participation. The census results raise a major question. Does the participation data mean the loyalty empire has reached a saturation point? The response from COLLOQUY experts: “Loyalty memberships are flying dangerously high. Fat membership roles may look good in a press release, but active loyalty program members are the only members who count.”

Practical implications

The loyalty marketing industry has experienced significant growth. Low active participation rates signal that millions of customer files in a database do not signify a successful loyalty strategy. Smart enrollment strategies should suggest a finite population of best or highest potential spenders.

Originality/value

The article provides proprietary business‐to‐business research on the size and scope of the US loyalty marketing industry.

Details

Journal of Consumer Marketing, vol. 24 no. 5
Type: Research Article
ISSN: 0736-3761

Keywords

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Article
Publication date: 26 January 2010

Rick Ferguson and Bill Brohaugh

The purpose of this paper is to remind loyalty marketers to harness the power of the often‐forgotten generation that truly values brand loyalty – the Baby boomers.

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1579

Abstract

Purpose

The purpose of this paper is to remind loyalty marketers to harness the power of the often‐forgotten generation that truly values brand loyalty – the Baby boomers.

Design/methodology/approach

The approach take the form of exploring Boomers' demographics and influence on the marketing community and outlining some of the best practices to which marketers can look when building programs and offers for Boomers.

Findings

By 2010, one‐third of the US population will be over 50; by 2020, one in five Americans will be over 65. In the near future, the oldest segment of the US economy will control the largest share of the US economy and marketers will be wise to make 50+ consumers visible in their marketing strategies. Boomers will find the brands that resonate with them and continue to fuel revenue and growth for years to come.

Practical implications

If one has established a relationship with Boomer customers and one has maintained the integrity of those relationships, they will stay with one for years to come. The biggest mistake one can make is to change one's offers and messaging to them just because they hit retirement age.

Originality/value

The paper presents exclusive interviews with representatives from some of the largest marketing firms in the industry today. Tangible tips and tools to utilize in the real world marketing plans are offered.

Details

Journal of Consumer Marketing, vol. 27 no. 1
Type: Research Article
ISSN: 0736-3761

Keywords

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Article
Publication date: 1 February 2006

The purpose of this article is to consider various loyalty‐marketing schemes to create an argument in favor of the continued use of such programs in the future.

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2731

Abstract

Purpose

The purpose of this article is to consider various loyalty‐marketing schemes to create an argument in favor of the continued use of such programs in the future.

Design/methodology/approach

Gives a brief synopsis of loyalty‐marketing programs.

Findings

Loyalty‐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.

Originality/value

Gives guidance to consumer marketers who use loyalty‐marketing programs.

Details

Strategic Direction, vol. 22 no. 2
Type: Research Article
ISSN: 0258-0543

Keywords

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Article
Publication date: 1 October 2006

Rick Ferguson and Kelly Hlavinka

This paper is aimed at describing how companies can find new opportunities for customer retention and lifetime value by applying the concepts of dialogue marketing…

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4002

Abstract

Purpose

This paper is aimed at describing how companies can find new opportunities for customer retention and lifetime value by applying the concepts of dialogue marketing, network‐building and relevant rewards.

Design/methodology/approach

The paper cites the work of Chris Anderson, Editor‐in‐Chief of Wired Magazine, and the work of Italian economist Vilfredo Pareto. The paper explains how the works of these two men, and how programs put into place at two companies (Hewlett‐Packard and Rain Bird), have opened new vistas in customer retention.

Findings

The study found that by applying specific marketing principles, companies can do a better job of retaining all customers, specifically those customers who are not in the top 20 percent of revenue‐producers.

Practical implications

Most companies believe that 80 percent of their business comes from 20 percent of their customers. However, by applying specific marketing principles, companies can do a better job of retaining all customers, specifically those customers who are not in the top 20 percent of revenue‐producers.

Originality/value

The paper takes a new look at an old principle (the 80‐20 Pareto Principle).

Details

Journal of Consumer Marketing, vol. 23 no. 6
Type: Research Article
ISSN: 0736-3761

Keywords

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Article
Publication date: 1 August 2008

Rick Ferguson and Bill Brohaugh

The purpose of this paper is to present an up‐to‐date examination of the telecommunications industry and attempt to discover how some of the major players are engaging…

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4972

Abstract

Purpose

The purpose of this paper is to present an up‐to‐date examination of the telecommunications industry and attempt to discover how some of the major players are engaging their customers while trying to constantly diversify their service offerings.

Design/methodology/approach

The paper examines, case by case, three major telecommunications companies and identifies current and future offerings as they pertain to service initiatives and customer loyalty and retention. The paper also offers a broader overview of the telecommunications industry as a whole and identifies some major trends in the current landscape.

Findings

The paper finds that companies with sound customer strategies can use this as a differentiator in an increasingly muddled market. In an increasingly competitive market, customer loyalty efforts can play a major part in the attraction of new customers and the retention of current ones. Companies must transition to offer a suite of services as “bundling” strategies proliferate and further ignite pricing wars.

Practical implications

Marketers dealing in the telecommunications arena are entrenched in an exciting era of industry growth. As consumers' choices expand, the importance of a sound customer relationship strategy becomes more and more important for the success of the company.

Originality/value

The paper provides exclusive interviews with representatives from some of the largest telecommunications firms in the industry today. It contains expert analysis and breakdown on loyalty marketing strategies that can complement telecommunications service offerings.

Details

Journal of Consumer Marketing, vol. 25 no. 5
Type: Research Article
ISSN: 0736-3761

Keywords

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Article
Publication date: 21 March 2008

Rick Ferguson and Kelly Hlavinka

The purpose of this paper is to use current loyalty market landscape data to examine differences in loyalty‐program participation among key consumer segments.

Downloads
1949

Abstract

Purpose

The purpose of this paper is to use current loyalty market landscape data to examine differences in loyalty‐program participation among key consumer segments.

Design/methodology/approach

Using data from the Loyalty Census research study conducted by COLLOQUY (JCM v24i5), this paper applies the information to six demographic segments of high interest to loyalty‐marketing practitioners – affluent, young adult, senior, core women, emerging Hispanic, and general adult – to determine rends related to participation, needs, redemption, and satisfaction.

Findings

The paper identifies the emergence of underserved and important demographic segments looking for attention in the world of loyalty marketing. The paper also establishes the new battlegrounds for loyalty programs in regards to rewards and redemption. Finally, the research reveals fresh strategies for marketers designing loyalty offerings.

Practical implications

Personalization is key to driving participation in contemporary loyalty marketing programs. Companies must identify the individual and tailor rewards, offers and benefits ‐ constructing a “difference engine” to serve all markets, build advocacy, retention and return on investment.

Originality/value

The paper further deconstructs the current loyalty marketing landscape and spotlights budding demographic segments previously overlooked or understudied. The text derives ten concrete suggestions from the data for building successful loyalty programs in today's changing market.

Details

Journal of Consumer Marketing, vol. 25 no. 2
Type: Research Article
ISSN: 0736-3761

Keywords

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Article
Publication date: 31 July 2009

Rick Ferguson and Bill Brohaugh

The purpose of this paper is to advise employers on how to recognize and reward their best employees in order to retain and motivate top talent during a recession.

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4086

Abstract

Purpose

The purpose of this paper is to advise employers on how to recognize and reward their best employees in order to retain and motivate top talent during a recession.

Design/methodology/approach

The paper explores, with commentary from leaders in the marketing industry, business‐to‐employee marketing (B2E) and employee incentive programs as a means to enhance employee loyalty and customer service.

Findings

Good people retain career mobility even in tough times; simply having a job is not a sufficient employee motivator during tough times. Retaining your top performers pays out both in the short term, by helping to avoid Circuit City‐style meltdowns, and in the long term, by retaining their expertise, skills, contacts and relationships.

Practical implications

By rewarding employees as businesses would consumers, marketers can enhance their employees' work experience and thus expand their bottom line.

Originality/value

The paper has exclusive interviews with representatives from some of the largest marketing firms in the industry today and provides tangible tips and tools to utilize in the real world.

Details

Journal of Consumer Marketing, vol. 26 no. 5
Type: Research Article
ISSN: 0736-3761

Keywords

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Article
Publication date: 27 March 2007

Rick Ferguson and Kelly Hlavinka

This paper aims to examine the banking industry's expanding use of loyalty marketing programs to build profitable relationships with customers. Banks'…

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4609

Abstract

Purpose

This paper aims to examine the banking industry's expanding use of loyalty marketing programs to build profitable relationships with customers. Banks' relationship‐building strategies fall into two categories: full‐blown multi‐product loyalty programs and narrower programs that expand customer rewards in one or two key product areas.

Design/methodology/approach

Innovative loyalty programs launched by various banks are used as examples to show how individual banks are customizing their relationship‐building strategies within the two broad categories. Those categories are broad multi‐product loyalty programs and narrower initiatives focused on key products.

Findings

The authors believe their deeper look into relationship banking reveals that, far from a magic bullet approach, banks are customizing their relationship‐building strategies to create value propositions as unique as the institutions and customers they serve. When banks use loyalty programs to engender trust and build confidence in the brand, the customer relationship will develop organically, and so will profits.

Practical implications

There is no core list of best practices for relationship banking. By examining innovative programs and being willing to customize their strategies, banks can build enduring customer relationships that lead to growth.

Originality/value

This paper takes a look at relationship banking trends, with suggestions on how banks can incorporate these trends into successful, customized programs.

Details

Journal of Consumer Marketing, vol. 24 no. 2
Type: Research Article
ISSN: 0736-3761

Keywords

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Article
Publication date: 4 May 2010

Rick Ferguson and Sharon M. Goldman

This paper seeks to encourage loyalty marketers to embrace cause‐related marketing.

Downloads
2499

Abstract

Purpose

This paper seeks to encourage loyalty marketers to embrace cause‐related marketing.

Design/methodology/approach

The paper explores companies which have used or are using cause‐related marketing, from McDonald's 1984‐established Ronald McDonald House to the newer LIVESTRONG campaign, and examines which programs’ successes, failures and consumer reactions.

Findings

According to the 2008 Edelman goodpurpose study, 63 percent of consumers think companies spend too much on marketing and advertising and should set aside more for a “good cause”. Even during a recession, the study adds, 80 percent of global consumers think it is still important that brands and companies set aside money for a social purpose. A recent survey of 9,000 consumers worldwide by Boston Consulting Group indicates that, despite the economic downturn, buying green products remains a priority – a majority of respondents in all countries expressed a willingness to pay a premium of 5 percent or more for green products, and 73 percent considered it important that companies have good environmental records.

Practical implications

Today, cause marketing is more than just a trend – it is an imperative. What began as a simple way to build brand affinity has become a consumer expectation in an era in which sustainable and ethical consumer choices are more important than ever before. And within that framework, loyalty marketing tactics are at the heart of creative innovation.

Originality/value

The paper presents exclusive interviews with representatives from some of the largest marketing firms in the industry today and offers tangible tips and tools to utilize in the real world marketing plans.

Details

Journal of Consumer Marketing, vol. 27 no. 3
Type: Research Article
ISSN: 0736-3761

Keywords

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Article
Publication date: 2 May 2008

Rick Ferguson

The purpose of this paper is to study examples of emerging marketing trends like word‐of‐mouth and viral marketing, and attempt to determine their measurability in terms…

Downloads
50848

Abstract

Purpose

The purpose of this paper is to study examples of emerging marketing trends like word‐of‐mouth and viral marketing, and attempt to determine their measurability in terms of return on investment (ROI).

Design/methodology/approach

The study examines real life campaigns from well‐known companies and attempt to measure consumer response beyond merely viewing or participating in the campaign. How much of an actionable response can be evoked and measured from viral and word‐of‐mouth campaigns? Testimonials and commentary from marketers practicing these methods and the pundits that attempt to gauge the effectiveness.

Findings

The paper finds that word‐of‐mouth or viral marketing efforts are not always a sure bet. But a well‐placed, calculated and provocative campaign can spark a firestorm of buzz that sometimes can be effective for years in non‐terminal new mediums like the internet. While the jury is still out on finding hard quantitative ROI measurements for these campaigns, they can produce hefty returns for brand awareness.

Research limitations/implications

Tracking ROI for viral marketing and word‐of‐mouth marketing campaigns remains an inexact and difficult science.

Practical implications

The paper suggest following the included Viral Commandments when creating a word‐of‐mouth campaign to ensure marketing resources are put to highest and best use. It also suggests focusing on identification of the consumer as a vital step to build advocacy. Viral marketing should not anchor marketing strategy, but when used effectively can be an important ace‐up‐the‐sleeve.

Originality/value

The paper explores some recognizable viral marketing campaigns and studies the effects they had on product sales, consumer advocacy and brand awareness. It teaches important factors to consider when developing word‐of‐mouth marketing: who is doing it well, who is not, what lasting effects can a campaign deliver, and are there any effective ways to measure return on investment?

Details

Journal of Consumer Marketing, vol. 25 no. 3
Type: Research Article
ISSN: 0736-3761

Keywords

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