Loyalty Marketing: Who is loyal to whom? And why?


Once upon a time, “Loyalty” in advertising was an insider term like CRM, CPM, database, quintile, RFM and so on.

You might have run a loyalty program back then but you didn’t call it that in public. If it was called anything, it was a Rewards or Thank You Program.

Loyalty programs have been around forever, it seems. The earliest I remember was Steinberg’s supermarkets’ Pinky Stamps in Montreal. It was the same kind of thing as S&H Green Stamps in the US.

My Mom got a whole bunch of little pink stamps, sheets of them, from the supermarket when she went shopping for our family of eight, six kids and a Mom and a Dad. When she had time, she’d paste them all in little books and when she had enough books, she’d bring them back to the store for … something. She got a lot of kettles, teapots, glasses and casseroles over the years.

You still occasionally see old fashioned loyalty programs like that. The most common is a punch card. You get a card with your name scribbled on it and it’s punched every time you buy, say, a coffee at a Mom and Pop shop. When the card has 10 holes in it, you get a freebie coffee. Simple.

We launched a basic (and extremely effective) loyalty program for Ford of Canada back in the ‘90s. It was new and worked great. All we did was send a coupon (we called it a Certificate) for anywhere from $200 to $1,500 to owners of three year old or older Fords and Lincolns.

Walgreen’s Drug Store (Duane Reade in New York City) has a very simple form of cash rewards. You just enter your phone number on an ATM-like pad whenever you buy anything and discount money adds up in your account. You can spend the accumulated money only at Walgreen’s when you buy something.

The general idea of all of these programs, from Pinky Stamps to frequent flier points to credit card rewards is to keep the customer coming back for more. And, until now, there has always been a direct customer→seller connection.

Watching a new hotels.com commercial the other day, I was struck by a big change. You can get “points” no matter which hotel you stay at as long as you book through hotels.com. The commercial spells it out clearly with the line “a loyalty program that doesn’t require loyalty.” It also requires no connection to the seller, in this case, the hotel that delivers the service.

And therein lies a problem that has been building since companies started saying “loyalty” out in the open.

Who is loyal to whom? And why?

It seems that hotels.com thinks the customer is loyal to the company, based on nothing more than a tenuous cyber-connection. This is a reverse-breakthrough. Until now, the customer could at least pretend that the company was loyal to her. It would be nice if that were true.

Most annoying major-company commercial ever?


It’s from Allstate and it manages to insult men and women at the same time. It’s so bad that even the transgendered will be annoyed.

A young couple is in a restaurant. The woman says “Remember when you said ‘men are superior drivers?

Yeah,” says the guy.

Woman reaches into purse, removes a piece of paper. “Then how I did get this Allstate safe driving bonus check?

Blah, blah, for a few seconds then, in her best passive-aggressive cutesy voice, she says: “But I’m a woman. Maybe it’s a misprint.

She holds the check at the man’s eye level, then “Do you think it’s a misprint?

Allstate spokesman voiceover says: ”Silence,” in a tone that leaves no doubt Allstate agrees men are idiots.

In 30 seconds there are more flaws in this commercial than in a typical two-hour James Cameron epic.

The basic premise starts off flawed. No guy in his right mind would say anything like “Men are superior drivers” to a woman, especially a woman he likes, unless he added “… to boys” or “in NASCAR, Indy, and, especially, Formula One.

The woman takes it personally, clearly not grasping the difference between the general and the specific. Perhaps her logic, or lack of it, will be more obvious in this example of the same kind of thinking:

Remember when you said Florida is warmer than New York? Then how come it was 96 in Manhattan this afternoon and only 78 in Miami?

But logic is the least of this commercial’s problems. The real problem is that Allstate is telling us that men are idiot wimps and women are passive-aggressive harridans incapable of making basic distinctions that a 6-year-old can understand.

How the agency sold this idea to the client is a minor mystery. Why Allstate is still allowing it to air is, as Yul Brenner’s King of Siam said to Anna, “a puzzlement.

It’s been running for a year or so and appeared last October in a Guts’ piece titled: Men-are-idiots creative strategy turns poisonous. It must work and that says something troubling about audiences these days.

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The law of little changes


A basic rule of editing or approving copy is to read the piece through before you pick up a pencil.

Hidden in that sensible rule is a powerful sub-rule: when you must make a change, make sure it’s an important change; niggling little changes, sometimes even just one little change, can create a web of confusion.

The rule extends beyond copy to any form of communication, any action, really.

Consider Southwest Airlines’ new commercial about the curved up wingtips (winglets) on its planes. The commercial’s so new that it doesn’t seem to be on Youtube yet.

Apparently winglets help save a lot of fuel, something like 54,000,000 gallons last year. Winglets are great, we infer. One little thing Southwest overlooked is that the commercial closes with the company’s logo which features a jet with no winglets.

If you drink bottled water, you’ve undoubtedly held a bottle of a Nestle Waters brand.

Down here in Florida, the brand is Zephyrhills, named after a suburb of Tampa. Up in the northeast, the brand is Poland Spring, named after a town in Maine. In Texas, it’s Ozarka and there are three or four others in the US.

Like all bottled water companies, Nestle is under relentless attack from environmentalists for its plastic bottles. So the company shrank the amount of plastic in its bottles, most notably with a much smaller cap which is a real pain to open. Hard to get a decent grip.

On at least some of its labels, the company touts the smaller cap with copy that reads: “Smaller Cap = Less Plastic Did you notice this bottle has an Eco-Slim cap? This is part of our ongoing effort to reduce our impact on the environment. This bottle and cap contain an average of 20% less plastic than our original 500 mL Eco-Shape® bottle and cap. Be Green.

You barely have time to shake your head at the eco-babble or take umbrage at the imperative command to Be Green before your eye drifts down to a hairline box with this little item: “WARNING: Cap is a small part and poses a CHOKING HAZARD, particularly for children.

So we have a pain in the butt bottle cap that does nobody any good whatsoever but it annoys customers and might kill children. Amazing. Little things really do mean a lot sometimes.

Both Southwest and Nestle have demonstrated that each change in anything creates a ripple effect that’s sometimes hard to notice in the enthusiasm about making changes.

That ripple effect can appear to be a little thing but, as Kitty Kallen told us back in 1954, Little Things Mean A Lot!

Takeaway? Before we carve little changes in stone, let’s think them through because changes always have consequences. And the law of unintended consequences can be brutal.

Brilliant commercials aimed at arrogant drivers


A couple of years ago, Alamo screwed up my reservation for a plain old car and I wound up driving a Lincoln Continental pickup truck. It was okay but it was ridiculous.

The Humvee is ridiculous, too. So are the Cadillac Escalade, Porsche Cayenne, Lincoln Navigator and Aviator. All ridiculous.

The business of luxury cars, as opposed to trucks, is ridiculous but in another way. The vehicles are fine but the advertising seems nuts. Watching the commercials, I scratch my head wondering: a) what they’re actually selling and b) if it’s possible that their target audience is juvenile.

Assuming car makers and their agencies know what they’re doing, the flaw, if there is one, must lie with the audience.

What is actually being sold in nearly all luxury car spots is fantasy bordering on the delirious lunacy of a perfume commercial.

The oddest thing is that the commercials are all so much alike that they blend. “Was that a spot for a Beemer or a Benz? Neither, an Audi? You don’t say.

The one fantasy they all have in common is the empty road. Or street, because quite often the uber-hip must drive through the mean streets to prove their cool. Beautiful people in beautiful cars racing along empty streets and highways. If that’s not fantasy, nothing is.

Most commercials pile at least one more fantasy on top of the common core fantasy.

A spot for the Lexus IS 350 starts off with a crowd at some kind of show. The conceit is that “some things are designed to draw crowds.” In this crowd, two blue eyed blondes dressed all in white stand out. The guy has a beard so we can tell he’s the guy. They make their way through the crowd to each other and then to the car. Ta da.

A Mercedes Benz CLA, driven by a bearded guy in a suit, races with a wolf. The wolf can go cross country but the Mercedes has to stick to the road (empty, of course), until it runs, briefly, into traffic – actually just one truck, which is a prop to help demonstrate the car’s ability to brake itself in case the bearded guy’s not paying attention which he’s not because he’s looking around for the wolf. When the guy gets home, just ahead of the wolf, we see the car’s ability to help the guy park in a driveway big enough for five cars. The wolf walks by the car and snarls as the word “Untamed” appears on screen. Lame might have been a more appropriate word.

BMW has an all models spot with different cars driving along empty streets and empty country roads and across empty bridges while a cello plays funereal music. There’s an SUV tearing up a beach, which is annoying just to watch. It must have been infuriating to the people in the nearby houses.

Audi takes the cake with a super-weird spot that has over 10,000,000 hits on the Internet (the others have a few thousand.) Kids must love this nonsense. A kid takes the family Audi to the prom. He’s dateless and friendless, but, apparently, a rebel. He parks in the principal’s spot, stomps determinedly through the crowd (which looks and acts just like the Lexus crowd) straight to the prom queen. He kisses her. The prom king shouts “Hey” and races over. Next thing, the kid has a black eye and he’s driving home, howling. Up come the words “Bravery. It’s what defines us.” Bravery? Sheesh, on Earth he’d get busted for assault.

None of these commercials make any sense at all to normal people for one simple reason. Apparently Lexus, Mercedes, BMW and Audi don’t make cars for the real world. They make cars for self-centered, rude people, ridiculous people, the kind who actually buy into the fantasy nonsense.

And it might pay off.

A survey in the UK by the DailyMail, tells us that the rudest drivers drive BMWs. Research by the University of California published this study, indicts drivers of “fancy” cars, especially drivers of Beemers.

I suspect that commercials for “fancy cars” are designed specifically to appeal to the pathetic souls we know as narcissists, the kind of people who act as if the streets and highways really are traffic free except for them.

The difference between great and mediocre print ads


Or why a horse can be more relevant than Jennifer Lopez

I can’t remember why they were on my desk but there they were: a 1969 Life and a 2013 Fortune. One a consumer magazine and one for business people.

I thumbed through them and noticed that while both magazines have good ads and bad ads the proportion has switched over the years. About 70% of the ads in the 1969 Life are pretty good and about 70% of the ads in the 2013 Fortune are pretty bad. Did we learn nothing in 44 years?

I’m thinking a couple of things happened, both bad. One is that the cult of creativity-for-its-own-sake now has a stranglehold on the throat of advertising; the other is that print has been relegated to the back burner; electronic/digital and TV are where it’s at these days, (although I’m beginning to wonder about TV.)

The creativity problem is worse than ever. If writers and designers want to be creative, they should take up haiku or origami. Our job is selling. A sales pro who’s never written anything would make a better copywriter than a writer who’s never sold anything.

Apparently, 1969 agencies had a few more sales pros writing and designing for print. They came up with ads that accomplished things you hardly ever see anymore: salesmanship, charm, common sense, legibility, relevance and memorability. And they did it with the simplest of tools: understanding the target audience, understanding their brands, thinking, common sense and talent.

Strategically, they did it with one crucial idea in mind: they communicated to the audience rather than to themselves. Here are few examples from the 1969 Life:

Maytag’s focus has pretty well always been the reliability of its appliances. Sister Charity Marie brought it home with a charming and very real, readable and persuasive story.

Renault intrigued and challenged readers in a funny ad with a perfect visual and bang on copy. I can’t help comparing this ad to Fiat’s current campaign with the irrelevant Jennifer Lopez. The problem is, I don’t think Renault’s horse idea was actually a campaign in which case it was probably a waste of time.

Westclox’s claim seems silly now but $50 in 1969 is about $300 today. This no nonsense ad makes a clear case for a value claim of quality for less. The claim is not buried in tiny type, not couched in ultra-hip language. It’s in the headline and clear as a bell.

The headline in the Johnnie Walker Red ad gets your attention immediately. It’s charming, funny, arresting and relevant. Body copy would be superfluous.

Let’s look at a few ads in the April 8, 2013 Fortune

The headline tells us that the Rackspace ad is about open-source cloud computing. More details? I’m sure they’re there somewhere but, with the body copy set in super-wide, sans serif, reverse type, very few people are going to be able to read about them.

Old Dominion is a Virginia tucking company. The headline is a little more obtuse than Rackspace’s; it fits with the company’s overall campaign but an ad should stand by itself. The ad would probably be better with a much smaller photo and much larger headline type. The body copy doesn’t have much of a point to make which is just as well because it’s set in very hard to read type. The logo’s so small that a lot of people who saw the ad have no idea who paid for it.

I have no idea what Avigilon is and neither will anyone who sees this ad.

The idea behind the Regions bank ad isn’t horrible. It’s the same basic idea of the 1969 Maytag ad. The difference is that you knew what Sister Charity Marie’s values were. You have to be told what this guy’s values are and they are … irrelevant. Nonetheless, with the lack of a headline and the body copy set in that incredibly hard to read type, it’s not a good ad.

I’ve never watched Mad Men but maybe I should. I’d probably feel right at home.

If magazines are dying, they’re taking their time about it


It’s never been easy to figure out the true circulation numbers for print magazines and it’s even trickier nowadays. For example: Is Costco Connection a magazine or an extended ad/PR thing that looks like a magazine? If it’s a magazine, it’s got the 3rd largest circulation in the country. I say it’s a quilted ad so to heck with it.

This morning, I was idly wading through various circulation lists and settled on a rough consensus to reach a few simple conclusions.

The two magazines with the largest circulations in the world (over 40MM each) are religious publications from The Watchtower Bible and Tract Society. Numbers 3 and 4 worldwide, over 20MM each just in the US, are from AARP, a political organization.

I don’t think of Watchtower and AARP as magazine publishers so I ignored them and magazines like them (NRA’s First Freedom, for example) along with online editions of regular magazines and newspaper inserts such as Parade and the WSJ’s outlandish every-now-and-then Magazine.

Counting American circulation only and ignoring Watchtower and AARP, 9 of the top 13 (70%) are more than 75 years old. Two of them, Good Housekeeping and National Geographic, were founded in the 1880s! The oldest magazine in the top 100 is Popular Science which has been around since 1872. Vogue is only 20 years younger.

Wired is way down the list but its numbers would be good enough to make it #2 if it was in Russia and #3 in India.

Worldwide, there are some real oddities. In Russia, for instance, nearly all the top magazines have familiar English names: National Geographic, Cosmopolitan, Playboy, Vogue and so on. Sweden, at first glance, seems to have a lot of magazines with decent circ numbers, but about half of them are put out by associations or unions.

There are at least three obvious lessons here. One: The death notice for print is, apparently, premature. Two: Content matters. Three: Brand names matter, but not without great content. Combined, brand name and content are very powerful.

Digging deeper, actually reading magazines, you sense a subtler lesson.

Most advertising in print, except in women’s magazines, is just bad: blind headlines, weak fonts, reverse type or type on tone (unreadable).

There’s an opportunity here for smart companies with sharp ad agencies.

What’s happening with newspapers?


The Koch brothers have been trying to buy the Los Angeles Times. Lefties are in a tizzy, of course. John Henry, principal owner of the Red Sox, bought the Boston Globe from the hapless New York Times. Henry paid $70 million. The Times had bought it for $1.1 billion. And Jeff Bezos of Amazon just bought The Washington

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Post. Why are these smart guys spending money on “dead” media outlets? Maybe because print will soon be where the money is, especially print “brand names” with extensions into the electronic world.

The key to newspapers’ future may be the 60+ crowd with pushes from a few fairly recent phenomena.

Older folks actually like print and it’s not just because it’s a habit. They were educated differently and even the dumbest of them can actually read. They’re also curious and open-minded because when they were in school the focus was on actual education and not on social engineering.

They pay more attention to details so sound bites just make them ask questions; they want more. Print can give them more and newspapers in particular can do that every day. Find a need and fill it and as soon as newspapers wake up, they just might.

One recent phenomenon that’s going to matter is financial. Older folks have more money to spend than younger folks and it is looking more and more unlikely that the current cadre of youngsters will ever catch up.

Another phenomenon is that television has become much, much worse than the famous “vast wasteland” Newton Minow, then Chairman of the FCC, described in a speech 52 years ago. A few examples should make the point: politically correct speech and themes that, not surprisingly, have resulted in programming that makes viewers feel like they’ve been dragged through a sewer; the disgraceful news departments of the major networks; “reality” shows. There’s a reason the Hallmark Channel is the fastest growing cable programmer.

TV advertising is even worse than the programming. There’s more of it in seemingly endless strings; ambulance-chasing lawyers and prescription drug manufacturers are regulars. Who can watch that stuff? Thanks to the clicker and 500 channels, nobody has to.

Online advertising has a lot of problems but the one that matters here is that reading online is annoying. Intrusive ads pop up, random links take you far from where you want to be, emails keep coming in. It’s like trying to read a book while someone turns the pages before you’re ready and the mailman keeps dropping letters onto your lap.

So, maybe, newspapers are looking more attractive. But there is a potential problem. If owners and editors want to appeal to older and wealthier people, they’d better get the politics right.

If the Kochs manage to get their hands on the L.A. Times, despite the objections of local politicians, the paper will get a lot more conservative in a hurry. It will be one of the very few conservative dailies in a major market. (Offhand, I can think of only three or four others including the New York Post, Reverend Moon’s Washington Times, and the Dallas Morning News, plus the Op-Ed pages of the Wall Street Journal.) Older folks in southern California, naturally more conservative, will read the Kochs’ Times and advertisers will climb aboard.

I know nothing of the politics of John Henry in Boston. If he’s a (so called) Progressive, his $70 million investment will surely dwindle.

Jeff Bezos is a Progressive but he’s a very smart businessman and my guess is that he’ll hire a few more conservative writers and editors and do very well, despite the squawks of his leftie buddies. If the Kochs, John Henry and Jeff Bezos succeed, a lot of shareholders will start squawking, too, and they’ll drown out the opposition.

The Surprising Value of Stalker-Brands


Being an old-school guy, I’m not at all sensitive to brand pressure. My clothes are basically the grown up versions of whatever I wore when I was 12: cotton everywhere, button down oxford shirts (long-sleeved only), khakis or light grey slacks, penny loafers and a blue blazer.

Once guys like me find something we like, we wear it, eat it, drink it, drive it or use it in the bathroom until we accidentally find something better.

A few years ago, I accidentally found Kirkland brand products at Costco and Equate brands at WalMart. We used to call them store-brands but Kirkland and Equate are something different. With a few exceptions (e.g. 8 O’Clock Coffee at A&P), store brands were just not as good as national brands. Kirkland and Equate are better than a lot of national brands, and a lot cheaper.

Most Equate products are for the bathroom: mouthwash, contact lens stuff, shave cream and so on. Kirkland brands are all over the place: coffee, bottled water, lox and God knows what else. Reasonable quality at a low price.

Both companies use their brands to stalk the big brands. For instance, Kirkland’s coffee is right beside Folger’s on the shelves and Equate’s mouthwash is beside Scope. The price contrast is immediate.

Where store brands were once created for the price-conscious shopper, Kirkland and Equate appeal to the quality-conscious as well, assuming they’re not sensitive to brand pressure.

We all have friends who care about the brands they use (or, at least, are seen using) because of brand image. They’ll spend more on their brands even if there’s no logical reason to fork over the extra $$.

House brands are stalking in a whole new area these days. They double as magnets. The only place I can buy Kirkland products is at Costco, so I go to Costco, I wouldn’t bother otherwise, and I buy a lot of other stuff when I’m there. Ditto Equate and WalMart.

Both companies, as you already knew, are run by very smart people.

P.S. I tried a Kirkland wine last week. Nobody’s perfect.

Tweeting with a leftie about guns.


It started when a leftie I follow retweeted this: “Why is it that it’s always some crazy whiteboy with a military style weapon killing innocent women & children?

Not wishing to pick nits by mentioning, oh, the (black) Washington snipers, the (black)LIRR racist loonie or the (Korean) Virginia Tech shooter, I replied semi-coherently, I’m afraid: “Yes, in the mass murders. One or two it’s another bunch & there’s a lot more of ‘em. Ask that question.

My correspondent knew what I meant. Back came a non sequitur: “Bottom line, whoever pulls the trigger: it’s a gun they’re using! We Need Sensible Gun Controls!

I suggested: “We do and we need thug control, idiot control and lunatic control… and to define Sensible, clearly.

She added: “Personally, sensible gun control to me is No Guns. But that’s just me. I’ll settle 4 stringent background chks

I upped the ante: “No guns would be great. Never happen. Bad guys will always have them (by definition they don’t obey laws).

She had an interesting take on that: “Honestly, I’m not worried bout bad guys w/ guns. Just worried bout tons of weapons unaccounted for…Loose among us!

(… not worried about bad guys with guns?) I continued with: “Plus, they’ll always have knives, baseball bats, fertilizer bombs, poison, fists, and on and on and on.

She signed off with this:“You R sounding more & more like a troll with every tweet you make. Nit-picking at zip, resorting to RWNJ arguments. Bye!

I have no idea what a troll is in this context. RWNJ means Right Wing Nut Job Sooner or later, usually sooner, lefties descend to the lowest level of thought and drag up the ad hominem argument, often with a helping of straw man.

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