Tuesday, October 6, 2009

Why Harrah's Loyalty Effort Is Industry's Gold Standard

October 5, 2009: summarized from AdAge.com -- Total Rewards, which was rolled out as Total Gold in 1997 and renamed Total Rewards a year later, is heralded by many as the gold standard of customer-relationship programs. And with the program generating $6.4 billion yearly, or 80% of its gaming revenue, Harrah's is confident where it ranks among competitors as well. "It's certainly the best program in the gaming industry and, more broadly, in loyalty," said David Norton, chief marketing officer.

David Frankland, principal analyst at Forrester, frequently cites Harrah's, along with Disney and 1-800 Flowers, as the industry's leading examples of how loyalty programs should be run. Mr. Frankland said one reason for the program's effectiveness is that Harrah's has a customer insights and intelligence culture that starts at the top with President-CEO Gary Loveman and Mr. Norton.

"In every company we see running really strong loyalty programs, it's always driven from the top down," Mr. Frankland said.

Mr. Norton said the company communicates with its members regularly via 250 million non-acquisition pieces of mail a year; good customers can receive as many as 150 pieces of mail a year from one or all of its hotels. Harrah's sends nearly 8 million e-mails collectively to its loyalty members in a month. Harrah's average response rate for direct mail is in the high single digits. The company's belief in its loyalty program is so steadfast that it cut its traditional ad spending from 2008 and 2009 more than 50%. The company spent $106 million on measured media in 2008; for the first half of last year it spent $52 million and in this year's first half $20 million.

Mr. Frankland said Harrah's isn't only measuring things such as direct response, click-throughs and open rates. "The most-sophisticated firms also think about business metrics, like revenue, customer profitability and customer value, and how they are all linked.

Mr. Norton said it's a mixture of good customized messaging and a strong loyalty program that sets Harrah's program apart. (The program is powered by SAS's predictive-analysis program and Unica's marketing management software.) "Airlines have good loyalty programs but don't do as much customized marketing," he said. "Then you have someone like Capital One who is sophisticated on the direct-mail front but doesn't have a good loyalty program. We have managed to do both well."

Over the years Harrah's has made significant changes to the program based on the data and research it does with its customers. Last year one of those changes included adding the ability to track and reward non-gaming spending, which has allowed it to better entice people who don't view themselves as big gamblers. "We wanted to make it relevant to them as well because they could spend a couple of hundred dollars on a room, the spa, food and shows and not be treated any better than a $50-a-day customer," Mr. Norton said.

Going forward Harrah's is looking to take its program mobile and is working on a dozen or so early stage programs. "Ultimately," Mr. Norton said, "we see it as a great device for two-way interaction."

Read more at: http://bit.ly/z7zT8

Lottery Boss: Protect Iowa’s Rights on Internet Gambling

CM Comment: Lotteries start to stake their ground in the Internet gambling debate.

September 29, 2009: summarized from Des Moines Register -- Iowa should keep its options open and develop plans to “protect its borders” while Internet gambling legislation is being debated in Congress, Iowa Lottery Chief Executive Officer Terry Rich said Tuesday.

Rich briefed the Iowa Lottery Board on a bill authored by U.S. Rep. Barney Frank, a Massachusetts Democrat, that would establish a regulatory framework to permit licensed Internet gambling in the United States. Other Internet-gambling bills have also been introduced in Congress.

“Based upon what we are seeing, I think that the federal government may pass something. Obviously, our job as employees of the state…is to make sure that our elected officials know that if it does pass, what impact it might have for the state,” Rich said.
The legislation could include provisions authorizing the federal government to regulate and tax Internet gambling in Iowa if the state’s elected officials don’t take action within a specified time frame, Rich said. He is urging state officials to protect their right to either reject or approve Internet gambling, and to impose taxes.

“The decision may be to do something, do nothing; but to at least have control so that if you do something in the state of Iowa that the state legislature and the governor decides what it should be,” Rich said.

The Iowa Lottery has remained neutral on Internet gambling, but Rich said he has been briefing Gov. Chet Culver’s staff and the Iowa Legislature’s Government Oversight Committee about the issue.

Culver’s aides didn’t immediately respond to a request for comment on Tuesday.

The 3rd U.S. Circuit Court of Appeals earlier this month upheld a federal ban on Internet gambling, although some legal experts said the ruling appeared to open the possibility for states to have more say on the issue. The decision upheld the Unlawful Internet Gambling Enforcement Act of 2006, which banned credit card firms from processing payments for online wagering.

The Iowa Racing and Gaming Commission, which regulates the state’s 17 commercial casinos and three racetracks, hasn’t taken a stance on the pending federal legislation, said Jack Ketterer, the commission’s administrator. For the 12 months ending June 30, the casinos ranked in $1.4 billion in gross revenue from about 23 million admissions.

Ketterer noted that existing federal law provides an exemption which allows wagering via the Internet and telephone on horse races when such gambling is permitted in both states. But the issue of Internet gambling on Iowa horse races has never been pushed legally in Iowa, and Ketterer said the Iowa commission would probably say it is not legal.

Read more at: http://bit.ly/1aw9bU

Why Social Media Should Welcome Location-Based Services

CM Comment: The future of mobile marketing.

September 27, 2009: summarized from BusinessWeek -- Twitter knows where you are. Or at least it will soon, when it introduces a feature that lets your followers know where you are when you send a tweet. The announcement that Twitter will soon give users the option to disclose their physical whereabouts kindled debate over the role of location-based services (LBS) in social media and elicited criticism that the tools are an invasion of privacy.

I've been trying out a wide range of LBS tools to see for myself whether they're useful or something to be feared. I've used Brightkite; Plazes, which was recently acquired by Nokia (NOK); Germany-based Aka Aki, which I like to use in Europe, as well as a series of lesser-known services.

My conclusion after a year of testing is that far from being a threat, sites offering LBS represent vast, unrealized potential to radically transform the way we communicate and stay connected. ABI Research predicts that LBS will generate revenue of more than $14 billion in 2014, from about $2.6 billion this year.

Besides helping us track our location patterns or the nearest Starbucks (SBUX), these apps collect valuable data about our daily routines and the routines of those closest to us. They track personal tastes in food, fashion, and music so we can receive alerts and location-based notifications. Individual users can use LBS to share relevant information and places with friends. The device maintains a record of our daily routines, and it's constantly looking for people we know who may be nearby. This added layer of movement and context is much more valuable than what's available on existing social networks, such as Facebook, that don't automatically offer location-specific information.

Potential Gold Mine for Marketers
There's no denying LBS could also become a gold mine for marketers. "Context awareness is critical when you want to buy something, and advertisers get higher targeting based on our patterns and social contexts," says Massachusetts Institute of Technology researcher Nadav Aharony.

Yet as the space crowds with LBS players, the challenge will be to protect users' privacy, find ways to make marketing pitches relevant, and separate useful sites from also-rans.

Executives at Brightkite take security concerns seriously and give users the option not to broadcast their whereabouts. "A real sense of privacy is important, and we spend a lot of time thinking about it," says Brightkite CEO and co-founder Jonathon Linner. "Privacy has to be transparent—in the setting menu and the post screen. It has to be very explicit." Twitter plans to make its location services opt-in, also letting users choose whether to tell others where they are.

A related but more fundamental question: What happens to the data that are being collected about our whereabouts? Who or what controls it? "We need to be the owners and keepers of our information, and there are many ways to do this from a user standpoint," says MIT's Aharony. "We can create our own groups and set our security settings and circles of trust, and how we do this is critical."

At the MIT Media Lab, Aharony is developing an open-source LBS platform that lets users communicate directly from one computerized device to another, such as through Bluetooth technology, without having to go over a wireless network or be logged on to the Internet. "The majority of [existing] apps are very centralized—they remain Internet-based, and the controls are with the company," he says.

Ad Intrusion: Treading a Fine Line
Marketers that hope to capitalize on a person's whereabouts will need to learn how to send relevant pitches without going overboard or becoming a nuisance. "This has great benefits if it gives us what we need when we want it, but keep in mind that commercial interests are seldom in harmony with our personal interests," says UCLA Internet researcher Brad Fidler.

To be relevant, marketers will need to know a person's tastes and interests as well as location, experts say. "Location is not everything," says Linner. "If you're hanging out near Times Square, it doesn't mean you want to eat there. But if we know that you like Spanish food, then we could suggest a place that's on your route. The real value lies in providing better suggestions." Some consumers will need incentives, such as free or subsidized phones or calling plans, in exchange for the intrusion of ads and other marketing messages.

When it comes to existing sites, I find Brightkite and Aka Aki the most user-friendly for both beginners and savvy socialites. I found it quite easy to integrate them with my existing mobile devices, and it helped that some of my friends were already using the services.

Another factor was connectivity on the go. For example, Aka Aki's mobile version incorporates a combination of Bluetooth, GPS, and Wi-Fi technology to find users within specific areas and alert you via text if someone you know is nearby. Brightkite has also made it convenient to stay in touch on the go via text and e-mail, and I especially love the way I can send location-tagged pictures from my LG mobile phone. It's the feature I use the most since I love taking pictures. Brightkite also automatically sends my pics to Twitter.

Brightkite and Aka Aki also win because they look like finished products, and they pay attention to design details. Loopt, Pelago (Whrrl), and regional players such as Moximity are too gimmicky for my taste. Whichever services prevail, they're very likely coming to a phone or computer near you before long, and chances are they will radically change the way you communicate and how friends and marketers alike stay in touch with you.

Read more at: http://bit.ly/16FTvY

Why Should Your Company Care About Social Marketing?

CM Comment: A lot of marketers think launching a Facebook fan page equates to a social marketing strategy. This article provides a good sense of what social marketing really means.

October 2, 2009: summarized from 1-to-1 Media -- For anyone who's grown up in the world of traditional marketing, some of the terms getting tossed around these days, like social media, social networks, and online community, can be extremely confusing. Even more abstract is a concept that integrates all of these terms—social marketing. Whatever happened to easy-to-understand concepts like newspaper ads, direct mail, email marketing, and search engine optimization? With these more traditional terms, all are discrete activities and their name tells us exactly what they mean.

As someone who's spent time in both marketing camps—traditional and online—I'm here to offer a little clarity. Let's start by explaining some of the terms mentioned above and why they are different before we drill down into social marketing:

Social Media: The facilitating of conversation around any type of content—expert or consumer generated—using social tools like blogs, ratings and reviews, videos, and life-streaming services like Twitter.

Social Networks: A collection of like-minded individuals focused more on "who you know" versus "what you know." Social networks like Facebook, MySpace, or LinkedIn are often heavy on user profiles with some light tool functionality mixed in. (This is quickly changing as public social networks realize that they need to do a better job getting their members to engage.)

Online Community: Most experts have come to define "community" as a place where social tools like those mentioned above in the definition of "social media" meet online profiles like those mentioned in the definition of "social networks." To that end, online communities combine the concept of "who you know" with "what you know" and often rally around lifestyle topics or areas of practice (e.g. search engine marketing).

Now to social marketing, which is a blend of the tools and techniques listed above. Building upon the three other definitions, social marketing is the ability to drive measurable and meaningful results by creating expert and consumer-generated content with managed online communities to help improve things like customer loyalty, engagement, and advocacy.

Hopefully those definitions provide a little clarity around the concepts of "social" and "online community." So the bigger questions are, "Why should you as a marketer care?", and "What could you expect if you were to add social marketing programs to your existing arsenal of tools and techniques?"

For one, the current economy is forcing us to get more done with less. This means less money for acquisition vehicles like email, direct mail, and online advertising. If your budget is shrinking, now is the perfect time to focus on customer retention, cross-sell, and ultimately referrals. A company that has done a great job of this is Boston-based Hubspot. While it may not be a big name brand, the company does a great job at engaging its customers through great content and social tools like its blogs and Twitter.

One thing to keep in mind is that any of your marketing efforts—social or traditional—will work best when done in conjunction with one another. Just like you wouldn't choose to do online advertising instead of search engine marketing, you should think about how combining search engine optimization strategies, email marketing, direct mail, and social marketing will maximize the way your acquire and engage with your customers.

Read more at: http://bit.ly/hImc3