Loyalty Pays Off

June 29th, 2012 by mdgberg

United Airlines LogoLast year I flew around 130,000 miles across 11 different airlines and had virtually no status to show for it.  I probably stayed 30-35 nights in hotels, also with nothing to show for it.  So on Jan 1, one of my resolutions was to consolidate my travel down to one airline and one hotel chain.

Because I travel internationally, I was limited to the big alliances, and since I’m in San Francisco, United was the obvious choice for air.

And as of today, in just under 6 months, I’ve hit 1K status.  Now that doesn’t mean nearly as much as it used to, but seeing how few perks a Premier Silver (25K) gets from United, at least I’m almost guaranteed an Economy Plus seat (which is all that really matters for productivity).  Total miles so far ~106K, 100 of which are on United.

And with Starwood Preferred Guest, I’m a few nights short of Platinum.  Not much in the way of benefits when you are gold other than increased accrual, but better than what I had in 2011, which was nothing.

So now the rest of the year (and next) looks far more promising, solely due to a decision made in 2 minutes in early January.

Getting Off Of My A…

June 12th, 2012 by mdgberg

Been spending a fair amount of time on HBR.org thanks to their recent writing on habits.  As someone who has always needed to exercise more, understanding the characteristics of establishing good habit patterns is quite relevant.  For whatever reason, recent articles have been popping up via Google Reader and have made for an interesting learning experience.

It started with Kare Anderson’s post “What Captures Your Attention Captures Your Life”, where she argues cell phones and other technology has stolen most adult’s attention from the world around them.  “Whatever we focus upon actually wires our neurons.”  Once you internalize that statement, it becomes readily apparent what mobile can do to how you interact with the world around you.

Prepared for some context shifting, I started noticing more articles, such as Peter Bregman’s “Two Lists You Should Look At Every Morning”, which boiled the prioritization process down to your Focus List and your Ignore List.  It’s a great way to filter out the noise and ensure attention on that which is important.  Yes, I’ve started using both.  Less Trulia, more Lose It!.  Less ESPN, more Economist.  Fewer email checks, more blog posts.  (Like this one.)

FitDeskAnd then discussions with colleagues isolated a key difference among top performers – their most important tasks are done first, in the morning, before anything else can get in the way.  I’ve always treated the morning as adaptable, adjusting based on my evening before and the tasks of the day ahead.  But just knowing that top performers have this one trait in common was enough to get me reorganizing my morning around a disciplined approach to exercise and consuming media.  Which, of course, I do at the same time thanks to FitDesk.

We’ll see if I can stick with it…

Amazing What We Will Put Up With For Status

April 9th, 2012 by mdgberg
First review at tripadvisor

Should have known better

Yeah it takes a slap in the face like this one to get me writing again.  Just checked into a nameless hotel.  Now I understand why they stripped off the nameplate.

But since I’ve decided to consolidate my hotel share with SPG, I needed an SPG property.  If I’d bothered to check Tripadvisor I’d have known better.  But I probably still would have stayed, to drive towards Platinum.

Shows how powerful the draw of status can be, given that I just reached Gold in just 13 weeks.  Not like it helped much – there’s no upgraded rooms and doesn’t appear to be much to gain here.  But it should be better at my numerous stays over the coming weeks all over the US and Asia.

And I’m looking forward to my first Aloft experience in 2 days.

The Sixth Wave Of Information Arbitrage In Commerce

December 14th, 2011 by mdgberg

The fifth wave of purchase transformation is upon us, but the sixth is close behind.  While the first five benefitted consumers, the sixth will start to even the playing field.

The first was the introduction of the browser in the mid 90’s.  Suddenly you could research product details, examine similar products across different sellers, and read professional reviews published by magazines online.  Consumer immediately eliminated the information imbalance that had existed for all of civilization, where the seller always knew more than the buyer.

The second came quickly after the first, with the widespread usage of search, which allowed consumer to learn a huge amount about a specific category or product in a short period of time, including prices and sellers, in just a few minutes.  This meant that it was likely a consumer knew more about a specific product or category than an associate standing in a retail store who had received 8 hours of training before getting thrown on the floor.

The third was the advent of ratings and reviews, thanks primarily to BazaarVoice and Amazon.  Now consumers had a pool of primary research to draw from to evaluate the qualitative differences between products. It also exposed flaws and other non-obvious positives and negatives, putting consumers even farther ahead of sellers.

The fourth and fifth waves started nearly simultaneously – the social wave and the smartphone wave.  Social tools allow near real-time feedback from trusted sources and the crowd when a decision needs to be made, and mobile access allows the use of all tools anywhere, any time.  Both are rapidly transforming the nature of commerce, with Amazon’s recent overt effort to divert shoppers while actually in a competitor’s store representing the beginning of a brutal competition for customers.

The sixth wave, which is just now getting started, is the model wave.  There’s now enough information available on an individual to build a meaningful predictive model around ability to spend, share of wallet, propensity around certain products and categories, and many other potentials.  When the vast trove of behavioral and attribute data is run through parallelized processors, really interesting models can be developed.  And when event and transactional data is run through grid-based, in-memory rules processing, very fast decisions, offers, suggestions, and other behavioral “nudges” can be made.  Its the ultimate in information arbitrage: in order to get ahead of consumers, companies need to figure out what consumers want before they know it.

So marketers need to start finding great options for the technology to enable the sixth wave (I know a good one that happens to sign my paychecks) and great talent that can develop and administer the models themselves.

Quick Thoughts About Big Data

November 2nd, 2011 by mdgberg

This is an area where marketers need to get up to speed quickly and stay ahead of the curve.  Most consumer marketers have been exposed to pieces of the big data picture, primarily in web analytics, some propensity modeling, maybe some data mining.  But now social data is starting to flow into production systems, and if location data becomes accessible, the data flood will become huge.

What to do?  Most standard database approaches are not sufficient for big data, given their disk-based I/O limitations.  The trend now appear to be in-memory computing, an area my employer happens to be pretty good at.  So we’re learning from the huge computing farms of the financial services industry and seeing what the future might look like for consumer marketers.

More to come on the subject, but think of huge chunks of your customer database kept in memory, with business rules, models, and other processes absorbing a constant stream of data and driving continuous real-time responses.

Holy Cr@p

October 12th, 2011 by mdgberg

Time flies, I guess.  Getting acquired will do that to you.  Time to get back on the horse.  I’ll be doing a lot of cross-posting from other places as I build out a lot of ideas around, well, lots of things.

Loyalty Program Fund Rates – Further Thoughts

October 5th, 2010 by mdgberg

I’m starting a fairly long series of tips for retention and loyalty program managers on the corporate blog over at Loyalty Lab.  The first discussed program fund rates and is a good starting point for someone thinking about putting a program together.

With a day to think about it, I underemphasized the impact of program design on fund rate.  The art of design in this case is finding a balance between perceived fund rate (what the customer sees as the fund rate) with the actual fund rate (the resultant rate after breakage) while still meeting program objectives and staying fair to the customer.

A lot has to do with whether a redemption is a good thing or a bad thing.

In retail, you have to assess how much incremental revenue a redemption will generate, either through incremental spend during the visit (i.e. customers typically spend $50 when redeeming a $5 reward) or through incremental visits (i.e. overall member frequency increases by 0.75 visits/year when they reach a minimum spending threshold).  For many retailers, generating visits is so expensive that they want redemption, since that generates a visit.  In this case they want a low breakage rate.

In airlines, a redemption is pure cost, albeit low (the incremental cost of filling another seat is very low, so as long as they leverage existing capacity effectively, costs are not high).  The main benefit to the airline is share of travel wallet, so there is little benefit on the back end other than keeping customers happy and maintaining positive brand image in the social sphere.  Breakage here is a good thing, since it keeps costs down.

Other industries have similar considerations.

I’ve always visualized this as a multi-dimensional optimization problem, meaning the real challenge is framing the problem properly.  That’s why we’ve always spent a good amount of time understanding the behaviors that matter, the revenue generation possible, and the sources of cost in order to drive towards a set of solution options to consider.

I listened to an Invisible Hand podcast today with Douglas Hubbard on How to Measure Anything, and was struck by the similarities between his methodology and how we have to approach modeling of client businesses in relation to customer loyalty.  Topic for another day…

Integrated Software? Really?

September 17th, 2010 by mdgberg

Just read an article about Oracle in an IT trade mag, focused on Oracle’s drive to provide comprehensive integrated software solutions. What struck me immediately is how unrealistic this objective is.  Why?

  1. There’s always something new.  A work environment doesn’t stop at the desktop any more, so virtually anything can be part of the workspace.  Twitter is now a work tool.  So is IM, Expensify, and Tripit.  Any worthwhile marketing solution these days is web-based (excluding analytics, more on that some other day), and with improved integration options, these solutions can be part of the workspace in minutes.
  2. Someone else does it better.  Expensify is a great example of this as well.  Fast, easy, inexpensive, and I can (and have done) expense reports while waiting to board a plane.
  3. It’s virtually impossible to change everything.  Ripping out one system and replacing it with another is tough enough.  Doing that to every system is essentially impossible.  A long-term migration plan to consolidate on one platform is great, but by the time its done, most of the apps will be obsolete by someone else (see #1 and #2).

Why is this on my mind?  I’m seeing big companies (and I mean really big) try out ideas for the first time in a long time, using tools that would never have been considered just a few years ago.  It’s great – finally the SV mindset of using right tool for the job is gaining acceptance everywhere.

I think the separation between mission critical and not so mission critical is allowing interesting ideas to flower, extending, improving, and leveraging the talent already on hand.  While my area of interest is focused on marketing, this trend seems to be everywhere now, and bodes well for the future competitiveness of US companies.

The Social Storm

September 1st, 2010 by mdgberg

Remember when we used to think of the web as an interesting place to read what a company wanted to tell us?  Now we can watch movies, get real time feeds from many sources simultaneously, buy practically everything, manage companies, and entertain ourselves for hours (or days or weeks) on end.

Social has that same feel, doesn’t it?  Where the user base has entered the late majority, where there is a critical mass of interesting content, and where the apps growing up in the fertile soil of social foundations (Facebook, Twitter, OpenSocial, etc) are finally getting interesting.

To me, its clear we’ll look back on these last 2 years of the social boom as just the beginning, just as browsing brochure-ware sites was in the mid-late 90′s.  The ideas coming out of retail, CPG, manufacturing, financial, and travel make it obvious there will be an explosion of new ways for people to interact with people or companies.  Wish I could share what I hear but an NDA is still an NDA.

How Frequent Travel Changes Your Perspective

June 30th, 2010 by mdgberg

Part of the reason there hasn’t been a post in almost 8 months is that I’ve been on the road for practically all of those 8 months.  At last estimate, I’ve had 23 trips in the last 27 weeks to such hotspots as New Jersey, Utah, Oregon, Chicago, and Philadelphia, to name a few.

What all this travel has done is re-acquaint me with the joys of frequent flier programs and access to key seats.  Now I crave Economy Plus on United, fly Delta, AirTran and Virgin America primarily to get wi-fi, and travel with 2 laptops (one small enough to work on) when I don’t get a prime seat assignment.

If United could just keep its prices within a few percent of every carrier, I’d shift to them every time.  Realizing this and its impact on my behavior is a great reminder of why loyalty program and status still play such an important role in relationship marketing.