hello delight

There is a story in Brandweek this week about how travel loyalty programs are on the decline.  Retail loyalty programs are still holding strong, they report.  From my experience, loyalty programs are tough.  Almost every brand manager I've ever worked with has wanted a loyalty program.  There is this idea that if you get a guy to put a card in his wallet and promise him an iPod after spending tons of money with you, he'll be brand monogamous.  It just doesn't happen very often.  That's not necessarily the fault of the loyalty program concept, but rather the fault of the execution.  The error in execution could certainly be the economics of the program, but often it's not.  First, the loyalty program has to be cue-compatible with the brand.  It wouldn't make sense for an M&M'S loyalty program to be anything but playful, personal, and fun.  Most brands can handle this part.  The more difficult part of the program is strategizing the benefit you're going to deliver.  You must make the benefit increase the brand experience in some way to have the long-term impact the brand is likely seeking.  A tangible benefit (eg a free toaster) would introduce interference to the brand experience and have a negative associative impact. An intangible benefit would support the brand from a loyalty point of view but it’s more difficult to craft.  Intangible benefits that work are often CRM programs, members-only websites, exclusive content, digital tchotchkes, etc.  The key to a loyalty program is that it be on-cue and not detract significant attention from the brand.  Most people I've seen don't really have clear objectives for their loyalty program.  As a result, they focus on incenting the people who are going to buy anyways to buy a little more.  This type of loyalty play often addresses an infinitesimal audience at the expense of broader reach programs.

I've spent a lot of time talking about transaction costs in my life.  It seems to me that in many cases, the lesser the cost of entry vis a vis time, money, commitment, etc, the less meaningful the experience.  This theory breaks down in the world of internet services such as Facebook, Twitter, and the like.  However, the value exchange is clear in those scenarios - the user understands the arrangement and makes an active decision to participate.  Advertising is different.  Bad advertising has no transaction costs.  It costs the user nothing because they don't have to care and they don't have to notice.  Good advertising has a transaction cost because the user notices it, if only for a fleeting moment.  The consumer's expectation that they're going to not care about 99% of most advertising is both a blessing and a curse; at the very least it dictates the relevance level of digital advertising has to increase.  Or, change the expectation for digital advertising.  The DeBeers Unbreakable Kiss and the Prius Flowers are definitely digital campaigns capable of being sold by any digital agency, both of which have illustrated a new level of transaction costs and relevance for consumers.  But, they're not banners and they're not exactly microsites so your client may need some convincing that they're actually digital. :)   This has to be the direction for digital - higher transaction costs and higher payoffs.

There is a brilliant essay in the Armed Services journal today here.  The thesis is that Powerpoint decks are so overused and improperly used, they contribute to poor decision making.  I couldn't agree more.  For the past week, I've been working on a pitch for a local company.  As usual, I started by opening Powerpoint and laying out a neat template and searching the web for appropriate graphics.  Nineteen slides later, I'd said nothing.  And as a strategist, my graphical ability is surely not enough to carry me.  So I started over, opened Word, and started writing.  The proposal was 100x better.  It was clear, not bound by the constraints of slides, and (if I say so myself) fun.  We've been so indoctrinated with the idea that 'people don't read.'  Maybe that's the case, sometimes, but when decisions are important I think they do.  It's funny how in advertising we can't speak of pitches without pitch decks and capabilities without capabilities decks.  Maybe Hello Delight will adopt a no Powerpoint deck rule...just documents...and boards.