I was at the Loyalty Summit in Mumbai where I shared my thoughts on how "How IoT is the third age of marketing technology". Here's the presentation.

IoT is truly giving a voice to products! Also, it is changing the way data is getting generated from many products based on usage and giving customer engagement a new meaning.

I was reading Bill Lee's  HBR blog article on Marketing is dead. Quite an evocative headline, I must say. We have either heard or seen such headlines for example - CRM is dead, Long live CRM!

So, I wanted to get away from the hyperbole to the real message or take-out there from his article. There is nothing extraordinary in the article that one has not read or seen in the blogs, conferences or discussion forums over the last couple of years. The key questions to me is how is it being practiced on the ground?

I agree with Bill Lee that there is a tectonic shift in how traditional marketing will be done in the future but the chasm within the marketing specialists still remain which is the biggest challenge and pain for marketers. 

Lee talks about about four key points that is needed to rewire marketing as against the traditional marketing model that is broken:

1. Restore Community Marketing
2. Find your customer influencers
3. Help customer influencers with social capital
4. Get your customer influencers involved in the solution you provide

The interesting aspect of making this change happen is how will marketing specialists - advertising, public relations, digital marketing, CRM & analytics have to adapt themselves to these new rules. What I observe today is that the advertising folks have a poor understanding of community marketing or content marketing or database marketing while digital marketers have a relatively poor understanding of brand keys and architecture and public relations folks talk only about online reputation management(ORM). This is where marketers get frustrated with their marketing partners. 

Here's what I believe can make it happen on the ground:

1. Hire outside their disciplines- Many of these specialists need a higher appreciation & respect of the techniques of the other and a seamless fusion of each of the strategies into their marketing plans is increasingly important if this model has to be fixed. 
2. Identify leaders as orchestrators - There is a need for what I call as orchestrators in each of the specialist disciplines who have the ability, skills and competency to tie-up the loose threads that emerge of out their team's plans into the other discpline or play a seeding role of embedding an idea of the other discipline within their marketing plans. Therefore, they lead the customers across their decision journey for their client's brands. 
3. Clients need to identify conductors within their teams - I believe time has come for CMOs to look for conductors within their teams who demand and define the "tight connections" between the outcomes of each of these specialist disciplines & orchestrators within these specialist teams to make this happen.

I recently received a mail from my favourite airline Jet Airways, that I have been downgraded! I am a member of their loyalty program for years now! And this is not the first time this has happened to me. It also happened in 2001 and 2002 too.

The letter read - "...since you have not had enough flights with us, you will be downagraded. Our Dynamic Tier Review (DTR) formula, unique to Jet Airways - DTR is an award winning, multi-period and multi-criteria-based tier review. It has no precedent anywhere in the world. With DTR, upgrade to the higher tier is quicker and tier renewal is easier. The DTR evaluates a member's tier based on Tier Points and Tier JPMiles earned....."

I was disappointed. As a customer, it did not matter to me if the DTR was award winning for Jet Airways! It surely did not work for me ( the downgrade letter was templated too with such high sound words and sentences!). 

It made me think about the structure of current loyalty programs across the world and their relevance when loyal customers like me are click away from the next best offer!

Here are some questions that came to my mind:

1. In a year of recession and tough 2 years for business, I was suprised how the DTR did not take care of this business environment. I did'nt fly so much as Jet would have wanted. So, Jet's view of my loyalty is transcational - fly more( at full price or premium prices and get rewarded more!). I too will behave the same way in the future, I presume. Question #1: Can't loyalty programs be flexible, adapt to new environment, and why reward only transactional loyalty?
2. Given the unsettling business environment that it was over the last 2 years, why would me even as a "fiercely" loyal customer, travel in Jet if the fares were not competitive. Finally, if there is no value, loyalty cannot be bought with points. Question # 2: When there is a challenge of intrinsic value in the product,  will loyalty progams deliver - No. It is better to focus on the product rather than upset customers. Companies must know, customers will move on in such circumstances!
3. I have been surprised with their loyalty program  not paying attention to customer experience, in spite of being a Citibank-Jet Platinum card member. Every time redeeming their upgrade vouchers was a pain. The little travel that I did in these 2 years, whenever I presented the voucher, I was told it was applicable only on full price tickets! Funny, not sure what world they were living in. Question # 3: Do companies that run loyalty programs pay attention to  such little details that affect customer experience? They took trouble  a few years back to invite me to their co-branded card, but forgot to look at my spends and credits to give me waivers at such tough recessionary period.The bank has no clue, whatsover.
   

Loyalty programs are still in their 1.0 version.  Imagine a product that has not changed for 25 years! They still are in an old world order - "spend with us to earn rewards". Sometimes they have to recognize the value that customers get when they are out shopping for options, may not justfiy the reward they earn everytime if they have to stay within these products/brands. They need to transform given the new environment and options in front of customers.

Customer seek value and surely are willing to pay premium for loyalty but recognition, surprises and instant gratification will need to be weaved into these programs - on the assumption value needs to be earned in the customer's mind & wallet.

Rest assured, this is not a rant but earnestly these are thoughts that I had in my mind and coming out of experiences I have had with such programs over time.  

We all know the mobile will become the centre of what consumers do. In the recently concluded Mobile Future Summit, the impact of this device has been summarized quite well. There were several good speakers and here is the essence of what some of them had to say:

Steve David, was a keynote speaker. Steve spent over 30 years at P&G , the final assignment as P&G’s CIO responsible for their Internet Strategy.

Steve laid out the case for Advocacy being the new measure of marketing. It has a lasting impact on the brand, the sales, and the relationship with the consumer. Companies who have a better understanding of the customer via sophisticated analytics and can quickly take the solutions and products that consumer want and need gain long-term competitive advantage. Insights from the market must be processed in real-time that can empower decision making at every level of the company. And mobile is central to this strategic shift. Mobile is being used to attack the counterfeit problem worldwide, in formulating personal recommendations as trust in brands erodes, in collecting analytics, and engaging interactions with products and services using NFC, etc. 

In the session of The Balance of Privacy and Monetization from Consumer Data,  advertisers like adidas want to move from 1-2-many to 1-2-1 relationship with the consumer that increases the volume and quality of the transactions. The valuable variables to track are location, propensity to buy, past actions, traffic inputs, etc. Discovery and recommendations also become important part of the whole process.

I do believe the next phase of customer engagement is on the mobile. The ability to build relationships using content, engagement & micro-transactional engagement using analytics & interaction studies are going to determine the success of brands.

I was just reading an interesting Location-based Marketing(LBM) promotion by Pepsi called Pepsi Loot. It's a great customer marketing example by a leading soft goods marketer like Pepsi. The fun in combining digital marketing with data, distribution reach, loyalty, customer engagement & customer experience is the future.

This is how Pepsi Loot works:

If your are a Pepsi fan, you can now use your iPhone, iPod Touch or iPad to earn credits toward free music by checking in to Pepsi-serving restaurants with the new app Pepsi Loot.

Using your GPS, the free Pepsi Loot app will display nearby Pepsi “Pop Spots,” or restaurants that serve Pepsi products. Once your device’s GPS shows that you’re at the actual location, you’ll be given the option to check in to the site. For the first check in, you’ll receive one Pepsi Loot credit—enough to download a free song—and one credit for every three check ins after. You’ll see a few of the featured artists in the "Loot" section of the app, along with a YouTube portal to artist videos. However, actually downloading your free tunes requires you to go to the Pepsi Loot Store website from an actual computer (and sign up for an account). The app will offer other exclusive deals at participating restaurants.

It's really smart location based Mobile marketing. But, I do have a few questions for brand marketers to consider:

• As  brand marketers, when you run an app in an online world, the world is your marketplace, how do I find my Pepsi "Pop Spots" in India? Your marketing promotions need to move beyond  borders!
• How can Mobile Apps become device neutral? That's when there is going to be mass adoption of such CPG marketing tactics.
• In a country like India, WAP phones, Internet on Mobile, Smartphones usage is still a long way for adoption. The most adopted VAS is SMS!  How does one use LBM to such an environment is critical for mass reach & usage. We need to see growth of  Mobile Apps for emerging mobile markets like India.

Trendwatching has come out with interesting consumer trends for 2010. One thing that caught my attention was - Tracking & Alerting as an important trend for 2010.

I think this trend provides a huge opportunity for companies wanting to take advantage of data-led marketing for their products or services.  

"Tracking and Alerting is something that consumers actually need and want, that delights them, that they crave. They are quite literally asking for relevant information, even giving you permission to provide them with more," Trendwatching.com said.

In the era of privacy and DNC, Tracking and Alerting provides huge advantage for marketers to take advantage of permission marketing. If you were a travel company, imagine a service that let's you alert about long weekends coming well-in-advance ( say 2 months in advance). This will help consumers plan their holidays. It's a huge engagement tool.Hence, planning their travel bookings with them.

Or if I were an insurance company, imagine a service that alerts me to taking an yearly medical check-up or an application that alerts me to my fitness regimen! It's a service that I will really appreciate from my insurance company rather than quarterly renewal notices!!

In my opinion, herein lies a huge opporutnity for companies to take advantage of this trend. The ones who do it, will win the war of customer engagement for 2010.

I have been writing about this shift for sometime now and the need for marketers to take note of this change to take action. Marketers need to evolve to what I call as "inclusive marketing" methods by involving, empowering customers & building an open channel for a conversation with them.

Davide Raab has provided a very interesting perspectiveon this change. He writes about the power of social media getting more importance when it comes to active customer engagement as compared to search marketing as these are an 'explicit group' of customers wanting to be involved and engaged in a particular topic, issue or cause. He has provided a brilliant summary of how the marketing focus needs to change. Take a look at the table on various dimensions: