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Archive for June, 2011


Creating Effective Loyalty Programs

Tuesday, June 28th, 2011

According to the WSJ, in May 2011 US consumer confidence fell to the lowest level since Nov. 2010.  Although high-end retailers, gas stations, and uniquely branded retailers have seen that sales went up, most retailers still struggle with the increasing costs, price pressure, and the economic consequences of the down-turn.  Today FiG is going to share with you some thoughts on how to overcome this difficult selling season, and our discussion will focus on the topic of creating (or re-creating) an effective loyalty program.

When talking about a loyalty program, marketers should at least understand what they mean by “loyalty”, and whether or not this is something that their targeted customers really care about, so that their loyalty will eventually transform into increased sales.  Though the primary reason of having a loyalty program is to increase the bottom line, the motivations to join a loyalty program varies depending on the consumers’ buying preferences.  When we say loyal customers, we expect them to be passionate about our products, to come back more often than others, and to bring us new customers!  However, most loyalty programs are not able to ignite consumers’ passion.  What’s worse is that the majority of them have no difference from a discount card!

In order to create/re-create a loyalty program:

  1. Marketers should ask themselves whether they really need it: A perfect example is Apple Inc.  Many companies are jealous of Apple, or at least wonder about the magical charm that the company casts among its consumers, who are constantly enthusiastic about their products, who are willing to wait overnight in a long line for latest offerings, and who are willing to Facebook, Tweet, and blog about the products!  And guess what?  Apple doesn’t even offer a loyalty program: BECAUSE THEY DON’T NEED EXTRA OFFERS TO CREATE LOYALTY.
  2. If you do think a loyalty program will encourage consumers to come back and spend more, then think how to differentiate it:  Not every customer looks for discounts, ESPECIALLY if they are loyal to a brand.  Take a moment and think about what is important to your consumer, and why they choose you over your competitors.
    • If your customer is price-sensitive, then discount card may be a  perfect loyalty program.  However, the biggest disadvantage of constant discount is brand dilution and eroded profit margin.
    • If your customer is willing to pay for better service/quality, then design a loyalty program with different service/quality levels. United Airlines’ mileage program is a good example.
    • If your customer is experience-oriented, then offering different experience options may be a good differentiator of your loyalty program. The Marriott’s membership is a good example.

In conclusion, by understanding the values that your targeted consumers care about, marketers will be able to create loyalty programs without sacrificing profit margins.  Remember, the loyalty should be towards your brand and not your price point.

Logo Design and Website Redesign – Rodine Communications

Thursday, June 9th, 2011

FiG Advertising and Marketing is proud to announce the launch of Rodine Communications new website.   This was a multi-faceted project that involved creating a visual brand identity and logo for the first time in the company’s history.  From there

New Rodine Logo

business cards were designed and printed and the new website design was developed.

 

Their previous site went unchanged for several years which not only dates the information and design but holds them back in the eyes of search engines.  By launching their new site last month Rodine has a fresh website design with some initial SEO (Search Engine optimization) that is aimed at increasing revenue and brand awareness.

Take a look at the before and after:

The old Rodine.com site, click for full-size view

The New Rodine.com
The new Rodine.com, click to visit the site

Can FiG design your new logo and website?  Let us know.

Google Wallet’s Mobile Inspiration

Monday, June 6th, 2011

On May26 Google launched its mobile-payment platform “Wallet” which is likely to turn smartphones into mobile wallets.  According to Bloomberg, the Wallet system, which is supposed to use near-field communications (NFC), will work on selected Android smartphones that are sold on Sprint Nextel’s network.  The system will be tested initially in New York, San Francisco, Los Angeles, Chicago, and Washington D.C.

Additionally Google doesn’t plan to charge transaction fees for Wallet purchases.  The goal of this new offering is “bring together all pieces of ecosystem to create a new shopping experience” (sic), according to Stephanie Tilenius, Google’s VP of Commerce.  “We are not making money in commerce, we are making money from our core business, which is advertising”, she said.  But we at FiG think that Google will benefit from more than just partnerships and advertising income.

Here is how Wallet works: Consumers either can input their Citi Mastercard info or use a pre-paid Google card to set up accounts on their phones.  They can then load the account with coupons and other loyalty programs.  When they shop they simply need to wave their phone in front of a receiving device to process a transaction with any discount or reward points going in immediately.

So what Google gets from this is not just a single transaction, but also consumers’ data that will be analyzed and interpreted as consumers’ buying preferences, purchasing patterns, and decision-making process.  This is valuable information for any retailer or business and  it will be a way to enable Google to attract vendors and companies to partner with and implement the device.

Furthermore, if you recall a conversation that we had in April when discussing Google’s business strategy, we talked about the potential of Google’s next moves and how these moves will secure Google’s current position as a dominant searching engine without too much dependence on advertising.  Now the answer appears to be much clearer–the mobile focus.  And the Android system and Wallet can be a very good start:

  • Second, mobile will create the ability to individually target more people than any other channel.  Although Google still has to make money from advertising on Wallet, it changes the game. On its search engine Google attracts advertisers primarily by the amount of daily users and the frequency of daily usage. However, if the Wallet is proven to succeed, Google can not only provide a platform to cover the audience but also can target a specific segment and provide the advertiser direct feedback for future improvement.
  • Finally, it is the computing, the connectivity, and the cloud technology that drives the mobile adoption.  Google has already been leveraging all the connectivity and the power of cloud computing starting with location via Google map.  By further developing its mobile technology, the Wallet for example, Google can target mobile ads by location, service carriers, individual devices, and specific transactions.

But of course, either the mobile battle or the mobile payment war won’t be easy for Google.  Apple, with its iPhone which currently ranks number two in smartphone data usage, has claimed that they are working on a similar device.  Square has been improving their mobile payment process, and ISIS plans to roll out its service in early 2012. In order to have a strong presence in mobile channels Google still has a long way to go.

 

 

Ad of The Month: Heineken vs. Dos Equis

Wednesday, June 1st, 2011

At the beginning of the year, Heineken introduced a new global brand campaign with a film titled “The Entrance” (created by W&K).  In the film, Heineken demonstrated a mystique-filled and desirable gentleman by making the ultimate party entrance.  The spot includes various people gathered in a large mansion–one that seems to be briefly put on hold when the gentleman walks in.  Everyone wants to see him, and he has a splendid time with each very unique individual he comes across.

Then last week, Heineken released the sequel– “The Perfect Date”.  Just like “The Entrance”, this time the hero lead his date through a restaurant kitchen, again attracting everyone’s attention, and “charged the brand further with an aspirational and cosmopolitan personality“.

Heineken says that both of these films see the “entrance” of Heineken’s new universal tag line “Open Your World”, conveying the brand with a worldly, open-minded, and confident personality.  FiG agrees that the film nicely conveys this message by engaging consumers from the beginning to the end in the 2 commercials.  But at the same time, this new campaign seems to be taking a significant cue from the “most interesting man in the world”, the famous campaign series by Dos Equis, which is a brand owned by Heineken since 2010.  In “The Entrant” the man is visually defined to be the most interesting man (at least) in the room by the assortment of archetypal characters he is currently engaged with, the “Bond Villain,” the Kung-Fu master, etc… while “The Most Interesting Man in the World” has lived a life of absurdly masculine adventures conveyed verbally with only light visual context.

One idea implemented well in two different ways.  However, the most interesting part is not whether Dos Equis is planning to refresh consumers about the most interesting man, but whether or not Heineken is going to take over this successful campaign concept, given the fact that “the Entrant” is quite similar, and Heineken now owns the Dos Equis brand.