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The best marketers have mastered the art of getting people—specifically, customers—to change behavior. Profitably. Predictably. And consistently over time. This is a remarkable talent.

I myself find it hard to get people to change. For example, when I tell my teenagers to, shall we say, adjust their behaviors, they seem to get irritated and usually don’t follow through—for some reason. I then escalate the strategy and sell the benefits of the change I seek. I review the current deficient state (about them), develop attractive outcomes (for them), and enthusiastically present those benefits (to them). This strategy demonstrates slightly better response, but its high wear-out factor generates a lousy ROI. So as not to threaten my self-image as a marketing artist, I resort to the time-honored strategy of compelling them to change with an offer they can’t refuse. This has great short-term response, but I suspect my kids’ long-term loyalty to that brand of parenting may be declining.

Telling. Selling. Compelling. How well have these worked for you? Or the better question: How often have you changed your behavior based on someone telling, selling, or compelling you? Because we humans are biased in our perceptions and worldview, these strategies don’t work very well to promote lasting change. Either the results don’t measure up to the effort required or the relationship degrades over time—not exactly a loyalty marketer’s dream. Human beings commit to change their behavior only when they change their fixed thinking and attitudes. In other words, when they are darn good and ready.

Over the years I’ve picked up a fourth approach to profitable, lasting change management. I call it “Dwelling”—living into the situation of those you would change, and making the wise decision to change yourself from within that experience. As Gandhi said, “Be the change you wish to see in the world.”

When we dwell in the situation of the other, three important things happen: First, we come to understand. Not merely “learn” cognitively, but also “feel” deeply and emotionally the other’s situation. Second, we change. We resolve previously unrecognized blind spots in our understanding as we “adjust our mirrors” to see a suddenly clearer reality. Third, and most important, the intended objects of our original change-management quest recognize how we’ve changed and become more willing to change along with us.

As a loyalty-marketing discipline, “dwelling” can be accomplished through a few straightforward actions:

Eat your own dog food: When I was a food-industry brand manager, I participated in tasting sessions to judge product quality. Those were fun when I worked in Cereals and Snacks. Not so much in Pet Foods, where one R&D scientist actually taste-tested his creations. That type of deep commitment became known as “eating your own dog food.” Most marketers visit their stores and may shop their brands. True professionals live into their brands as customers. That means staying in your hotels, eating at your restaurants, flying your routes, listening to your call centers, and using your own credit and payment cards.

Learn loyalty: Participate in your loyalty program. Granted, this isn’t always possible or desirable. You may be employed by a health care facility and be perfectly fit, or by a child-oriented retailer and not have kids, or by a brand of adult diapers and…well, you may not need your company’s products (at least not yet). In such cases, organize and join loyalty customer user groups. Dwelling transcends merely sampling your customers’ interaction with you, and then heading home for a cold one.

Seek status: Become a “best customer” to experience the loyalty features and benefits—and the hassles and limitations—encountered by your actual best customers. Build your balance, earn your status, redeem your rewards. Similarly, every one of your company’s senior leaders should be active in your loyalty program. I know a loyalty practitioner whose entire executive committee publicly tallies their monthly program activity in a friendly yet serious competition for top status. They of course have no trouble understanding their program’s design, or recognizing improvement recommendations when they see them. In fact, they themselves have initiated many enhancements.

When your best customers perceive that you care about your loyalty program not just as a marketer, but as one of them, you’ll have a better program. And you can look in the mirror and answer “yes” to the question “Would you be loyal to you?”

About the Author

Jim directs the advancement of enterprise loyalty at COLLOQUY, an endeavor guided by his almost 30 years of managing in marketing, strategic planning, business development, innovation, and communications. Jim also assists with COLLOQUY’s loyalty workshops, seminars and conferences, and serves as an academic liaison for colleges, universities and thinking institutions performing research on Enterprise Loyalty.

Prior to joining COLLOQUY in 2010, Jim founded his own company and was a principal at BUILT TO LEAD, a leadership development practice based in Central Ohio. From 1997 to 2008 he worked at Alliance Data Inc., most recently as Chief Marketing and Planning Officer and as a member of the Executive Committee for the Retail Services division. Earlier, he served as Senior Vice President at Information Resources Inc., consulting with such clients as Procter & Gamble, Kraft USA and ConAgra frozen Foods.

A resident of Columbus, Ohio, Jim serves on the Advisory Board of The Initiative for Managing Services at The Fisher College of Business, The Ohio State University, and is an MBA-level instructor in Services Marketing at OSU. He and his wife Lauri have three children.

For many European food and grocery companies the post-recession market has been dominated by the theme of providing value to shoppers – communication of prices, promotions and product performance shouts from retailers’ aisles and manufacturers’ advertising campaigns.
While ‘value’ has been the constant undercurrent of recent years, IGD research has shown that a collection of ethical and environmental sustainability themes also resonate with shoppers. Therefore ’values’ offer a second strategic lever for food and groceries companies – a potential beacon creating opportunities for companies to differentiate their offer and create value for their businesses.
In our recent conversations with shoppers across Europe, however, the desire to find value in their values has become stronger than ever. For example, in our latest consumer report Shopper-led Product and Range Innovation, we discovered that three in ten shoppers are looking for improved product values as the key factor that attracts them to try a new product. Of these shoppers, three quarters are also motivated by strong value perceptions.

Shoppers sharpen their ethical focus

Interest in ethical and environmentally sustainable products and issues continues to grow among European grocery shoppers. Our latest European shopper report Ethical and Sustainable Shopping found that 86% of shoppers in France, Germany, Great Britain and Spain are now interested in at least one aspect of ethical shopping – an increase from 81% in 2008. Although headline interest is growing, shoppers however are limiting their ethical focus. In our latest findings we have again segmented shoppers into five ethical segments and found that in 2010 the proportion Ethical Evangelists, the most ethically engaged shoppers, has declined in all European countries in our research.

We have, though, seen the proportion of Aspiring Activists and Blinkered Believers grow. These are shoppers who actively engage with one ethical issue only, or are interested in more ethical issues than they actively buy groceries to support. Rather than dropping their ethical standards following the recession, many shoppers have therefore focussed their ethical consumption on the single ethical issue that concerns them most.
This shift, from broad engagement to narrower focus, reflects the difficult trade-offs many shoppers are currently making when seeking value while shopping for groceries. It does, though, represent an opportunity for producers and retailers of ethical products. There is still strong interest in ethical issues that may again translate into purchase action with a return to a more stable economic situation.

Five ethical shopper segments

• Ethical Evangelists are interested in, and actively look to buy, a range of ethical issues
• Focussed Followers have made several steps into ethical shopping, but pick and choose their areas of interest
• Aspiring Activists have aspirations and interests which outstrip their current ethical shopping behaviour
• Blinkered Believers buy into only one ethical dimension
• Conscience Casuals do not actively shop ethically, and show little or no interest in doing so

In all four markets surveyed, the proportion of Conscience Casuals, our least ethically engaged segment, has dropped. These shoppers, though, do still provide an opportunity for manufacturers and retailers of ethical products. In our discussions with them, it was clear they do have some interest in ethical issues and were often reasonably well informed, it was just something they did not consider when grocery shopping.

An ethical carrot rather than a sustainability stick

We asked British shoppers how they felt grocery retailers and manufactures could help them to make choices that would be most effective in protecting the environment The feedback was clear, shoppers would much rather be encouraged with an ethical carrot than forced into specific behaviours with a sustainability stick.

The most popular tactic that shoppers requested to help them make environmental choices was the provision of incentives. Overall, just under half of shoppers mentioned this, with one in four identifying it as the most appealing tactic. This compares to just one in ten shoppers who suggested penalties for people buying the most environmentally damaging products.

Hence, through seeking promotions, long-term price savings or loyalty mechanic benefits, shoppers are again asking for value for their values. This appetite creates the opportunity for manufacturers and retailers to positively encourage or incentivise shoppers to change behaviour in favour of ethical products. Some such activity is already underway – for example, in Britain Procter & Gamble has recently worked with Ocado to promote environmentally friendly lines, offering a 30% discount through its Future Friendly initiative.

Balancing the twin levers of ‘value’ and ‘values’ continues to create opportunities for the food and grocery industry – and the current feedback is clear, shoppers expect values with value.

About the Author

Ben leads IGD’s Shopper Insight team. The team undertakes primary shopper and consumer research on the key trends in our industry, and specialises in pulling out the insights and implications for grocery businesses.

IGD’s shopper and consumer research provides a landscape perspective on shopper behaviour, to help you get above your category and understand the macro-drivers – from store, channel and product motivators to ethical attitudes. In bespoke projects, we also get under the skin to help you understand what this means for your category. Ben leads all this research, and can work with you to develop sustainable business strategies based on the full breadth of our robust shopper insight.

Ben started his career in the market research team at UK retailer Safeway, before undertaking roles in competitor analysis, promotions management and finally Investor Relations, working on the Morrisons/Safeway activity.

Ben joined IGD in early 2004, firstly as international retail analyst, before managing the research on IGD’s subscription website Retail Analysis. He has finally gone full circle back to market research to undertake his current role.

Ben is a very experienced presenter, regularly delivering our shopper and retail insight across Europe, from bespoke boardroom briefings to large conferences. You can use his breadth of skills and first-hand experience to help you with a bespoke project, a training brief or to add value to an internal event or conference.

When it comes to luxury store retailing, properly rewarding a customer who spends $200,000 a year could be as easy as a walk in the park, or Park Avenue. But recognizing those dedicated shoppers who spend upwards of $1 million a year takes more than diamond points – this kind of shopper requires sincere eloquence.

It’s a high-class, and at times bewitching, problem.

After all, identifying these shoppers is not difficult. Luxury comes with an implied level of unparalleled customer service, so the top-tier shopper often develops an intimate relationship with her sales associate. That associate in turn becomes a de-facto ambassador, loyalty mechanism and extension of the retail brand.

The trick then is combining that on-the-ground intelligence with shopper data to identify a loyalty reward the luxury consumer finds of real value. These are shoppers who can literally afford anything they want, remember – there is no question of need. Rather, it comes down to delivering a one-of-a-kind service or experience that falls squarely within their values.

This is not exactly a revelation – wealthy shoppers have long equated luxury with their life experience. But in the past couple of years, the top-tier consumer has been changing how she shops, opting for private services rather than buying on the sales floor, and having items shipped home instead of advertising her splurge on the street. This indicates that even the exceptionally affluent are sensitive to flaunting their wealth when so many others are suffering economic hardships.

Understanding these philosophical shifts is critical. While average spending by luxury consumers rose by almost 30 percent in 2009, it was driven by the much smaller, super-affluent segment with a household income of at least $250,000, according to Unity Marketing’s 2010 Luxury Report.

The Ultra-Luxury Sweet Spot

The challenge is that for most loyalty programs, hard and soft benefits need to escalate in value and importance as membership levels climb. These perks are packaged to entice the customer to spend her way into that next level of recognition. But the ultra-luxury shopper is defining that next level herself – she values the importance of being unique.

Translated into fashion, this means she wants to ensure that no one else is going to turn up at an event wearing the same creation.

Understandably, there is fierce competition to impress, woo and retain her. Those merchants winning the race are delivering the kinds of recognition that make these shoppers feel truly remarkable, even in their privileged surroundings.

For instance, I know of one retailer that partnered with a top celebrity chef who was opening a new restaurant in a major metro market. The retailer invited 100 of its best customers to attend a pre-opening dinner, giving them the exceptional opportunity – and bragging rights – to try something before thousands of others.

The same imagination can be applied to charity events or fundraisers. A shopper’s level of spending could benefit the symphony, or cancer research. It is simply a matter of identifying what she connects with.

Fashion Secrets, Top Designers

The point is that retailers cannot rely on standard incentives to engage this special group of shoppers; their loyalty transcends traditional rewards.

Rather, they must pair their customer purchase data with the personal expertise of their sales associates, or brand ambassadors. While the data will hint at future shopper desires – a diamond bracelet to match a necklace; shoes to match a purse – it is the sales associate who can gauge the shopper’s values, her social calendar and the circles with which she socializes.

This requires a thorough understanding of the merchant’s loyalty program throughout the store, from the stock room to the register. If a retailer schools its best associates on just how their good actions benefit the entire company (as well as their weekly compensation check), these employees will strive for the next-highest tier of service.

At Saks Fifth Avenue in Houston, for example, one sales associate offered to catalogue the closets of his very best clients, recommending what should be kept and what should be donated. A great service, but then he took it a mile higher by sharing his knowledge of the Houston social calendar to ensure his clients have an unrivaled, stylish look for an event. His in-depth knowledge of his customers, the local marketplace and fashion keeps his clients coming back.

Luxury in Knowing

With such rewards, luxury retailers not only will effectively recognize the top 10 percent of their clients, they could expand that shopping segment to represent 15 percent or 20 percent of the total.

I believe the key here is to provide a service or an experience that causes the luxury shopper to shift her spending from one retailer to another. Straightforward reward points won’t necessarily do that – they may simply be used toward buying an item she would have gotten anyway. But an invitation-only evening with a top designer, how do you put a price on that?

Saying “thank you” to a shopper who just spent $1 million at your stores requires creative currency of an equal amount. Not only should you do all you can to ensure her loyal business, but the offering should be one-of-a-kind, and not something that can duplicated and repackaged by a competitor a few blocks – or key strokes – away.

About the Author

As a LoyaltyOne consultant, Guy advises on best practices in all areas of loyalty marketing, including program development and implementation, relationship marketing strategy and tactical planning and execution. He draws on a wealth of experience in creating loyalty solutions for high-profile brands, with a particular expertise in supporting strategic marketing goals with innovative tactics designed to drive revenue and market share. He is part of a team of senior consultants who work with many well-known consumer-focused companies, including Walgreens, Target, Canadian Tire and Ulta Cosmetics.

Prior to joining LoyaltyOne, Guy held a senior position with Sears Holdings, where he managed national customer-centric loyalty initiatives for Sears and Kmart. Previously he was part of the management team at Limited Brands, where his loyalty marketing work in support of the Express brand included CRM, email/web-based programs and the redesign and relaunch of a private-label credit card. He began his career in information systems with AT&T and subsequently progressed through a series of product management and brand/customer marketing roles with Sabre Holdings.

Based in Chicago, Guy has an MBA and a B.S. in Economics from Southern Methodist University. He also completed a graduate exchange program in international marketing at the Instituto de Empresa in Madrid, Spain. Guy can be reached at gdilger@loyalty.com.