PPPPaying for Attention (Four Ps #220)
Redefining Loyalty, Hunting a Serial Killer, and Google Under Attack
When it comes to consumer and brand love, loyalty is now less of a warm and fuzzy feeling and more of a numbers game.
Harder to earn. Harder to maintain. So how loyal are you?
When booking personal (or business travel), is price more important than convenience? Will you use Google products over all other search tools no matter what? Would you stay loyal to brands that don’t make efforts to help reduce the severity of Climate Change?
If your answer to any of these is “No” or “It depends,” well keep reading…
THE PERSONAL: EARNING YOUR LOYALTY
A diamond is supposed to be the most indestructible mineral on earth. Let’s hope that’s the case for our Diamond Medallion status with Delta.
Last week, the leading U.S. airline announced significant changes to its SkyMiles program, one of the biggest and most revered loyalty programs in all of brand marketing. These changes will disrupt the loyalty bonds that Delta had built with its most loyal customers. But in a bad way or a good way?
😡 Many travelers feel betrayed and disheartened, expressing their outrage on social media. Delta customers are upset because loyalty programs are meant to involve mutual commitments, yet Delta can unilaterally change the rules, leaving members who earned status with no ownership or recourse if they decide to switch airlines. On the other hand…
🤓 Others believe Delta's comprehensive product offerings, including improved WiFi, on-time performance, and Business Class experiences give them a competitive edge in this loyalty program transformation. This has also sparked discussions about using blockchain and smart contracts to create more transparent and mutually beneficial loyalty programs.
✈️ My take: Delta is likely planning beyond this, aiming to create an expansive ecosystem centered around this program, encompassing various aspects of the consumer journey, such as car rentals, hotels, meals, shopping, and vacation packages, rather than focusing solely on flights. They’ve seen a significant increase in traveler engagement across the ecosystem, with over 50% more participants compared to 2017, and anticipate this trend will continue to grow.
⚖️ The situation highlights the delicate balance between brand loyalty and consumer satisfaction in the world of marketing. But it doesn’t need to be that hard (right, Lego?).
Situation: The cost of acquiring new consumers is 5x higher than the cost of retaining existing ones. While acquisition allows you to increase the amount of customers you have, customer retention allows you to maximize the value of customers you have already captured. It's not an either/or, but budgets can and certainly should shift to be more efficient.
Challenge: Yet... they haven't. And too many brand marketers are making one big mistake over and over again: confusing strategy with tactics. This is what separates the mediocre brands from the mighty ones. Strategy isn't about what your TikTok content should be or which influencer to work with; those are tactics.
Threat 1: The engagement ecosystem is evolving. Consumers jump across various channels and have different identities. It's more complex than ever, which makes it challenging to centralize their activity or meaningful data. Add in influencers and you're now even more fragmented in more places. No wonder why it's creating a ton of missteps, mistakes, and inefficiencies.
Threat 2: Traditional loyalty programs suck. They were designed for in-store transactions and DTC commerce ONLY, struggle in this multi-platform environment. They didn't account for creators and influencers. Or even most media and social channels, or even ecommerce platforms. Outdated loyalty programs lack the capacity to foster deeper engagement through connectivity, continuity, or community building. They have limited capabilities to offer dynamic rewards, unique experiences, or collaborative opportunities. So maybe Delta's changes set them up for more expansive thinking? It remains to be seen.
Opportunity: At the core of every brand strategy is defining the value exchange with target consumers. Tactics are the execution of that value exchange. Offline, online, onchain throughout the evolving engagement ecosystem. A balanced value exchange, where brands offer benefits to consumers in exchange for loyalty, creates lasting customer value.
Solution: This much IS clear. To create connections with consumers, earn their loyalty, and maintain a long-term relationship, marketers must do 3 things:
Design a value exchange balancing what brands and consumers each need.
Develop a CRM strategy for an evolving cross-platform environment.
Deploy the tactics: entertaining / informative content, engaging experiences & relevant rewards.
For Delta: The social media criticism from those who may not be thinking about the broader strategy at play. While they are increasing rewards thresholds, they may also be working to simplify and enhance point-earning opportunities. The existing program and the complexity of its evolution necessitate a multi-step approach to adapt to a changing world and lay the foundation for an onchain integration. Lufthansa is doing this in its transition to a blockchain-based, interoperable program. Long-term, I envision Delta extending the program's reach across various touchpoints beyond flying, encompassing social interactions, partner activations, and more.
THE POLITICAL: How to Survive History's Most Dangerous Serial Killer in History
In the shadowy annals of history, where the most sinister serial killers become memorably infamous, a new name has emerged. It's not a person, but a force that lurks among us. Climate Change, the most dangerous serial killer of all time, strikes with relentless precision and has already claimed countless victims. Instead of a knife or gun, it uses rising temperatures, catastrophic storms, and creeping environmental devastation to sow chaos and destruction on a global scale.
When there's a serial killer on the loose, the hysteria and the hype actually creates a situation of heightened awareness that often helps catch the killer. That's what been missing in the nascent fight against Climate Change. And it's just what we need right now.
Last week was something called "Climate Week" in NYC. While I wouldn't have specifically known this if not for a friend posting about it on LinkedIn, it was impossible NOT to see and hear the loud, smart voices taking to the streets:
🪧 Gen Z activists marched to demand an end to fossil fuels, expressing anger and frustration at the impact of climate change on their generation. They called on U.S. President Joe Biden to halt new oil and gas projects, phase out existing ones, and declare a climate emergency.
💪 The protest saw participation from political figures like Rep. Alexandria Ocasio-Cortez and actors Susan Sarandon and Ethan Hawke. Organizers estimated 75,000 participants, with a focus on fossil fuels and a significant percentage of first-time protesters.
In the face of an ongoing climate crisis, where weather catastrophes are happening with increasing frequency and devastation, we stand at a pivotal moment in history. Our choices today will determine whether we leave a sustainable world for future generations or perpetuate a path of irreversible environmental damage. But we have a narrow window of opportunity to make a difference. It will require a profound shift.
To address the climate crisis, we must believe in our ability to bring about change.
Optimism is a powerful force in tackling climate change and we must remind ourselves of the progress we've made…
Prioritize clean energy sources. We have to cut carbon emissions by at least 50% by 2030 and reach net-zero emissions by 2050. We've got more options than ever for electric cars and renewable energy.
Artificial intelligence can optimize renewable energy usage, making it more reliable. However, we must also use technology responsibly, considering potential drawbacks and unintended consequences of their use.
Amidst the era of misinformation, we must also separate fact from fiction to drive political action. Non-violent political protest and supporting new leaders can bring about significant change. Change has historically occurred when around 3.5% of a population engage in non-violent protest.
The options are clear: take action now or continue to live in fear in this serially murderous, increasingly unlivable world.
THE PRACTICAL: Love a Good Statistic?
You may be wondering where I get my inspiration for thoughts, ideas, and content. Honestly, I ingest more newsletters and social content than just about anyone. But one of my favorites…
Stat Significant is a weekly newsletter featuring data-centric essays about culture, economics, sports, statistics, and more. Are Best Picture winners getting worse? Is Christmas season coming earlier? What is the dollar value of a yard in the NFL? Their newsletter is also on Substack, free, and I promise that I don’t steal any of their ideas.
Check ‘em out. 89% of people reading this will love it (the rest will probably just like it a lot).
THE PROFESSIONAL: The DOJ Takes on Google
In a world where Google reigns supreme, the U.S. Department of Justice (DOJ) has decided it's time to rain on their parade. The DOJ has spent long years crafting a case against Google, accusing the tech giant of using its search engine dominance to squash the competition. But what's really at stake here is not just Google's fate; it's the future of antitrust law in the United States. Hold onto your search bars, folks; this is the most significant tech case since the invention of the floppy disk.
Why the DOJ is Upset: The DOJ's beef with Google centers on the web of default search engine deals it has with tech giants like Apple and Samsung. Google secures these deals, becomes the default search engine, and voila, it amasses an army of users and their precious data. This data, in turn, refines Google's search results, creating a never-ending cycle of supremacy. The DOJ's job is to prove that Google didn't climb to the top just because it's "the best" but because it played dirty with its power and piles of cash.
What Google is Saying: Google insists these practices are just like a brand paying for premium shelf space in a supermarket. In their view, it's all about enhancing consumer access to their supposedly superior product. Plus, those multi-billion-dollar contracts, including a cool $10-15 billion to Apple alone, give them an advantage that startups can only dream of. The average user might not even know they have options, let alone how to change browsers. It's all about catering to the tech-challenged masses.
If the DOJ wins, it could mean anything from Google's complete dismantling (unlikely ) to forcing consumers to pick their search engine (like in Europe), European-style. And it would mean more than just a slap on the wrist; it would be a makeover for Google's business model. But if Google wins, it's party time in Silicon Valley. Tech titans everywhere would breathe sighs of relief, and Google could ride its data-rich empire into the A.I. arena, where information is the new gold rush.
This trial isn't just a courtroom drama; it's a test for antitrust laws in the digital age. As we watch this case unfold, the big question is whether laws from the 19th century (Sherman!!) can handle 21st-century tech giants in the digital jungle, or do we need to rewrite the rulebook? The digital realm is uncharted territory, and the DOJ is pushing the boundaries of the law. If the DOJ succeeds, it could reshape how we control digital dominance, innovation, and competition.
Whether Google stands or falls, it is certainly a canary in the courtro… coal mine. Just yesterday, the FTC (joined by 17 states) brought an antitrust suit against Amazon. These two cases might just be the wake-up call that antitrust regulations in the digital age desperately need. Buckle up; the internet's Wild West is getting a visit from the sheriff.
THE PARTNERSHIPS:
Marketing Leadership, Agency Wisdom, & Kindness
As CEO of award-winning agency the community, Luis Montero has become a leading authority in multicultural marketing and is instrumental in helping brands connect with diverse audiences. In this episode that coincides with Hispanic Heritage Month, they dive deep into his insights on leadership, agency culture, and creating impactful campaigns. Listen now on Spotify, or wherever you get your podcasts…
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