Firm digs deep to gain, keep customer loyalty

For the folks at the Lacek Group, loyalty programs are entering a new "omnichannel" level that involves customer connection on multiple levels all at once.

With 21 years of experience and sophisticated data mining capabilities, the loyalty pioneer knows the wants and likes of its clients' customers.

Clients know when to suggest a convertible over a sedan for travelers about to pick up a rental car from sun-splashed National, Alamo or Enterprise rental outlets.

They can suggest cruise options to previous Carnival Cruise Lines travelers that appeal to their kid-time needs as well as their grown-up wants.

Accumulate enough points as a Starwood Preferred Guest at one of its hotels and resorts and, in addition to earning a free room, Starwood offers its golf-centric customer the opportunity to bid on an outing with PGA star Jim Furyk or, for its jet-set types, a trip to Monte Carlo to watch a Grand Prix automobile race.

"In the '80s, loyalty programs were all about rewards and identifying unique customers. Loyalty programs now are about engaging customers," said Dan Knudsen, managing partner of Minneapolis-based Lacek. "A reward is just a small part of the relationship people have [with companies]. We are evolving these programs to be more relevant to the customer.

"Data is the core of doing that," Knudsen continued. "If you use Carnival, we know what you did on your last cruise and we know what might appeal to you on your next cruise."

Lacek has doubled in size to 250 employees over the last four years and now occupies five floors of the Oracle Tower in downtown Minneapolis. Revenue has also doubled although the company, a unit of advertising and communications giant Ogilvy & Mather, does not publicly disclose any of its financial information.

Lacek's length of engagement with its customers averages nine years, which is forever for an agency in a marketing business known for fickle and frequently changing relationships.

"We get very deep into our clients' businesses. We're tough to get rid of," Knudsen said. "This is a very measurable science. The more relevant the message, the more engaged the customer is and the more likely the customer is to stay loyal."

Lacek cut its loyalty teeth in the late 1980s in the car rental business with then Minneapolis-based National Car Rental.

"Their strength has always been looking at customer data," said John McDonald, vice president of analytics, loyalty and insights for Enterprise Holdings, the current parent of National. "They helped us invent the arrival alert: 'We know you're coming, don't worry and here are the directions for picking up your car.' And when people return a car they can drop it off and they will receive an e-mail receipt in minutes."

"Everyone will be online all the time and will expect everything to be easy," McDonald said.

Indeed, one of the most significant changes in the world of loyalty marketing has occurred with the advent of social media and the multiple devices consumers use to communicate on a daily basis, including tablets, smartphones and personal computers. Even interactive TV is becoming viable (think of text-to-vote options for American Idol).

"The way we engage customers has become more complex," said Julie Bustos, Lacek's senior partner and senior vice president for technology services. "We have the opportunity to connect through more channels than we used to. If a customer engages with mobile, we can tailor to that. We have a text environment that we can market through. We have an app environment that we can market through."

All of a sudden, "clicks" and "opens" and "likes" in the social media world become relevant to marketing success.

Knudsen said all of the new technology has created an "omni channel" world where a message can be sent at once to consumers through all these different channels.

The key to success is getting the right message to the right customer at the right time.

"It's all about relevance," he said. "It's all about better engaging, better connecting, better retaining and growing [market] share."