On September 8th, 2011 at 1:00pm ET, Affinion Loyalty Group will be hosting a webinar, The Bright Side of Negative Engagement.  Loyalty 360 had the opportunity to hear from presenter, Mike McDonnell, Vice President, Product Management with Affinion Loyalty Group; meet the speaker, as Mike shares his philosophy and insights on today’s loyalty and engagement marketplace.  Then, join the conversation, follow us on LinkedIn, Facebook and @Loyalty360 on Twitter  share your, ‘Negative Engagement’ experiences with Mike  and Loyalty 360.  

L360:  Mike, tell us first a bit about yourself and your history at Affinion Loyalty Group…

McDonnell:  I’ve been with ALG for 11 years, beginning in 2000 as an Associate Product Manager for our Value Added Benefits product line. I saw the growth of the Loyalty product and realized that was where I wanted to be so, in 2002, I joined the Loyalty product management team. As a Product Manager, I was responsible for optimizing the way we delivered merchandise redemption services to our clients. After this experience I helped establish a much greater focus on product development and strategic planning to facilitate growth.

My next move was into the world of Client Solutions, where we act as consultants for existing clients and prospects to understand their loyalty needs and develop custom solutions to meet those needs. My work in Client Solutions provided me insight into the inner workings of both our sales team and our clients. This knowledge has enabled a valuable balanced perspective in my strategic role as VP of Product Management & Client Solutions.

Prior to ALG, I went to VCU (yep, the final four Rams!) for both my undergraduate degree as well as my master’s degree, and played soccer for the Rams’ first nationally ranked soccer team.

L360:  What are some trends you see developing in the loyalty and engagement marketplace?

McDonnell:  The best thing about the industry right now is that it seems to be on the cusp of transformation. There are many reasons for the impending changes, but I attribute them to three primary factors:  1) Technology 2) Economy 3) Legislation

1)     Technology. There are major developments and trends to point to: social technology platforms, bandwidth improvements, mobile proliferation, and the world of digital goods—from online gaming to music downloads to electronic certificates—is exploding. Currently 40 percent of adults play games online, resulting in US social gaming revenues in excess of $1 billion. Clearly there is more to come on the gaming front.

2)     Economy. With the possibility of a double dip recession, firms are challenged with limited resources. We are required to look at problems differently, which ultimately forces innovative solutions. Innovation is a silver lining to our economic woes.

3)     Legislation. There are some powerful legislative drivers affecting the marketplace. Consumer Protection Agency, Durbin, Dodd/Frank, Healthcare… For example, Durbin reduced bank swipe revenues by an astonishing 45 percent. Some estimates put that figure for the industry at over $15 billion. These are unprecedented times for our industry and our clients.


L360:  What developments are you most excited about?

McDonnell:  Well, I’m an admitted technology geek, and believe that people having any information at their fingertips in a split second will drive new consumer behaviors. I love that technology sets consumer expectations related to how they should be serviced and in what channels, especially considering how consumers actually expect a mobile browsing experience to be faster than sitting at their PC just because mobile phones ultimately unleashed them from the wire. A recent Gomez study showed that 58 percent of users expect Website load speeds on their mobile devices to be comparable to, or better than, what they experience on their desktops. And, a Forrester Research study found similarly high expectations: today’s patience threshold for the “wired Web” is just two seconds for page load time, down from four seconds only three years ago.

Technology has broken down barriers for us to be more social. Humans have always been inherently social beings, but in the past we were held back due to geographic or familial constraints. Technology has extended our voices and interactions to the world.

With that said, I’m most excited about the social technologies that have exploded in the past 3 years.  From “engagement” to “gamification” to “voice of customer” to “word of mouth,” all of the industry’s hot topics share this commonality: the vital role of social technology.

L360:  What new or developing technologies do you see having the largest impact on the marketplace?

McDonnell:  I think there are two developing technologies that are positioned to be major influencers: monitoring tools and the iPad.

In the past, companies mostly heard complaints. Rarely did they hear about positive customer experiences with their brand. Today, social media makes it much easier for customers to share the good and the bad. Monitoring tools are providing brands a window into both positive and negative conversations and feedback. I saw a disappointing statistic in a recent Harris Interactive study: Only 22 percent of those who left a comment on a social networking site actually got a response. Monitoring tools will assist companies in tracking and responding to those comments. They also can provide valuable input for use in honing a brand’s overall social media strategy.

The iPad, and with it the ability to stream video to tablets and other mobile devices, is a huge technological influencer. According to a report from Javelin Strategy & Research, “As with the iPhone, Apple grabbed the early technological lead with tablets, but competitors are rapidly playing catch?up. In its first three quarters, Apple recorded iPad sales of 14.8 million units. In comparison, Samsung’s Android?powered Galaxy Tab, introduced in September 2010 and available through all four U.S. carriers, has shipped 2 million units worldwide.” Given their ultimate portability, top-notch user interface and wide-ranging functionality, it’s no wonder that the iPad is a leader.

L360:  How are these emerging trends impacting Affinion Loyalty Group and their plans for the future?

McDonnell:  ALG is using these trends to drive our product roadmap and investments. We are focused on social and mobile optimization, website design and making data-driven decisions. All of these initiatives help us focus on our end goal: to convert customers into fans.

L360:  What is your customer loyalty philosophy?

McDonnell:  Focus on customers’ emotional attachment to your brand. Have a strategy. It isn’t all about 1:1 and it isn’t all about mass media. Balance is key. Engage appropriately. Segment, segment, segment and don’t just collect data to collect data. Use it to make good decisions and drive your strategy forward.

L360:  Your upcoming webinar is entitled, “The Bright Side of Negative Engagement.” Can you give us a sneak peak on that oxymoron?

McDonnell:  The Harris Interactive study that I referenced shared some staggering statistics: 79 percent of consumers who had a negative experience with a company told others about it. And, 66 percent of a company’s frustrated consumers were on a mission to discourage others from buying from that company. Especially given the public nature and overwhelming acceptance of social media, negative customer experiences can plague brands, impacting their image as well as their financial success. I will share examples and techniques for recognizing the opportunity inherent in engaging those disappointed customers.

And now a question from Mike for you, the readers, about your experience with negative engagement…

McDonnell:  As I mentioned above, the Harris Interactive study showed that only 22 percent of those who left a comment on a social networking site actually got a response.  Tell me about a negative experience that you’ve had and what the company did to turn it into a positive.

On the flip side of that stat, 78% of people who left a comment on a social networking site did not get a response. So, share a negative experience that you’ve had that didn’t turn out so well.

Mike wants to incorporate your stories into his webinar, “The Bright Side of Negative Engagement.”  Join the conversation! Become a member of the Loyalty 360 Group* on LinkedIn and click here (you must be logged into LinkedIn) or email Loyalty 360 at webinars@loyalty360.org to weigh in on these questions by Friday, September 2.

Register now for the Affinion Loyalty Group webinar, “The Bright Side of Negative Engagement” presented by Mike McDonnell on September 8, 2011 at 1:00PM Eastern.

* New Loyalty 360 LinkedIn group members, please allow a few hours to process approval.

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