August 2016

In recent years, loyalty programs that reward buyers for sticking with the brand have steadily grown in popularity.

Between 2008 and 2012, U.S. loyalty memberships increased by 10 percent per year – reaching over 23 memberships per household.

But for all their growth and popularity, do loyalty programs really pay off for the companies that offer them? A recent McKinsey study suggests that on average, they do not – and may in fact destroy value for program owners. The study, involving 55 publicly traded North American and European companies, showed that those that spend more on loyalty, or have more visible loyalty programs, grow at about the same rate – or slightly slower – than those that do not (4.4 vs  5.5 percent per year since 2002).

Notably, this trend appears to vary by sector, with loyalty focus having a positive impact on hotel growth, but negative impact on airlines, car rentals, and food retail, for example. However, as a whole, companies surveyed that had higher loyalty spend also had EBITDA margins that were about 10 percent lower than companies in the same sectors that spent less on loyalty.

Despite relative underperformance in terms of revenue growth and profitability, over the past five years, market capitalization for companies that greatly emphasize loyalty programs has outpaced that of companies that don’t. This may reflect the hope that meaningful loyalty programs can drive long-term value – and perhaps that data amassed through loyalty programs will pay dividends in due time. Still, why do many loyalty programs fail to deliver this long-term value? And how do the winners manage to buck the trend?

Hallmarks of success, the ones that buck the trend

Companies that have developed loyalty programs that succeed in driving revenue growth share some common characteristics:

Integrate loyalty into the full experience:  Starbucks, the brand that created loyalty by differentiating the ordinary experience of drinking coffee, has also managed to create a strongly differentiated loyalty program. To do this, the company integrated payments and mobile technology with the Starbucks shop experience to make the transaction more enjoyable.

Use the data: The Target REDcard combines loyalty and a valuable discount program – 5 percent at the point of sale. They have moved past the flat “discount-only” model by building out industry- leading data capabilities, using the data to target highest-value consumers (e.g., future moms).

Build partnerships: Despite Tesco’s massive success at using data to drive loyalty, Sainsbury slightly outpaced the giant’s sales growth in the UK for the last three to four years; in part this could be due to a new form of loyalty program. Sainsbury is the anchor retailer of the Nectar coalition, which allows consumers to collect rewards across a large number of non-competing retailers in the UK. Through Nectar, Sainsbury offers a broader value proposition to its customers, and captures external data from coalition partners.

Solve customer and industry pain points: Amazon’s largest success in loyalty is built around solving one of online shoppers’ primary pain points: delivery. For $79 a year, members of the online retailer’s “Prime” program get free two-day shipping, plus free digital content. Prime not only integrates tightly with Amazon’s customer and convenience-focused brand, it also creates a loyalty program for suppliers, who rely on Fulfillment By Amazon for access to Prime customers. While Prime’s stand-alone profitability is a closely guarded secret, it is estimated that members spend over four times more with Amazon than non-members.

Maximize difference between perceived value and real cost: Like most hotel loyalty programs, the major focus of the Starwood Preferred Guest (SPG) program is to attract high-value travelers by offering rewards t for personal leisure travel. Redemptions generally occur on weekends, when these hotels have relatively low occupancy and incur limited incremental cost. Starwood has also developed a series of offerings (e.g., upgrades, flexible check-in, Internet) that are highly valuable to their top customers, but bear little marginal cost. Overall, Starwood’s loyalty program has improved its brand appeal and helped the chain achieve above market growth, despite relatively low overall guest satisfaction scores.

Allocate loyalty reinvestment to the most profitable customers: Southwest Airlines’ loyalty program has been a hallmark of its brand, and the 2010 revamping of the program appears to have maintained its customer appeal, while better correlating its spend to profitability. While most airlines attach rewards to miles flown, Southwest offers rewards based on ticket price. Their loyalty rewards spend remains similar to that of other loyalty-focused airlines (i.e., 8 to 9 percent of revenue passenger miles), but the program is better positioned to drive profitability.

Loyalty programs are not only growing, but they are also becoming more tightly integrated with the supporting brand and shopping experience, offering consumers a seamless experience across point of sale, the Internet, phone and mobile channels. Consumer-facing businesses must think beyond the concept of a me-too, points-based loyalty program. To reap the full benefits of customer loyalty, they must create a differentiated experience, consistent with their brand, to provide a step change in brand preference.

Source: 2014, (http://www.businessinsider.com/effective-loyalty-programs-2014-3)

Once your company grows past the small business stage, you’ll probably provide telephone services to the office through a private branch exchange (PBX) system of some kind—also known as a switchboard. This lets you share a number of incoming phone lines among a larger number of extensions, so it’s not necessary to pay for a separate line for every office employee or workstation, which saves money.

However, you can save even more money by using VoIP instead of traditional public switched telephone network (PSTN) lines. There are many IP PBX solutions available, including popular open source products such as Asterisk.

But the implementation and ongoing maintenance of an IP PBX system requires a type of expertise that your IT staff may not have. And if you go with a commercial product, the up-front costs for the hardware and software may be high.

One alternative is to use a hosted IP PBX service. Just as some organizations prefer to use a Web hosting service rather than run their own Web servers, some find it easier and/or more cost-effective to have their IP PBX services hosted offsite—a solution sometimes referred to as IP Centrex. Let’s look at some of the benefits of hosted IP PBX for organizations.

The Centrex concept

The concept of centralized PBX services (Centrex) came about in the 1960s in regard to traditional phone service; the telephone company hosted the PBX service at its central offices (COs). In early systems, an attendant handled operations, controlling the switching via a complex console.

Centrex service never became as popular as on-site PBX systems, and its primary use was at enterprise-level companies and government agencies. However, the combination of Centrex-type service with IP delivery makes this concept very attractive to many businesses today, especially those in the midsize category.

Advantages of hosted services

A big advantage of using hosted services such as Centrex is that you don’t have to make the initial capital investment in expensive equipment. Further, you don’t need anyone on staff to maintain and troubleshoot it—all of the equipment resides at the provider’s site. These can be important factors for a growing business on a tight budget.

This makes for a scalable solution as well, since the provider usually has the means to upgrade your service easily as you add more users or need more sophisticated features. The number of users is almost unlimited with a hosted service, whereas when you use an on-site IP PBX, the hardware and/or software can limit the number of phones that can connect to the system.

How it works

There are a couple of different approaches to Centrex:

• Centrex IP uses Class 5 switches, the same type of large switch used at the telco CO for traditional lines. Centrex IP adds equipment that allows the Centrex service to run over an IP network. Companies such as Lucent and Nortel offer these types of solutions.
• IP Centrex uses an IP-based server, rather than a telco switch, to provide the Centrex features and functionality. In a hybrid architecture, the Class 5 switch coexists with the Centrex server, but the Centrex functions reside in the server, not the switch. In a softswitch environment, the Class 5 switch is done away with entirely, and a softswitch—a media gateway and applications server—provides the services that the Class 5 switch would have provided.

More sophisticated hosted IP PBX solutions include Web-based management so you retain more control over the service. You can use a browser to perform management tasks, rather than having to request that the provider make changes for you.

IP-based server solutions offer more flexibility. They can be part of a unified messaging solution that includes voice mail, fax, and e-mail integration.

Hosted IP PBX options

As you would expect, the larger telephone companies offer hosted VoIP services.

• AT&T Voice DNA provides a virtual IP PBX solution hosted on an application server. It provides for SIP-based VoIP with easy access for remote users at other sites. Not only does it include Web-based tools for administrators, but individual users can manage their call logs and voice mail through a Web interface.
• Verizon Hosted IP Centrex is available through Verizon’s business services division in more than 200 metropolitan markets in the United States, as well as several European countries, including France, the United Kingdom, and Germany. You can get unlimited, tiered, or metered service, and there are many add-on services (at additional cost) available, including conferencing, voice mail, and calling cards.

But it’s not just the big telcos that offer these services. And in some cases, you can get more competitive prices and/or more features for the same cost from other companies.

• Speakeasy Business VoIP offers a hosted PBX solution that includes conferencing capability and advanced features such as “click-to-dial” integration with Microsoft Outlook, voice mail as e-mail attachments, and a remote office feature that allows users to place calls from any phone as if they were in the office.
• Mendax’s Hosted IP PBX service puts an emphasis on security issues and offers advanced PBX features, such as auto attendant, with no limit on the number of concurrent calls that users can place or receive through the system. It also includes online monitoring and modification of features from automatic voice mail to e-mail forwarding.
• GlobalTone’s IP Centrex service integrates with its VoiceConnect and VoiceSelect services, with usage-based pricing and no upfront costs.

Author: Deb Shinder, 2007

Source: http://www.techrepublic.com/article/can-your-company-benefit-from-hosted-ip-pbx-services/

Many small businesses today are making the switch over to VoIP business phone systems. There are plenty of advantages to using such a service, but a lot of small business owners are overlooking some of the most valuable features. Beyond options like voicemail, call waiting, toll free numbers, call forwarding, and remote operation, you’ll find a host of other features that can help your small business.

1: Door phone entry buzzer integration

This feature allows you to integrate an analog door phone so that you can have a two-way call with visitors and then unlock the door from your phone if you deem them worthy. A great way to upgrade the security of your building.

2: Find me/follow me call routing

Mobile workers will appreciate this feature. Find me/follow me call routing allows you to create a list of numbers where you can be found before the call gets pushed to voicemail. So, for example, you might have your office phone ring twice, but on the third ring, your cell phone starts to ring, and then on the fifth, your home phone. If the list is exhausted, the caller gets sent to voicemail.

3: Voicemail to email transcription

Voicemail to email transcription transcribes your voicemail messages to text and sends them to a preferred email. You don’t have to worry about furiously scribbling names, numbers, and addresses. Take your time and read them in your email at your leisure. This also allows you to file, organize, delete, and search all your voicemails in a way that would otherwise be impossible.

4: Music on hold

If your company often has to put callers on hold, this feature is a necessity. Do not subject your callers to terrible elevator music — or worse, silence. This feature allows you to choose what your callers listen to as they wait. (Tip: You can’t go wrong with Journey.)

5: Bandwidth utilization and inbound/outbound call detail reports

Data! As a business, data tracking is essential to figure out where to direct your company’s time and energy. A managed, cloud-based VoIP service can provide bandwidth utilization information that allows you to view data usage over a period of time. Inbound and outbound call detail reports let you view details of your company’s call history, including rate centers, duration, originator, destination, and cost.

6: Call screening

Call screening is an often-forgotten feature of the VoIP business world that can come in handy. It allows you to look at a number on the caller ID and choose how to treat it. For example, if your spouse is calling, you can redirect the number to your cell phone. Or if it’s a caller that keeps trying to sell you energy supplements, you can disconnect them.

7: Coaching tools

Instead of giving your employees advice after they’ve hung up the phone, give them advice while they’re on the call. Two features can help you train and monitor your employees’ on-phone performance: barge and whisper. Barge allows you to listen to a conversation between an employee and a client without interrupting. You can alert them — or decide not to. Whisper allows you to provide advice, tips, and information to your employees while they are on the phone with a client without the client being aware.

Author: Amber Newman/TechRepublic

Source: http://www.techrepublic.com/blog/10-things/10-voip-features-that-can-benefit-your-small-business/