Recently, however, a new trend has emerged in digital retailing. Ironically it revolves around personalized service in real life. It also might turn me into a brand loyalist.

A pop-up ad on Bonobos.com beckoned me to come in for a custom fitting in the New York showroom. On a whim, I made an appointment for that day and within an hour received a friendly confirmation email from Bonobos Guide Emmy Brown. The personable experience continued when I arrived, with Emmy offering me a diet coke and quickly helping me achieve my main objective of finding pants that fit right but didn’t break the bank. I proceeded to try on some other items, then register for an account and place my order on a MacBook Air right there in the showroom.

While this may seem like a lot of effort to sell one pair of pants, for Bonobos the investment is worth it.

“Having a one-on-one, direct service shopping experience creates an organic introduction to the clothing, and facilitates a life-long brand loyalty,” according to Emmy. “Guys can come check out the fabrics, try on different fits and place their order with confidence.”

Bonobos isn’t the only digital retailer experimenting with this approach. Warby Parker, which met its first year sales goals in just three weeks, has a showroom in its New York headquarters, as well as partnerships in eight other boutiques around the country.

‘A one-on-one, direct service shopping experience creates an organic introduction to the clothing, and facilitates a life-long brand loyalty,’ according to Bonobos Guide Emmy Brown.

“It always comes back to the customer,” according to Warby Parker’s Director of Retail Innovation Kyle Ashley, “we want to engage them where they are most comfortable and receptive to our message. Customers want reassurance that they are making the right purchase, and some of our customers feel most comfortable in a face to face encounter – not on the phone or via our website. The key for us is understanding how technology can improve that interaction and keep the relationship going over time.”

For emerging players like Bonobos and Warby Parker the strategy is sound. The overhead of a showroom that doesn’t require inventory beyond one of each item is minuscule compared to hundreds of stores across the country; the lifetime value of truly connecting with fickle consumers such as myself is immense; the insights garnered from IRL interaction with customers is remarkable first-hand market research for a digital business.

Whether or not this strategy can scale for brick and mortar giants like Gap and LensCrafters remains to be seen, but digital behemoth Amazon has certainly taken note. Its Quidsi subsidiary has already been experimenting with a physical store for its BeautyBar cosmetics business and has been hinting at doing the same for its sporting goods business.

In a marketplace that is increasingly fractured amongst very specific targets who demand niche products and personalized service, the upstarts pose a real threat. In the meantime, I’m just happy I don’t have to trudge up and down Broadway to find a pair of pants that fit.

Likes are valuable as a measurable demonstration of consumer interest – no matter how superficial, imperfect, or imprecise that measure might be. Proposed as campaign goals and reported by social media monitors, many see Likes as a form of brand equity, created by the connections between brands and their fans. Likes are public proclamations of affinity that, in volume, boost the public reputation of brands, so it makes sense that a higher number might correlate to greater brand value.

Not all Likes are created equal, however, and not all return the same value to brands. Let’s consider three key types:

1. Earned Likes come from people actively seeking out and Liking the pages of brands they enjoy, those they or want others to think they do.
2. Paid Likes come from those arriving at a page via paid media (think Facebook ads). Paid Likers enjoy a brand but need a prompt to actually Like the page.
3. Gated Likes are drawn out from people forced to click through a “Like-wall” to access content or experiences, often those promoted by some digital marketing effort.

Gated Likes ultimately devalue Likes for all, polluting the relationship brands are trying to build with their fans.

Like-walls transform Liking into a mechanical act – click Like, receive cookie. Locking compelling experiences behind the gate may draw Likes from visitors (many will probably just leave) but that doesn’t mean they’re actually fans. Existing fans may have Liked anyway, so forcing them through a Like-wall returns the same value as a Paid Like (making them Like is unlikely to damage their impression of a brand much). Potential fans annoyed by the Like-wall may Unlike once they’ve enjoyed the content, departing with a negative impression of the brand and some resentment. Those too apathetic to Unlike are just as likely to never bother returning, leaving with a negative or neutral impression of a brand they never felt strongly for either way.

With potential outcomes sounding neutral at best, perhaps Gated Likes do no real damage – only one of the three users profiled above will Unlike once they’ve accessed the content. Brands score new Likes two-times-out-of-three!

Unfortunately, Gated Likes pollute the relationship brands are trying to build with their fans. Fans who Like provide de-facto permission for brands to communicate with them. Ideally, this is because fans want to hear what the brand has to say, as well as advocate on the brand’s behalf, allowing brand postings on their wall. Likes serve as an unpaid channel for brands to reach those who Like them, and to reach out through the networks of those fans. Bribing those already likely to Like a page subverts their intrinsic enjoyment, making the action less enjoyable and less genuine. Forcing the indifferent to Like does not count as “winning them over.” Their fandom won’t grow when a brand they’re indifferent to spams their inbox and wall with updates.

Gated Likes ultimately devalue Likes for all. Even if you avoid erecting a Like-Wall, each time someone else bribes users to Like their page the act of Liking and receiving updates from a brand becomes less meaningful. Sadly, there is not much to be done to avoid others polluting the pool. We might hope for action from Facebook, as they have their own investment in keeping the value of a Like high, but the real response is to lead by example, “voting” down this behavior by creating engaging experiences that aren’t gated behind Likes.

A few months ago, I came across a site from the Biomimicry Institute called AskNature. Some insanely intelligent people have compiled a database of 1400 “strategies” that organisms use to survive against challenges in nature.

The idea is that these “strategies” from nature could solve human challenges in the real-world. Check it:

“Imagine nature’s most elegant ideas organized by design and engineering function, so you can enter “filter salt from water” and see how mangroves, penguins, and shorebirds desalinate without fossil fuels.”

For the challenge “Protect itself from animals that want to eat it,” AskNature has 130 strategies from organisms described in excruciating detail. “Anti-reflective lens” is one such strategy, used by the Hawk-eye Moth as the “inspiring organism.”

AskNature is an inspiration database for common problems in science. Instead of trying to re-invent new processes, consider a solar-panel based on a leaf’s photosynthesis or build a community modeled after honeybees.

For an engineer, AskNature seems like an awesome resource–hundreds of solutions that are proven to succeed. While I imagine that scientists frequently look to nature for inspiration, the Biomimicry Institute has taken it one extra step by codifying the knowledge.

What’s intriguing is that startups, digital strategists–really anyone is business, do this all the time.

How often have you heard, “what if we did something like Pandora?” in a brainstorm. Pandora is AskNature’s version of an “inspiring organism” for the strategy “recommendation engine.”

“What if we did something like Mint?” Mint is the placeholder for the strategy “visualization” and “aggregation.”

Digital Mimicry

“What if we did something like x” is essentially the same mechanism from AskNature. We’re asking “what online organisms could we mimic?”

“Startup x” for “vertical” is essentially a cliche in the startup world. Airbnb is Craigslist for hotels. And Getaround is Airbnb for cars.

These analogs are helpful; we don’t have a term for what Craigslist or Airbnb does in terms of strartegy or function. Going back to biomimicry/AskNature example, “anti-reflective lens” is the strategy employed by the hawk-eye moth to avoid predators. But unless we have the term “anti-reflective lens,” phrasing it as “do something like the hawk-eye moth” is a damn good substitute.

“What if we did startup x for client y” is a simple way to do a bit of biomimicry on successful online organisms. It reminds me of Steven Johnson’s philosophy on where ideas come from. New ideas are commonly just tweaks on an old idea, but molded into a new context. Without going too deeply on his philosophy, we look to existing startups and websites for inspiration. Just like the coffee houses in the age of enlightenment, a broader exposure to successful startups and websites makes the exercise much easier.

Lateral Inspiration

The weird thing is that the most successful online properties and startups aren’t necessarily good analogs for inspiration. I don’t reference Google, Facebook, ESPN, and Yahoo News to generate ideas. But I do look to smaller companies like Uber, Pinterest, Kickstarter, or Turntable for inspiration. That is, “what if we did a Pinterest for client x?” is far more effective than “what if we did ESPN for client x?”

That is, ‘what if we did a Pinterest for client x?’ is far more effective than ‘what if we did ESPN for client x?’

The difference is that the smaller startups are more interesting in terms of digital mimicry. They are on the edge of innovation, and when I use them as an analog for idea generation, it’s far more compelling than the obvious examples. And when a new digital property sprouts up, like Percolate, there’s a new to-be-named strategy (perhaps “content idea filtering?”) to add to my library of inspiration. The entrepreneur/strategist looking for compelling ideas has an advantage if he or she is constantly searching for interesting sites/startups to mimic, combine, and tweak for a new industry/client.

To summarize:

1. Things we care about: strategies from the edge of innovation on the Internet. If the Internet was nature, I care about newly evolved organisms that have adopted interesting/unique strategies to conquer common challenges for survival. That is, referencing a newly discovered microbe that can survive in radioactive waste dumps are far more interesting than inspiration from humans, one of the most carefully studied organisms in history. Note that intuitive strategies such as “walking” and “intelligence” are not entries in the Biomimcry Institute’s database.
2. Things we don’t care about: feature sets. Referencing ESPN’s content or Yahoo’s brand isn’t helpful for idea generation. It needs to be a functional thing, logically fitting into the cliche phrase “it’s this for that.”

The big question: what does an AskNature database look like for the Internet, a sort of library of digital mimicry knowledge?

Suppose I have a challenge for my users, like “learn new things.” What functional strategies does Khan Academy use? And once those strategies are named, we can stop saying, “what if we did a Khan Academy for client X” and start saying “what if we did to-be-named strategy,” inspired by Khan Academy?

In short, I’m talking about real-time anthropology/evolutionary biology of the Internet, tagging organisms with their strategies to same detail and breadth of AskNature. Back to Steven Johnson’s point: it would be awesome to codify it in one place, especially for the folks who can’t stay current with the edge cases of digital innovation.

How hard could it be? Observe how digital organisms are evolving. Tag each organism with a respective strategy. Visualize the data for interesting trends.

The first plan I had was to crowdsource the “it’s this for that” relationships for startups. I assumed that it was pretty hard to examine and track digital organisms, so having a big database of connections would make it a hell of a lot easier.

Example: there hundreds of startups that are essentially “Craigslist for industry x.” For example, Etsy is Craiglist for arts and crafts. Obviously, Etsy has evolved quite a bit since it started, but I’m sure that at its inception, people compared the site to Craigslist in terms of functionality.

Making a Digital Mimicry Database

I created a little site to try to codify these relationships called StartupDNA.

When you visit the site, you’re asked to fill-in an “it’s like x for y” statement for a startup. An example: “Think of a site that’s kinda like Kickstarter. Then fill-in the statement: ____ is kinda like Kickstarter for ____.”

I thought that this would be a clever way to build an evolutionary tree for startups, essentially what the Craigslist diagram above does. Once I had the relationships among startups, I could then begin codifying the functionality that was mimicked. Sadly, it’s really hard to complete “it’s like x for y” statements. It’s not fun unless one has an insane knowledge of startups. The whole mechanic was flawed.

So I dropped the project in favor of a new iteration: WebRecipes.

For several startups, I’ve replicated the work of the Biomimicry Institute, examining online organisms and attempting to codify strategies that they employ. Pandora, for example, has strategies “music recommendation algorithm” and “streaming music” as a solution to the challenge “discover music,” “learn your music preferences,” and “personalized radio.” To make it generic enough for lateral inspiration, I took it one level higher to “recommendation” and “streaming” as a solution to “discovery” and “personalization.” These words became tags. Click on “recommendation” and you can see other startups that employ this same strategy.

The problem with WebRecipes is that it took a shit-load of work. Examining each startup required a good 30 minutes (as it should). Plus, I was really only codifying the startups with which I was already familiar. I wasn’t really getting anything out of the database that I didn’t already know. I abandoned WebRecipes after adding 30 companies to the database.

So after all that work (and coding), I still have the same vision: just like AskNature, I want a database of digital mimicry, a portfolio of interesting sites that make brainstorming new ideas a hell of a lot easier for clients/startups.

Something to think about: is this doable? What direction haven’t I thought of? Is there any value out of a digital mimicry database?

I’m stoked to make something, but I’m not sure if the vision could match reality.

This post originally appeared on Matt Daniels’ blog.

With this in mind, we would like to share five pointers we have developed internally to describe the culture of the office here at Undercurrent. While we recognize blowing a horn about our own culture immediately makes us uncool (cool never talks about how cool it is), we present these principles as an invitation for critique. So, without further adieu, here’s what it takes to work at UC.

1. Pants, not jammies.

The work we do can be done at home, but that work wouldn’t be as good as if it was done in the office where collaboration is high and exchanges encouraged. When you’re here, have a purpose for how you work, individually and with others. Work is not just a series of tasks lined-up, one after the other. It is a creative practice designed to achieve an outcome, each and every day. Have an objective for meetings, worksessions, and presentations. Share that purpose with your colleagues and clients.

2. Not all days are built the same.

Johanna Beyenbach points out the difference between “Manager Time” and “Maker Time”, and that they require different types of time. Whether you’re meeting with the team, hosting a worksession, or just writing emails, decide in advance how you’re going to spend your time. Once you decide how you’re going to spend your time/shape your day, stick to it.

Work is not just a series of tasks lined-up, one after the other. It is a creative practice designed to achieve an outcome, each and every day.

3. Schedule, rhythm, and flow.

Particularly when it comes to client interactions, schedule these at the in-person kick-off of the project. Brief weekly checkins and longer presentations should be in their calendar from day one. This establishes a rhythm and a plan from the start of the project. This rhythm is also helpful for organizing the flow for the whole team.

4. Have a bias towards action.

The result of your time with each other and with clients, in informal conversations, worksessions, and meetings, should normally end with clear action and a mutual understanding of who’s going to do what next. When creating to-do lists, each task should be an actionable item (for example, replace nebulous terms like “consult with, deal with, handle, manage” with more concrete action oriented terms like “call, email, draft, talk to”).

5. Meetings are a specific activity.

Meetings, Worksessions and Presentations are distinct activities, each with their own goals, rhythm, and flow. Meetings are a collaborative device for making tactical decisions about a very specific topic, or for coming together around a broader issue to develop a plan of action for this broader issue. Worksessions come in many shapes and sizes, and are for working out strategic decisions, making progress on an argument, or opening and locking down mental directions. Presentations are for delivering work to the client, and should correspond to the statement of work. If you’re leading the project, it’s on you to make the presentation the best possible experience for the client.

Short answer? The Gap more than seven times over.

Even a cursory glance at many of the most popular tools –such as Radian6, Sysomos, Lithium– show a focus on volume and activity as metrics for success. If your page, wall, or feed is seeing a flurry of activity, you’re winning. If you have more followers than the other dude, you’re winning. It’s no wonder so many brands focus on volume as a valuable metric for success.

These tools hope to help brands monitor their performance, but they all struggle to account for the objectives a brand is trying to solve for. None provide a range of metrics that are capable of assessing performance in truly meaningful ways – measuring where and how digital executions are succeeding or failing and providing insight into the appropriate next steps.

Imagine if you were VP of Customer Experience for a large hotel. It is hardly a stretch to realize that tailored metrics detailing the average time it took to reply to customer inquiries would be useful in explaining, in part, your performance across digital platforms and the value that brings to the business. To help understand how you stack up against your competitors, this (and other) metrics could then be indexed and benchmarked against data points accessible to anyone who knows where to look for them. To top it off, you’d probably want a notification pushed to your community manager’s iPhone if the response rate dropped below a set performance threshold, so they can respond appropriately. Tailoring and matching the metrics to your business objectives and measurement strategy provides much more actionable insights than measuring for volume alone.

At scale, requests for insight like this become increasingly difficult for general-purpose social media monitoring tools to deliver upon. While great for research, general-purpose measurement tools are focussed on high-level reporting, rather than deep analysis. As a result, most who rely on them alone end up with a muddied analysis of their performance, chock-full of false positives.

Recognizing that social media monitoring tools aren’t delivering the right kind of value often leads to a discussion about rolling out your own tools – not something everyone is equipped to do. It can be challenging enough to design your own data mining tools, let alone retain someone who can do something useful with the data, but doing so can pay dividends. Even if you’re not ready to consider building something from the ground up, here are three questions to help you assess whether you’re set up to successfully measure your online performance.

1. Is your measurement framework connected to meaningful data sets, where the output is a cogent, action-oriented analysis that helps inform the decisions you’re making?
2. Does the social media monitoring tool you’ve chosen allow you to plug in your own data sets (static or dynamic) for a richer, complete picture of your performance?
3. Does your level of analysis extend beyond the reports generated by these monitoring tools? They are a great start, but leave out a level of insight that’s only obtainable through a customized approach accompanied by a quality data set.

What has your business been doing to measure its performance online? Could you clearly articulate the pieces of your strategy?

Twenty years ago, building a national (or global) brand was a multi-year, multi-billion dollar proposition. And that’s not just because word traveled slower. Everything traveled slower. Today’s digital and social technology has ushered in new opportunities for brand building that operate under a different construct, defined by different expectations.

Despite these new opportunities and expectations, the four key traits of good brand remain the same. The best brands personify core values, offer unique experiences, are remarkable, and deliver consistency, consistently. Surprisingly, the familiar traits and patterns of great brands become more accessible (and more fragile) in a digital age:

1. Connecting your core values with a community. A great brand is driven by a set of core values. Knowing what a brand stands for, and seeing those values manifest in its everyday behavior, helps like-minded consumers create meaningful connections. The internet allows brands to find and connect with shared interest groups (communities that value the same things they do) in significantly more efficient ways. From MeetUp.com to Facebook, major platforms are bringing people with shared values together.
2. Creating an experience unlike any other. A great brand is noticeably different from its competition. In a world of choice overload and decision fatigue, brands need to take drastic action to stand out, particularly in categories where product parity is high. One area many brands have yet to fully explore is the digital functionality they add to their experience. The Weight Watchers iPhone application is a dramatic value add for a user. Every brand has an opportunity to exceed their category competition here, but only by evaluating their users’ unmet needs and going out on a limb to invent something new.
3. Finding out what is worth talking about. A great brand is remarkable. As Seth Godin has been saying for years, people talk about brands that are doing something worth talking about. The unparalleled transparency and immediacy of the web means that brand builders can (if they ask/listen) get an honest perspective on what is or isn’t remarkable about their brand and plan accordingly. The recent McDonald’s #McDStories Twitter debacle demonstrated that many people’s most remarkable story may not be a winner for the brand.
4. Delivering a repeat performance. A great brand experience is consistent, no matter the time or place. People come to count on their favorite brands as a bastion of reliable delight – note the almost cavalier certainty of the Apple fanboys waiting to buy the iPad 3 sight unseen. What’s amazing about the era we live in is that our collective timeframe orientation has been drastically shortened by technology. It is possible, through a series of smart moves in the digital space, to build an incredibly valuable and trusted brand in very short order – perhaps less than a year. It is equally possible to drive a massive brand into the ground just as fast.

Today’s digital and social technology has ushered in new opportunities for brand building, operating under  different constructs and defined by different expectations.

What this all means is that your brand, any brand, is just a few months away from a major reputation boost. You can identify the audiences that share your values, listen to them talk about your brand or category to find out what’s worth talking about, develop a clear strategy for setting yourself apart, and make a series of quick successive digital investments that will dazzle your customers. We’ve seen State Farm take similar action recently, and the future looks bright for them.

While manufacturers revealed countless Internet-enabled TV sets at this year’s Consumer Electronics Show (CES), YouTube’s VP of Global Content Robert Kyncl announced the Internet-streaming giant wants to remake the online video world to look more like television. In 2011 the service announced a $100 million investment in original content, targeted at studios and big name creators as well as home-grown YouTube stars. At CES, Kyncl confirmed YouTube’s vision of a future that goes beyond cat videos, and involves curating a hundred or so channels of professional content targeted at niche audiences. In short, YouTube wants to remake its streaming video service to look like the cable world.

Google’s video streaming site now delivers 4 billion video views per day and claims an hour of video is uploaded to the site every second. As Kyncl pointed out, many of YouTube’s highest performing channels would rank among the top 20 cable channels in terms of viewership. Machinima.com for instance, a channel focused on young men who play video games, enjoys “125 million viewers watching more than 1 billion of its videos a month,” reports the LA Times.YouTube wants to double-down on this success, increasing the quality of content and curating channels that would more specifically target niche audiences.

Many of YouTube’s highest performing channels would rank among the top 20 cable channels in terms of viewership.

The assumption behind YouTube’s new licensing venture is that they can bring back appointment TV — something the DVR and the Internet effectively killed off. The rise of multi-set households in the 1980s and the expansion of cable in the 1990s fragmented the television audience, splitting viewers across multiple viewing locations and an increasing number of channels. The spread of the DVR and TiVo in the early 2000s, finished the job the VCR had commenced by allowing people to efficiently time-shift their viewing, meaning not only did they not need to huddle together in front of the living room set, but they no longer needed to assemble at the same time to enjoy their favorite programming.

In effect, these developments broke the power of the television schedule — while live sports, news events, awards shows, reality TV finales, and certain programming blocks (Fox’s “Animation Domination” and Cartoon Network’s “Adult Swim” serving as two contemporary examples) can still assemble reasonable numbers of viewers simultaneously, the bulk of television’s viewers consume when and where they desire. The development of effective online streaming offerings from the major networks and Hulu have further fractured the schedule’s draw.

By investing in high-quality content targeted at specific audiences, and transforming itself into a place viewers approach as a set of channels rather than a space they engage with as a searchable patchwork of content, YouTube’s new channel venture could bring back appointment viewing by restructuring the online video experience as one that regularly delivers audiences reliable bites of content.

In effect, their investment aims to create more compelling content, and their restructuring as a series of channels serves to deliver video in an fashion that resembles an RSS-feed. Figures from Nielsen reported by USA Today suggest that “The average person now watches a half-hour of online videos a week, though that number doubles among 25- to 34-year-olds.” YouTube’s restructure aims to position itself as the provider of that regular half-hour or so in an “appointment” model that conforms to the Internet-era logic of personalization and pull-style access, rather than television’s time-sensitive push model.

Time will tell whether YouTube is successful in re-inventing itself, and whether this reinvention means major content creators play nice with it. If successful it would organize the myriad of viewers who engage with YouTube daily into something that more resembles the manageable “audiences” of television than the diverse and active “users” of the Internet. If it fails, there are always more cat videos.

—Ox, Bill and Ted’s Excellent Adventure.

One thing you can be fairly certain about when it comes to marketing and digital is that your competition, by and large, relies on the same measurements and near-term goals that you do. These goals predominate because they are simple to understand and commensurate with traditional measurements and goals. But rarely do they reflect the changing fundamentals of marketing, which results in a status quo that feels somewhat disconnected from the best new opportunities, despite the ever increasing speed with which marketers adopt new buzzwords (usually from a “guru”) that talk to changes wrought by digital. It’s become hard enough to keep up, in other words, but the value of thinking differently about digital has increased, not diminished.

Combating the malaise of this status quo and the inertia behind it requires organizational chutzpah — the willingness to question accepted wisdom and behavior, and to entertain unconventional ideas. Startups typically overflow with chutzpah, but it dilutes as they grow. Today’s most competitive businesses embody it through adulthood, however, and Amazon’s Price Check app constitutes a recent and succinct example. The Price Check app rewards users for scanning merchandise prices in retail stores with their phones, allowing Amazon to offer a lower price on the spot while collecting valuable competitive intelligence. This attack on the biggest remaining advantage physical stores possess caused no small amount of outrage. Senator Olympia Snowe (R-Maine) decried Amazon’s incentive-driven promotion to encourage use of the app as anticompetitive: “Small businesses are fighting everyday to compete with giant retailers, such as Amazon, and incentivizing consumers to spy on local shops is a bridge too far.” Implementing the future at someone’s expense alway results in backlash, and you have to be particularly fearless to do it to a sacred cow like small business, of course.

Combating the malaise and inertia of the status quo requires organizational chutzpah — the willingness to question accepted wisdom and behavior, and to entertain unconventional ideas.

As a counterexample, startups are also falling victim to incrementalism and the status quo and now behave much like anyone else. Let’s call this “Grouponitis.” The symptoms include a laser-like focus on maximizing revenue and market share with nary a thought given to the eventual profitability of it all, combined with a lack of a distinct offering to consumers (despite leading the market, there’s little to distinguish Groupon from its competitors in the eyes of consumers, a fact that is diminishing their first-mover advantage rapidly). Many startups now just amount to new forms of advertising, audacious only in trivial ways. This is the same kind of convergence prominent in established industries, but it is taking place in nascent ones faster than before.

Organizational chutzpah requires committing to a vision of the future you want to see. Developing a marketing strategy based upon that constructed future is a delicate balancing act between recognizing and adapting to the inevitable while remaining distinct and uniquely valuable. Furthermore, lots of marketers trip up and actually end up reinforcing the status quo by trying to derive a sense of the inevitable from an examination of the competition: we rarely see a sufficient level of insight about the future arrive from analysis of the immediate competition. A broad and lateral analysis is essential to determining how the cards are going to fall.

Instead of focusing solely on catching up with the competition (although by all means do that too, if you can afford to), think about what distinguishes you in the eyes of the consumer, and how that unique part of your value proposition will be changed by digital and the impending future. It’s not as hard as you’d think for one major reason: unlike Silicon Valley, which places risky bets on early adoption of truly untested ideas, marketers at established firms have a bit more breathing room before the future arrives. William Gibson said it best: “The future is already here—it’s just not very evenly distributed.” Maintaining the status quo is no longer an acceptable strategy in a world where you could be on the waning side of an unevenly distributed future. We believe the most successful firms will have a broad view of the future, a narrow view of themselves, and the organizational chutzpah to begin enacting that future as soon as possible.

If you spend a day shopping, you’ll repeatedly hear the question, “Are you a member of our loyalty program?” Loyalty programs are expanding, which is not surprising given that today’s highly competitive marketplace has made having one a no-brainer. Most, even the most ill-conceived, tend to produce small, single-digit gains which, at scale can add up to hundreds of millions of dollars. Of course, loyalty can mean different things to different people. To industry insiders, loyalty largely means how often consumers visit and how much they spend. But loyalty is also an emotional state, one that is earned (not bought), and based on real world experiences.

Loyalty programs need to evolve beyond pure economics. They need to begin to recognize the power of emotion in the equation.

For example, Moe’s Southwest Grill pushes a fairly standard buy-nine-get-one-free program. Meanwhile, Chipotle is one of the fastest growing and most valuable fast casual restaurants in the world - with no loyalty program whatsoever. Does that mean Chipotle is beyond loyalty? Absolutely not. But a punchcard won’t do much for them. A brand with real loyalty is going to want a more complex and nuanced loyalty program that can trigger more sophisticated and valuable behaviors. Every brand should want those things. In that spirit, here’s a list of four ways most traditional loyalty programs leave money and love on the table.

1. The program comes with a physical burden. The average consumer has thirteen loyalty cards. It’s impractical to carry that many, so loyalty programs lose. Even those who offer to look up accounts by phone number suffer from the path of least resistance (consumers decline). Luckily, many signs point to loyalty moving to mobile phones with NFC or specialized apps.That future can’t come soon enough.
2. The program is (mostly) an economic agreement. ”Ten punches and the next one is free.” “Five percent off future purchases.” “One point per dollar spent.” It all adds up to the same story: sign up and come back, and in return we’ll give you a small discount (in many cases so small it is eclipsed by existing coupons). While catnip to bargain hunters, our instincts tell us many consumers are engaging simply because it’s the economically rational thing to do (why not save a little money?). Loyalty programs need to evolve beyond pure economics. They need to begin to recognize the power of emotion in the equation. For instance, how many major loyalty programs allow the cashier to welcome the consumer by name? The strength of social reinforcement in games like FarmVille tells us this recognition is worth more than its weight in gold.
3. The program offers many rewards, but only one action. Imagine a game of chess made entirely of pawns moving one square at a time or Monopoly with nothing but passing Go. As a system designed to incentivize certain behaviors, loyalty programs are pretty one-dimensional. Yet, they all posses the basic building blocks of a more game-like experience. That means thinking carefully about expanding the actions available to the player. More actions means more decisions and more engagement as the player tries to maximize their upside (while also maximizing beneficial behaviors). In the absence of more ways to “play” a loyalty program, members may invent their own game on top of one (note the forums where frequent fliers share their relatively banal strategies for maximizing points).
4. The program has unintended consequences. Many airlines have moved to a model where checking bags costs money, unless you’re an elite flyer. The result? Hundreds of people trying to cram their bags into overhead bins that are routinely overloaded. This delays departures and costs airlines money. Turn this scenario on its head and you’d have overhead space reserved for loyalty members, and bonus loyalty points awarded to each cabin of people whose flight boards and deplanes faster than the airline average. Good loyalty design requires a lot of systems thinking, and keeping it simple doesn’t discount the complexity inherent in human systems.

What positive or negative trends have you seen in loyalty lately? What is your business doing to evolve its system to meet new consumer expectations? We’d love to hear from you.