Report on consumer loyalty card programs in the United States

We are pleased to publish our industry report on consumer loyalty card programs in the United States of America.  This study includes assessment of the market size, trends, growth drivers, and what sponsors and administrators of consumer loyalty programs can do increase engagement.

Our analysis shows that while number of cards in circulation has more than doubled in just 8 years (financial institutions, drugstores, and department stores bombarded Americans with attractive offers increasing signups), nearly 60% of cards are never used.  Our understanding is that the focus on undue focus on increasing reach has resulted in poor service of high-value customers (the airline sector has already started to make amends when they noticed that they were upsetting their big spenders by democratizing the loyalty program).

We recommend that loyalty card issuers conduct a comprehensive analysis of their user base, identify the high-value users, understand their needs, and bend over backwards to serve them.  We conclude that dropping off the occasional users might actually be a better strategic option because it will free up resources to serve the rest.  We also believe that sponsors might consider launching paid loyalty programs on the line of Amazon Prime to appeal to big spenders and then spoil them with delightful service.

Report on American economy, demographics, and homebuilding sector

The emergence of Millennials as the largest first time buyers of homes and injection of foreign money into North American real estate are definitely transforming the homebuilding and construction sectors.  In order to fully appreciate the trends impacting home construction business, so that a long-term market strategy can be developed, we have published a report analyzing macroeconomic drivers, demographic shifts, and other changes in the United States.  Our conclusion is that despite some recent improvements in the business climate for builders, there is a lot of choppiness ahead, primarily because the business models are outdated.  It is very clear that continued reliance on pre-2008 business models is largely responsible for the predicaments of homebuilders, who are struggling despite rising demand for homes.

Trends impacting the homebuilding sector in the United States

As we have written in the past, there are some major changes in the American real estate market.  Obviously, it has to do with the distinct characteristics of the Millennial generation, the largest group of current and future first time home-buyers.  In the report below on the topic of trends and drivers impacting home construction in the United States, we have discussed a range of macro-economic, cultural, and demographic shifts that decision-makers in the housing and building products industry must take into consideration.

How to make changes in channel strategy?

This is one of the hardest things to accomplish because once you have put all the relationships and systems in place, it is not easy to try something different.  The most difficult change to accomplish is to bypass a channel participant.  This is even harder for a small or medium sized company because business is simply easier for companies with significant size.

I often run into situations when the management realizes that sticking with the current channel strategy is impeding growth.  However, upsetting their existing partners can be disastrous as well because they bring bulk of the revenue and can drop your product line.  One of the low-risk options to accomplish this is launching a new business altogether (the business scope can be adjusted based on the precise nature of the distribution chain).

I also like to think that business-people want to make decisions that are rational and profitable, so it is still possible to do what you want as long as it does not hurt your partners.  I recommend this approach when the incremental benefit is modest from a new channel network.  Once you explain the vision to your partners and if you can convince them that their business will not be harmed (or will gain to some extent), they are most likely to be supportive.

If the upside potential is huge, then, a business case can be made to even upset your current partners.  In fact, it might be justified to terminate some relationships deliberately or let them die on their own if the benefit is huge.

What is important, though, is to understand that such decisions should not be taken without conducting an analysis, particularly looking at various scenarios and how each might play out.  To accomplish that, I strongly recommend consulting help because we can often interview supply chain participants anonymously and assess the impact on relationships.  To execute an exercise of this kind, I typically recommend the following approach:

State of the Canadian economy and prospects for real estate business

As we discussed previously, the influx of foreign money is disrupting the dynamics of the real estate markets in both United States and Canada, and that is impacting how many Millennials can afford to buy their first home.  In addition, as good as it was that Canada largely avoided the 2008 financial meltdown, the decline in oil prices has brought its economy to a standstill.  The report below provides a snapshot of the Canadian economy and how it will impact the real estate market.

Impact of Foreign Real Estate Buyers on the North American market

There are several forces at work in transforming the real estate business in United States and Canada.  Obviously, the nature of the economic recovery since 2012, flat wages, underemployment of Millennials, limited inventory of single family homes available for sale, and modest household formation are factors in driving selling prices and rents of homes, what is also distorting the market is flood of foreign buyers, specifically from China.  This report from Xinvest Consultants provides a snapshot of the overseas real estate buyers, their rationale for doing so, and how can home-builders, marketers, real estate agents, and other businesses can exploit the opportunity.