Perceived Value and Cross Marketing
by Joshua Tretakoff | VP, Account Management
Rightly or wrongly, many people think of two things when they hear the term “loyalty program:” frequent flyer programs and grocery cards. The latter are fascinating: the value proposition is that you will get lower prices when you use the cards at the cash register. The cards themselves are free, of course, so what it amounts to is usually a modern version of traditional couponing: offer lower prices, and the customer will shop with you. Problem is, there’s no ongoing earn component to most grocery programs, and every grocery chain has one…so what’s the “loyalty” component?
Safeway, out here in the West, has recognized this problem, and added a new benefit to their Club program: spend $40 in groceries with your Club card, get 2 free movie tickets. Why movie tickets? Like gas, movie tickets are one of those ethereal commodities that has a higher perceived value to the consumer than the actual cash it represents, so it truly “feels” like a larger reward. Already, they’ve previously tied Club membership to earning gas at stores with attached fueling stations, so this lower-cost, higher value approach fills out their Club offerings.
This is complimentary marketing 101. I would not be surprised to see the nascent theater loyalty programs, like AMC’s MovieWatcher program, monitor the redemption of these certificates and possibly eventually reciprocate with gas from Safeway, etc. And with the ongoing competition of traditional movie theaters against home theaters and videogames, this could just be the start.
