Loyalty Lab Blog

by Joshua Tretakoff | EVP, Services

Consumer Goods companies are feeling the pinch of the tough economy; after all, their customers are less inclined than ever to spend money. But an excellent article in Promo this week calls out a prescription for how CPG’s can save money and defray the effects. Not surprisingly, Loyalty is the primary recommendation. Highlights:

•  Reward Your Loyal Customers not all customers are alike. Every brand needs new customers plus a loyal base of established customers. Identify and reward loyal users as an ongoing standard operating procedure.
• Encourage Repeat, Referral and Word-of-Mouth Marketing Listening and talking to your customers can be an invaluable asset in spreading goodwill and developing the “buzz” about your brand. Be proactive with customer service to engage and reward customers. You can turn them into brand ambassadors.
• Turn Your Web Site Into a “Go To” Destination With more consumers online and younger customers not consuming traditional newspapers and magazines, you need to make your Web site more fun and more valuable.
• 80/20 Rules Still Apply Eighty-percent of your business comes from the top 20% of heavy users. Focusing efforts and rewards against this heavy user group can reap huge rewards. Nurture these customers, listen to them and reward them—they are your VIP’S.

by Joshua Tretakoff | EVP, Services

Nine West has just launched their Loyalty Lab-powered program, Nine Loves, and you can sign up today.  Valid in any of the hundreds of Nine West stores, on NineWest.com, you earn 10 points for every dollar you spend on the shoes you love today. Plus, you get birthday gifts, possibilities for free shoes, and more!

We’re not usually ones to talk about our great clients here, but this one is irresistible. While we know the program is going to a big hit with the great Nine West customers, we look forward to seeing the new customers who join as a result!

by Joshua Tretakoff | EVP, Services

One of the latest trends with many retail loyalty programs is a shift of emphasis from a hard, points-based accumulation program, to one that emphasizes more exclusive access or “surprise & delight.” While Best Buy is certainly one of the most prevalent points programs out there, they have definitely stepped up the access benefits. For instance, they are now offering $100 off the purchase of an iPhone, exclusively for Premier Silver Reward Zone members.

When you think of how hot this phone is, and that unlike almost every other phone, there are no discounts allowed by Apple, this is a pretty serious perk for loyal customers. Other retailers should follow suite, with special discounts on specific hot products, or the ability to get to the front of the line (think Wii Fit). Augmenting or replacing your points based program with these exclusives is what keeps those customers coming back for more and more.

by Joshua Tretakoff | EVP, Services

Advertising Age Magazine has a good article today on the retailers who are thriving in the down economy. The common thread through most of their case studies is the presence and prevalence of a strong loyalty program. Salient clips from the article:

•  “[Kroger] offered gas discounts and free groceries in exchange for points earned through its loyalty-card program…data from its loyalty-card program are being used to send unique coupon offerings to specific households. “We understand and appreciate that no two customers are alike,” said David Dillon, Kroger’s chairman-CEO. “Some may live in the same city, some in the same neighborhood and even on the same street, but we know that they don’t have the same shopping habits. This level of personalization is a direct link to our customers [that] no other U.S. grocery retailer can replicate.”
• CVS: “Rob Price, the chain’s senior VP-marketing and advertising, pointed out that not all of the retailer’s programs are captured in measured-media data. Its massive ExtraCare loyalty program, for example, is not tracked. That program, which counts more than 50 million cardholders, has spawned more targeted marketing efforts, with promotional offers at the register, coupons, e-mail and direct mail.”

There’s also an anecdote about how certain companies who are definitely hurting the most, like Pottery Barn, are rolling out a loyalty program to try to turn the tide. Overall, yet more good reason for retailers to embrace loyalty.

by Joshua Tretakoff | EVP, Services

Brandweek reports a study that talks about one of the ancillary effects of having a loyalty program: word of mouth recommendations to others. According to the over 7,000 people interviewed for the study, people in the loyalty program were 70 percent more likely to actively recommend a product, service or brand than the general population.

In an economy where maximizing every dollar is key, being able to retain your best customers AND attract new ones through the same mechanism is increasingly becoming a no-brainer.

by Joshua Tretakoff | EVP, Services

The Dallas Morning News reports on the trend of sit-down restauarants to try to keep their longtime customers coming in by embracing coupon programs. However, buried in the article was this tidbit:

“Dallas-based TGI Friday’s occasionally uses coupons to bolster sales at a particular restaurant. The company’s main focus, however, is on offering discounts to members of its “Give Me More Stripes” customer loyalty program, a spokeswoman said. Members recently were e-mailed $5 off coupons for certain entrées.”

Nice to see that the nationals are realizing that the ROI for loyalty is far higher than coupons. I’m off to eat my green bean fries…

by Joshua Tretakoff | Founder; VP, Account Management

In the world of loyalty marketing, there are usually two business segments that lead the way in trying new things and seeing fascinating results: Travel and Grocery.  The latter reports today on the effect of a loyalty program on coupon redemption:

“Although the recession has revived penny-pinching, Americans are still redeeming only 1 percent to 3 percent of paper coupons. In contrast, the nation’s largest traditional grocery chain says as many as half the coupons it sends regular [targeted] customers do get used.”

Excellent use of targeted loyalty marketing to achieve a redemption rate that seems astronomical.

by Joshua Tretakoff | Founder; VP, Account Management

Santa, it’s time to get with the 21st century. See, word comes today that 130 million good little American boys and girls relied on a loyalty program this holiday season to guide their purchase decisions.  The highlights of this study, conducted by Ipsos Public Affairs/SoundBite Communications, and reported by Promo:

* 62% percent of respondents (almost 130 million Americans) planned to shop with particular retailers to take advantage of their loyalty programs, such as frequent shopper rewards, coupons or discounts.

* 23% planned to do all or most of their holiday shopping where they can take advantage of these programs.

* Loyalty programs are particularly powerful with parents with children under 18 and adults under 55.

The evidence is overwhelming: Holiday 2008 will go down as the best reason yet to have a strong, engaging, and cost-effective loyalty program in place. Otherwise, pack it in, and head to the elf breakroom.

Happy holidays, all!

by Joshua Tretakoff | Founder; VP, Account Management

An interesting twist on the traditional supermarket loyalty news today. Kroger, one of the largest supermarket chains in the US, and one of the most innovative on understanding its customers and what makes them loyal, has rolled out a suite of value-add services to their loyalty customers.

Kroger has always led the way in understanding complimentary services to their customers; they offer a co-branded credit card, for instance. This is even more interesting: in these challenging economic times, consumers tend to go with steady brands they trust. Seeing what some of the headlines are these days, it’s pretty easy to see why a consumer might consider Kroger, their trusted neighborhood grocer, for things like insurance and financial products.

Now, if only I earned free milk for new car insurance…

by David Rosen | Senior Vice President 

Another great idea from Open Table.  A lot of you are like me, either hopelessly addicted to web-centric business models or too lazy to pick up the phone and make a phone call.  Eeek.  Human contact.

OpenTable which has gobbled up nearly every relevant restaurant’s reservation book and put it on line, is currently promoting an offer for $35 fixed price dinners if booked online through their service.  To sweeten the offering even more, they are doubling the rewards points for these reservations as well.  (personally, I use OpenTable regularly due to it’s incredible efficiency and my high satisfaction, the rewards element doesn’t even factor into my behavior — but you didn’t hear that from me!)

Visa has been doing similar programs for years in major markets.  Effectively, restaurants band together to create an event during a traditionally slow week — in this case the week prior to Thanksgiving.  Goals:  fill empty seats, induce trial, and quite frankly get people spending some money.

Now go out and enjoy yourselves and stop fretting about your 401ks.