by Joshua Tretakoff | EVP, Services
Retailers are often loathe to make significant changes to their loyalty programs for fear of customer backlash. However, with recessionary times and the tough retail climate, more and more retailers are taking advantage of the opportunity to introduce changes. The Wall Street Journal’s SmartMoney has a good breakdown of some, and what the changes will mean. Worth a read.
by Joshua Tretakoff | EVP, Services
It always intrigues me what some folks consider will motivate customers to remain loyalty to their brands. In many cases, it depends on a combination of the brand’s value proposition, the kind of customer they attract, and the uniqueness of their offering. Yet some of the programs brands launch make me scratch my head as to why they consider them “loyalty” programs, vs. traditional acquisition marketing techniques.
Take, for example, the Tallahassee Airport. Like many regional airports, its in tough competition with other local and large airports for those tough to find traveler dollars. Recognizing this, they launched Runway Rewards, a fairly unique concept that rewards flyers for choosing Tallahassee for their travel. Now, remember, this is a program that is ostensibly designed to retain travelers. Yet the mechanism they choose to do this? A monthly sweepstakes entry. Not a “the more you visit the airport, the more you earn,” nor a “spend a certain amount at Tallahassee Airport and get a day of free parking.” No, instead a sweepstakes that awards 6 people a month. So, for those lucky 72 people a year, they will truly be loyal. The other thousands of travelers? Not so much.
Sometimes, people get caught up in the technology vs. the goal, and confuse one for the other. As a former New Englander, I love living in CA, but often miss summer East Coast seafood. Luckily, there are a few restaurants competing for my nostalgic dollars who specialize in such. One, called Yankee Pier in Larkspur, CA, recently used their Twitter account to unveil a “Guest Rewards” program, which you sent a text message to a special number to sign up. What were you signing up for? Special coupons and advanced notice of nightly specials. While I appreciate the information, how is this a “Guest Rewards” program? Are you rewarding me for dining often with you (I try to at least once a month)? Are you giving me, as a loyal customer, special access to dishes the regular public cannot have?
Look, I love using Twitter and SMS to communciate with customers wherever they may be, and mobile is a great platform for local content, but this is not rewarding me; it’s just discounting. That’s acquisition, not retention. For 1/3 the cost, you could set up a great program that tracks how often I dine or how much I spend, and offer me benefits like Chef’s Dinner nights, or member-only bottles of wine from the wine list. Make me a VIP, and I’ll spend more with you, more often.
Rewards Programs are the #1 tool to combat tough times in a recession; don’t disappoint your customers by repackaging sweepstakes and coupons and calling them a loyalty program. Think of your customer, and what they want from you. If you don’t know, ask them! Trust us, they will be more than happy to tell you what they like and don’t like…and you win as a result.
by Joshua Tretakoff | EVP, Services
When you say the term “loyalty program,” most people think of one thing: frequent flyer programs. In comparison to, say, a retailer’s loyalty program, most people think that’s another type that’s much smaller. Yet word comes today of a surprise: Retailers are now the top loyalty marketers, according to DIRECT magazine.
How big is the divide? According to the study quoted:
“…across-the-board retail loyalty program memberships now number 701 million, representing 39% of the U.S. loyalty market. That compares to 556 million in travel-hospitality, which includes airline, hotel, gambling, car rental and cruise programs, representing 31% of the market, and financial services credit card programs at 422 million for 23% of the market.”
In these challenging economic times, there’s clearly an upward trend here, and Loyalty Lab is proud to work with the lion’s share of retailers, including Sears, Kmart, Nike, Nine West and more. Of course, since we also provide services for travel-hospitality (Virgin America) and financial services (HSBC), we seem to have a well-rounded sampling, and we learn from all of them, and they learn from us. Nice to see a fresh segment atop the loyalty pyramid!
by Joshua Tretakoff | EVP, Services
A controversial post out of Harvard Business today, as the authors ask the question if customer loyalty can be a bad thing. While the statement, on it’s surface, is outlandish, the authors make a well reasoned case that it’s equally as important that you set up the economics of a loyalty program to reward the best customers who’s behavior you want to encourage, while not making the program reward those that are perhaps less profitable customers or worse, encouraging profitable customers to become less so.
Thought provoking, and worth a read.
by Joshua Tretakoff | EVP, Services
When we founded Loyalty Lab years ago, we made a few basic assumptions about the customers that would use our software:
This last one occasionally gets challenged. In many of our clients, less than 1% of the customers share an e-mail address , usually with a spouse or other family member. When anyone raises a concern about one “member” of the e-mail address being able to see loyalty information on another “member,” we usually point out that they already see sensitive e-mail communications, and that there are a plethora of free e-mail address options that they can get their own.
This week, AMC, the large movie theater chain, has decided to echo this same behavior in their MovieWatcher rewards program. They informed the members of the program via an e-mail, which is the most efficient way to communicate e-mail address policy changes. It is interesting that this change was important enough to communicate to their customers clearly; I wonder if this was a policy change or a software one?
In any case, it’s a change for the best for all involved.
by Joshua Tretakoff | EVP, Services
Continuing the trend of manufacturers realizing just how important Moms are in determining household purchase decisions, Huggies introduces us to Enjoy The Ride Rewards. Not just a simple points program, it also offers the added benefit of built-in sweepstakes entries to win a year of diapers, on top of the traditional “earn and burn” of most of these programs. The creative is bright and colorful, and looks to be a good program that clients can easily use as a template.
by Joshua Tretakoff | EVP, Services
A lot of clients we’ve worked with focus on rewarding customer shopping behavior. Some are starting to go outside that, broadening the appeal of their programs to award customers for reviews and social networking. H-E-B, a San Antonio-based market chain, decided to increase the appeal of its program by focusing on some issues that are important to its customer: reducing traffic and waste.
Starting tomorrow, Houston residents who sign up with H-E-B for the Commuter Challenge will be able to earn $5 off every $50 in groceries when they earn points by “taking cars off the road.” They’ve teamed up with a third-party company, NuRide, to track the points earnings, and will be encouraging all shoppers to earn jointly towards the goal of “conserving” 15 million miles.
A revision to a loyalty strategy that involves tangible earnings, core customer values, and a joint participation goal? Sounds like a winner to me.
by Mickey Neuberger | VP Loyalty Strategy
Local Mini dealer develops interesting loyalty/retention program based on key insight that car owners defect from dealer servicing when their cars reach a certain age, especially when price is cheaper by 30-50% somewhere else. The solution: a 100k mile club that provides incentives to stay via discounts and badge recognition.
By Mark H. Goldstein | Chairman
I’d always liked these guys and we were going to build a program with competitor Backcountry 2 years back until they back-treaded a bit…..but take a close look at Moosejaw…this is a powerful programs…simple benefits, but what i like most….look how easy they allow you to use points OR $$$ to buy…this is the new world order and what consumers expect and demand..other than 50% off everyday 
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!
