Friday, December 13, 2013

Are the best things in life really free or are they crappy retail loyalty programs?

Oh, the season of shopping is upon us. Deals, offers, coupons and marketing tricks, oh my! A new report from Nielsen takes a look at what makes retail loyalty programs tick. And stick. Especially through the bitter holiday shopping season. What has people signing up for and coming back again and again for more? 

According to Nielsen's report called "Free and Easy Loyalty Program Benefits That Matter Most Globally," there are a few things that a retail loyalty program better get right if they want a program that has potential to "to be a successful strategy for increasing store traffic and inciting loyal patronage."

There are some differences depending on geography & demographics, but here is a quick list of what people respond positively to:

1. free shit
2. discounted shit
3. free shipping
4. good, no great, customer service
5. exclusive offers (These are savvy shoppers. They know when a store uses the same offer in direct mail, email, online, other...and that shit will piss them off. Be honest or fail.)

So is the goal really to increase store traffic and incite loyal patronage? Because that's a noble, not ideal, but noble goal. And also, I have participated in loyalty program strategy sessions where the end goal was never so simple. The end goal was always to guarantee that every single customer would buy more, buy more often and did I mention...buy. Wait a minute. Does that mean that there is a way to guarantee a purchase? Aside from Amazon's drones, of course. Who wouldn't buy ANY OLD KIND OF SHIT if you thought there was a chance a freaking drone would deliver it to you. I would call for a neighborhood backyard barbecue if I were to order a drone-delivery. And I would be a viking for it, too. 

But seriously, that's the question. What is the goal of the loyalty program? Is it to try and guarantee a purchase from someone who may otherwise not care to purchase or is it more? 

That may or may not have been a question that surfaced during one of these meetings; you know the meeting I am describing...the decision makers for the business, the creative agency people who need more billable hours and the analytics team who always recommends their interpretation of data as fact and all others as opinion. Of course, there is no real response to that ridiculous claim...of course you CAN NOT guarantee a sale, because you will always have to factor in the human factor. The one that was also, interesting enough, missing from the meeting.  

If the customer is not represented in a real way during the formation of a loyalty program strategy, they will remain that way. Missing. You may get caught with a deal or a free piece of shit, but you did nothing to "incite loyal patronage." Inciting loyal patronage comes from forming a bond that is intimate, real, lasting and mutually beneficial, just like in real life. If you can do that and also increase your card-carrying memberships, then good for you! And good for the card-holders, too.

But if it's not authentic, it won't last, no matter what your dev team promises or your metrics guru has calculated. But don't worry. That's not a threat, that's free advice. 

What do you think? What loyalty program do you subscribe to and why? 

For more information, be sure to check out Nielsen's date-rich report on loyal customers and their real cost/worth: http://www.nielsen.com/us/en/reports/2013/how-loyal-are-your-customers.html

Enjoy.