Tag Archive for Customer Loyalty

Do Our Customers Value Our Current Loyalty Programs as Much as We Do?

Loyalty Programs – Walk in Your Customer’s Shoes

Pre-posted with Permission by author, Jack Kennamer

March 2014

When it comes to loyalty programs, we know what we love and what we’d change if we could.  We love the deals, offers, and rewards. What we hate is being aked for personal information, filling out registration forms, having to go to websites and create yet another account.Juggling shopper

We know what it feels like giving a complete stranger our e-mail, phone number, address and more; or being asked to recite this sensitive information in front of a line of complete strangers. All of this hassle just to receive yet another loyalty card to add to our ever-growing stack or adding another mobile app we’ll probably never use more than once. We have all been there, and most the time we just say “no thanks”.

If, by some chance we do sign up, we are then faced with the aftermath of joining…e-mails, tons of them, day and night with no rhyme or reason.

For those of us in the retail business, as soon as we leave work we become a customer with the merchants we shop.  We all deal with these exact same issues day in and day out. I don’t think we’d find a consumer out there that loves the current “linear” loyalty system of today.  Just Ask. So, why not make it as easy as possible for consumers to enroll and participate?

What if we, as consumers could go into any merchant offering a loyalty program and enroll with the swipe of a single card, or the scan of a single app?  Just one! Not a deck of loyalty cards or a smartphone full of apps. Would that make us more likely to participate? No forms, no personal questions, no websites to hunt for to enroll in, just a single swipe! Of course it would!

And what if we, as a consumer, knew that our personal information was safe and secure, wouldn’t that make it easier and safer and less of a concern to join a merchant’s loyalty program?  We all know the answer – it is an emphatic YES!

What if we knew that our e-mail box was not going to explode when we joined and offers would come to us in way that makes them useable and specific to who we are? Would that make it easier to join?  Of course it would!

Operation “Wallet Recovery”

I’ve heard it said many times by more than one supermarket retailer that they believe they have a very loyal shopper following.  Many of these same retailers are shocked when they discover that they are only supplying about half of these shopper’s grocery needs.  In fact, I have tracked the “wallet share” of several retailers with strong “loyalty” programs  only to watch a precipitous drop in their share of shopper requirements over the past five years, especially among their very best shoppers.

Yes, despite the best efforts of some very good retailers, they are losing their grip on their best shoppers. Certainly some this attrition is unavoidable.  New competitors  from other retailer channels are taking a bite out of the supermarket pie.  On-line retailers, Amazon for sure, are now selling shelf stable center store products on-line to a growing audience.  Big boxes and specialty retailers are taking significant share on both the “price” and the “fresh” pieces of the business.  Finally, with the lingering recessionary environment, shoppers have drastically expanded their “consideration set” for all their sources of grocery items as they have adapted a renewed “cost-containment” mentality.

Yet, growing the business for many supermarket chains is still possible, all the bleak aforementioned realities withstanding.  However, to be successful at winning back lost shopper share requires a plan that should include the following steps;

  • The first step in operation “wallet recovery” is understanding where the leaks are occurring and how big they actually are.  Both primary and secondary research will be needed in this step, but basic stuff, nothing terribly sophisticated needed to create this learning.
  • The second step is developing a strategy to recover this lost business, given the limited resources you have to do so.  This means not chasing every shopper, every dollar in every category.  It requires customer data, analysis and actionable strategies.
  •  Thirdly, the retailer must understand that winning back their shoppers share of wallet is an ongoing, never-ending process that must optimize limited resources and involve merchandising, marketing, merchandising and even human resources.  Consequently, great focus and commitment is required.

Customer loyalty is not dead, but it has changed.  It more elusive and less sustainable.  Successful loyalty marketing now requires new strategies and a focused, committed approach.  More to come on this topic.