Loyalty Marketing
Using Point-of-Sale to Improve Profitability
Here’s a story from Marketer David Frey in the US. The lessons are clear.
Not long ago I made a trip over to the local Radio Shack to purchase an electronic plug for my cassette recorder. 
As I paid for my item the retail clerk asked me for my name, address, cellphone number, birth date, and even my email address (something every retailer should be asking for today!).
Birthdays Bring in the Customers
Marketing people like to be creative. Some will not openly admit that they loathe data because it’s just not fun to look at spreadsheets, graphs, and charts compared to designing something.
However, creatively using data about customers can contribute to the customer’s experience in so many ways.
That doesn’t mean a birthday card should be sent to every customer because data shows that below-average customers know the sentiment is hollow
For example, there’s nothing easier than sending a birthday card to your best customers. That doesn’t mean a birthday card should be sent to every customer because data shows that below-average customers know the sentiment is hollow; they know they don’t shop enough to warrant a birthday card. In addition, below-average customers spend too little anyway and the result is a negative ROI.
But when you send a creative, relevant, personalized birthday card with a gift that has no catch to a good customer, it pays dividends in relationship building that goes beyond that day’s transaction.
Data from a major retailer in the US showed that their best customers (i.e. top 30%), when they redeemed their birthday gifts, spent even more. They purchased things they normally wouldn’t as a treat for themselves and they bought more than usual in gratitude. They walked the store, discovered new merchandise and ‘connected’ more.
Real-world Case Studies
UK supermarket giant Sainsburys talked to each of its 4.5 million ‘Nector Card’ customers with an image personalized postcard mailer right on their birthday. Printed digitally with a volume of about 400,000 pieces each month.
Small Retail Loyalty – Case Study
Most businesses lose between 15 and 20 percent of their customers every year.
Most businesses lose between 15 and 20 percent of their customers each year. Retailers lose even higher percentages. From those loyal customers who remain, however, the profits can be significant. The acquisition costs of new customers, particularly for a small retail store, can be very high. Who pays these high costs? It is not the casual transaction buyers – here today, and gone tomorrow. They rarely pay for even the cost of their own acquisition.
No More Plastic Loyalty Cards
There are a number of technological aspects that will develop over the next few years, some of which are behind-the-scenes technologies that consumers aren’t aware of, and some of which will directly affect and interface with the consumer. Because new technology is usually an enabling factor for commerce and innovation, any new technologies that come along must be examined from every angle: in essence, marketers need to look at each technology to find the problems that each new technology can solve.
What’s in a Name?
Seeing your own name included in direct mail piece is commonplace (and been possible since 1972 when the first digital printer was connected to an IBM mainframe). Software simply extracts your name from a database and places it on the digitally printed document. We see it weekly in our bills, statements and company letters.
Restaurant Rewards
Here’s an interesting concept from the US – One we’re sure could work here in New Zealand. All it needs is a simple way to build up your list of recipients through our own personalised direct mailers, smart email and purl marketing toolsets.
Starbucks – It’s the Experience, stupid
In the consumer marketplace, Starbucks has become a household name. Marketing gurus have held them up as a fine case study for many years. Seth Godin once commented on their cunning marketing plan. “I’ll meet you at Starbucks” – This was the catch cry of millions of Mums and business people wanting to get together to chill out or to talk. Starbucks was simply marketed as a comfortable meeting place with couches. Serving coffee was just a [highly profitable] spinoff activity.
Double Your Rewards
Nearly everybody is in one or more loyalty programmes these days, basically to get those discounts, rewards or airpoints.
These reward programmes have to be done right. In an excellent article by Geoffrey De Weaver "… consumers do not mind sharing information with retailers as long as they receive worthwhile, personalised benefits… 54% of Australian consumers have at least one reward or loyalty card, and 69% tried to use a loyalty card as often as possible. Importantly, both figures are trending north… 
Never lose sight of the top 20% of your customers who generate the majority of your sales and profits…"
All advice and opinions here are offered freely on a no-liability basis.
