You found it, the exact item you were looking for. You did the Google search, found the website for the company that sells that item and you go to their website. You place your order and provide your credit card information and then comes that little harmless question: What is your email address so we may send you a confirmation of the order? They say they will never sell your address to anyone else so you give it to them. Then what?
Many of us have experienced buying an item online from a retail store to then be bombarded with every kind of email and direct mail offering that the company can come up with. This happens to me even if the product I purchased has no relation with the offers that land in my inbox daily. Annoying, isn’t it?
This is probably not going to gain me any friends, but I whole heartedly support this method of marketing, which is called Loyalty Programs, because if done correctly, they can be very successful. The problem is, that so few companies go the extra step to insure success.
Loyalty programs go back a long ways, I can honestly say I remember S&H Green stamps, given out by the local grocery store based on how much was spent. My Mom would paste them into books that were used to redeem them.
Times have changed and Loyalty programs have gotten a lot more sophisticated through special on-line incentives, free shipping, discounts for referrals, etc. But, have they necessarily gotten more successful? Do they provide the return on investment to the marketer?
According to research by InfoPrint Solutions Company, a joint venture between IBM and Ricoh, the answer is a dismal no. I recommend you read the entire article at The CMO Council website but I’ll try to summarize here.
From the consumers’ viewpoint, the study indicated that a “surprising 79 percent of consumers surveyed say they are very, or pretty, satisfied with their loyalty and rewards program experiences. But 70 percent want to see more discounts and savings, and 52 percent more compelling personal deals and offers as reward for steering their business to loyalty program operators. In a definitive call for personalization, 58 percent say they want more compelling personal benefits and services, as well as more relevant offers or individualized deals.”
What’s interesting is that it appears that the wealth of information that is gathered by marketers about consumer behaviors, wants and desires is either being ignored or not being coalesced to provide more relevant offers. Why in the world if I order a straw hat from Bass Pro would they assume that I would want to see offers for guns, bows and arrows and camouflage clothing?
Something else that was interesting, it seems the state of the economy has very little influence on loyalty club participation so even as we move down the road toward recovery, these programs will still have an impact on buyer behavior.
With the average household enrolled in 14.1 loyalty programs but only active in 6.2 of them, doesn’t it make sense to be making offers that stimulate action?
If you’re thinking about a loyalty or referral program, make sure you understand how often your customer wants to hear from you, in what form they want to hear from you and what it is that will drive them to buy.
I’d love to know your thoughts.