What about me?
That’s the question being asked by a large group of loyalty customers. Many of the most brand loyal customers are infrequently or never recognized.
Maybe it’s because they don’t “spend enough”. Or maybe it’s because they don’t purchase within the brand’s walls. But, that doesn’t mean they aren’t loyal or the most loyal to the brand.
The Problem with Current Loyalty Programs
Current loyalty programs only recognize those who spend the most dollars by giving them special perks (not just miles that everyone gets). But what about that person who only spends their lesser available dollars with only that brand?
Let’s look at two customers:
Customer A shops only with apparel company X. This person shops 8 times a year for new business and casual clothing. This means on average, the spend is about $1,000 per year on clothing expense. That’s one hundred percent of Customer A’s available dollars.
Customer B shops with multiple retailers. This person shops 20 times a year and spends about $4,000. This customer only shops 12 times with Company X because they want a variety in styles. This means the average spend is about $2,000 on clothing expense with Company A. That’s only fifty percent of Customer B’s available dollars.
By today’s loyalty program standards, you would only reward Customer B.
After all, that customer spent the most with Company X. They met the Gold threshold and you’re trying to chase the rest of their wallet (the other fifty percent).
Customer A is not rewarded with any extra perks and benefits and Company X is still trying to chase their wallet, but there is nothing else there.
But, who is the more loyal customer?
Recognize All Your Loyalty Customers
To create loyalty, you need to capture and reward/recognize for all the interactions with the brand, not just the primary or direct sale. Today, when I walk into a brand’s store or purchase online, I am rewarded for that purchase (if I sign in).
Great.
But what if I decide to purchase a brand’s product through another outlet. I am still being loyal to the brand?
I say yes.
This past Saturday I was doing my “loop”. That is shopping at 8 stores before 11 AM. Every week that usually includes a trip to Costco.
This past weekend I saw that there was a pair of shoes from one of my favorite brands. I needed new black dress shoes, and these would be the perfect replacement and at a great price, so I bought them.
Will the brand ever recognize that I made that purchase?
Not by today’s loyalty standards and that’s unfortunate. It was not the look of the shoe that caught my attention. It was seeing the brand name. I know it means comfort and the right fit for my foot. But why am I not recognized?
Just because I bought the product through a wholesale relationship and not direct? Because it may have been a less profitable purchase?
Brands and their loyalty programs need to recognize all their consumers’ behavior. Find out who is shopping because of loyalty and who shops because of convenience. Be aware of all consumer interactions.
After all, isn’t loyalty about the journey and not just a single event?
Tom Baker
Tom Baker has been Vice President of Strategic Partnerships, at Clarus Commerce since late 2015. He has been partnering with retailers for the last 18 years delivering innovative solutions to impact companies' bottom lines. As part of this process, Tom has spent thousands of hours in retail locations and call centers listening, learning and providing advice on how to maximize every customer touch point. He has worked for leading brands creating new consumer engagement strategies, products & services and revenue generation for such companies as Dun & Bradstreet, Oxford Health, GE & Time Inc. His specific areas of focus have been in business development, brand management, direct & digital marketing, new product development and client services. Tom enjoys volleyball and watching his daughters dance. He's a passionate, lifelong fan of the NY Yankees, Giants & St. John's.