Thursday, October 10, 2013

Can You Really Buy Loyalty?

How many of those loyalty scan cards do you have on your keychain? Your grocery store? Your pharmacy? Your office supply store?

Are you going in regularly with those coupons they mail you? Does it make a difference where you shop and how much you buy? For some customers, yes it does. The Transactional Customer loves those cards and takes full advantage of them. But not everyone does.

According to one survey, only about 65% of Americans actually use those loyalty program cards and coupons.

I question how many of those people would still be "loyal" to that store without the program. I know that the two cards I use are at places where I would shop anyway, whether I had the card or not. One of them, I actually hate shopping there. I only go because they have a product I can't get anywhere else, not because of any loyalty card.

More importantly, the top reasons people say they would switch their "loyalty" to another store is because of indifferent sales help and the other store being perceived as more fun. Price and loyalty programs are far down the list.

So how much "loyalty" are you really buying? First consider that 35% of the population doesn't care about loyalty programs. Then consider what percentage of those people using your program are actually spending more at your store than they might otherwise just because of the program. Is it more than what the program costs? I saw one program that promised if I gave away 10% discounts in my loyalty program I would see a 5% increase in sales. Not my kind of math. Then consider how quickly customers might leave your store, loyalty program and all, because of perceived indifference by your staff.

Would you really like to buy some loyalty? Spend your money on training a kick-ass staff. Spend your money making your store a more fun place to shop. Spend your money on delighting the 35% (or more) who could care less about discount cards and coupons.

That's a loyalty program worth having.

-Phil Wrzesinski
www.PhilsForum.com

PS And it won't be a burden on anyone's keychain.

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