At best, they're why not programs -- as in why not get the discount, or get thrown the occasional bone -- but my purchase behavior is far more dependent on convenience, selection, competitive pricing, service, and habit. Most of my buying routines would be the same had the rewards programs never been invented.This is a field in dire need of a strategic step two.Consider Dominick's, my local Safeway grocer. Using a "Fresh Values Card" trades minor discounts for the right to track my purchases (so they can use that data to make better stocking decisions, and proactively market to me).
This quid pro quo doesn't make me feel anything in particular toward the brand, other than somewhat exploited. Then come all of the cross-promotional deals: I can earn airline miles, contribute funds to a school, accrue money for college, and even get free gas. Again, there's nothing proprietary about any of these sales offers, and they're all dependent on me spending more at Dominick's. It's clear that they're also all but automatic, as various computer programs track and process my activity, and then spit out the required discount cards and codes. It makes me wonder about who is being loyal to whom?
I prove my loyalty by buying ever-more things, and Dominick's shows its loyalty to me by giving me a discount, whether in the form of a price cut or cross-sales offer? That's not loyalty, it's commerce, plain and simple. I earned the discounts. There's absolutely nothing wrong with it, but it doesn't build or sustain anything. Dress it up with any permutation of technology platforms and third-party deals, and it's still sales promotional activity.
I'd imagine that the next step in loyalty/rewards strategy would be to find ways for company and consumer to do things that affirm and grow true loyalty. To that end, I have three ideas to consider:First, citizenship. Why doesn't my grocery store host local improvement projects in our community? Skip cutting deals with BP, and make one with the grade school down the street that needs new band uniforms. Not everybody would buy into the deal, but those that did would feel a helluva lot more toward the store than gratitude for a slight price break.
Why not make a restaurant frequent eater card contribute to the local food bank? Second, consistency over time. Don't focus on size of basket or aggregate volume of purchases, but consider regularity of those transactions. Isn't a shopper who visits with some periodicity (a weekly visit, for instance) probably far more "loyal" than somebody who uses his card 3 times a year? There should be recognition of that former behavior, incentivizing the routine of visits -- tell me the cabbage I love is on sale for the day I'm likely to visit, or update me that books by my favorite author just went on sale -- instead of simply rewarding aggregate purchases. The benefits could accrue to the shopper, or to the community (see prior idea). Third, why not let consumers participate in the store?
Ultimately, the value of social media isn't going to be for ad placement or the swapping of inane lifestyle tidbits; rather, it lets the purchaser take part in the production process (and, in doing so, both improve it, as well as make it feel more personable and ownable...i.e. feel loyalty). Ask consumers to help with issues of food assortment, menu listings, operational questions, whatever. Then reward their participation. I have a feeling that the second step in rewards and loyalty strategy will not be based on buying, but on all of the behaviors that come before and after it. Selling will be a natural and regular outcome, not the key input to the equation. Not to get too esoteric on you, but the equation will get flipped: companies will do things that prove their loyalty to consumers, and then consumers will reward that behavior with purchases.
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