I saw a customer in my newsagency a couple of days ago pull out what looking like ten different loyalty cards, looking for their magazine club card for my shop. Their comment was along the lines of “I should get rid of them cause you never get anything.”
I succumbed to temptation and asked how they viewed our campaign against the others. “It’s great,” was the answer. The customer explained saying that our campaign told them how close they were to free product. It also offered more valuable rewards. Plus it was in a product category no one else catered for – magazines.
I talked to the customer for five minutes, listening to their complaints about the other loyalty cards and how she used them religiously without getting any benefits. She was highly critical of FlyBys for offering nothing.
Her reason for keeping the cards was habit. And that surprised me. Here you have a smart customer, using something to which she attaches little value, only because of habit. Great job Coles Myer on FlyBys.
But great job us too because this customer has altered their magazine buying as a result of our loyalty program.
I am thinking about loyalty programs today because more newsagents are embracing them – but in a me too type way. They are providing cash and other rewards based on purchases without sufficient strategy built into the campaign to get customers shopping more frequently and spending more. To my mind a loyalty campaign has to offer as close to instant gratification possible. It also has to differentiate from the likes of FlyBys and other traditional points campaigns. If you don’t differentiate then you get judged as if you are part of their game.
In the case of the simple (low tech) campaign I run in my shop, year on year we’re achieving excellent sales growth in our magazine category and several other categories. While we do reward some customer who shop with us regardless, we’re seeing significant incremental growth and that’s the name of the game.
I am yet to see numbers of a more traditional (points based) loyalty program in a newsagency which show similar incremental growth.
The conversation with this customer has encouraged me to work on a more structured gathering of customer feedback. I reckon there’s gold there if we can mine it appropriately.