Tag Archive for 'customer loyalty'

Meet Your Customers Via Loyalty

Published on December 27, 2010 in Roger Brooks. 0 Comments Tags: , , , .

Every day, operators like you are contemplating the pros and cons of introducing a customer loyalty program. Customer loyalty programs have been the buzz of the industry for the past several years, and those of you without a program probably continue to ask the same questions as your peers and your competitors: Are we too small? Are we too big? Is there a program out there for me? The high-level answer is this: Loyalty programs can work no matter your size, but there are several questions you should ask yourself before you decide on going all in.

Do you really know your customers? Before you go through the meticulous exercise of performing due due diligence, examine your objective for wanting a customer loyalty program. Typically, the reason companies initiate a customer loyalty program is to have the tools and means to identify, motivate and reward their customers. You may think you know your customers, but I would challenge that you don’t. If you’re lucky, you many know the names of some of your customers, but you don’t know their address, cell phone number, e-mail address or their Twitter name. You definitely don’t know how often they shop your store, what they buy and their average transaction size. You also don’t know what’s in their shopping cart and if they only buy fuel.

How can you really know your customers and properly market to them if you don’t understand what they’re buying? How well do you really know your customers if you can’t contact of communicate with them? Loyalty programs provide you with the knowledge and intelligence needed to truly understand your customers’ spending habits. In time, you can segment your customers, market to them and aim to change their purchasing behavior while loyalty transactions become more profitable transactions for your business.

Start With the Basics

If you think you’ll like the benefits of what a loyalty program can deliver, see how you’ll fare after evaluation these seven loyalty qualifiers:

L: Look at your physical location(s) to ensure you are positioned for success.

O: Open your Rolodex of vendors/suppliers. Contact them to see if they’ll support your initiative.

Y: Yes, total company buy-in is a must. Obtain buy-in from the CEO down.

A: Align yourself with a loyalty provider that will support your goals and initiatives.

L: Leverage the relationship with your point-of-sale manufacturer, and ask what loyalty solutions are available through your existing hardware.

T: Take the necessary time to plan for employee training. Proper training will lead to success.

Y: Yesterday’s marketing methods are obsolete for loyalty programs. A new marketing mindset is vital to the success of your loyalty program.

The beauty of initiating a loyalty program is that you can design it based on your budget and business objectives. Basic loyalty programs include an electronic version of the “punch card,” and elaborate programs permit  customers to accumulate points for every purchase made. Once the customer reaches a threshold of points, various redemption options become available. Many companies often start out with the basic functionality and increase program benefits over time.

So why provide incentives or rewards to begin with? The reason is simple: to gain additional market share through repeat business. If the consumer knows that each purchase made gets him closer to a reward, he will think twice about patronizing your competitor.

About the Author

guest blogger for phenomena

Roger Brooks - loyalty expert and author of 'The Power of Loyalty'

Roger L. Brooks is a loyalty strategist and American author whose areas of expertise include customer loyalty and rewards programs. He has worked with such companies as GE Capital, Sam’s Club, Chase Universal MasterCard and Bell Atlantic (now Verizon) and currently serves as Vice President of Loyalty Marketing for ValueCentric Marketing Group, Inc (VCMG). Roger is a contributing author to a variety of industry trade magazines including Loyalty Management, NACS Magazine, Convenience Store News, Entrepreneur Magazine, and CSP Magazine, and is also the publisher of a weekly newsletter, Everywhere Loyalty, which counts over 10,000 business executives amongst its readers.


The Relentless Battle for Collaboration and Understanding Shoppers and Retailers

Published on February 22, 2010 in Uncategorized. 2 Comments Tags: , , , , , , , , , , , , , , , , , , , , , , , , .

Ongoing competition between retailers’ private label product and brand manufacturers has been portrayed as a “winner take all” battle for control of the shelf. However, a collaborative approach with shared shopper, goal alignment and a renewed focus on relevance is more likely to produce success.  This blog looks at why that is so, and what brand manufacturers can do about this.

The globalization of retailers and brand manufacturers, the rise of value merchants and the recent economic downturn have all contributed to the emergence of new issues. Faced with more choice than ever, shoppers are overwhelmed  and are looking for ways to simplify their shopping. Retailers and brand manufacturers are trying to address economic inefficiencies that have resulted from unbridled growth of assortments and product portfolios. Range rationalization, delisting of products, product portfolio rationalizations, and evolving new product development processes are the result.  To understand these trends and how to survive, we look at the shopper and the retailer.

Shopper

The recent recession served as a catalyst for shoppers to re-evaluate the way they consume and shop. Shoppers have reassessed and re-prioritized their needs, become more planful in their shopping and have altered shopping habits — consolidating shopping trips, shifting to value merchants and turning to more store brand solutions — to cope.  The recession has forced consumers/shoppers to examine and change their behaviors in a way that no amount of marketing could have.

The nature of loyalty and ways in which shoppers bestow their loyalty today have changed. Product proliferation has made it more difficult for consumers to assess the differences among them. Shoppers are looking for help, looking for choice editors or advocates. With shoppers making in the range of 150 shopping trips a year, retailers are perfectly poised for such a role. Shoppers have come to rely on and trust retailers as shopper advocates, while branded manufacturers have become somewhat dis-intermediated from shoppers. Retailers are taking on the role of brand intermediaries.

Retailers

Much of retailers’ behavior can be understood by knowing that they are concerned with two key goals—efficiency in the short-term and the long-term profitability of loyal shoppers.

Efficiency— Efficiency is a problem shared by retailers and branded manufacturers. Retailers have begun to reduce the number of SKUs and prioritize categories in their stores. Despite a proliferation of products, there has been no accompanying increase in sales. By reducing the number of SKUs in their stores they have not seen a reduction in sales.

Shopper loyalty—By offering exclusive private label products with value and relevance to different shopper segments, retailers are better able to retain shoppers. Retailers have realized that they cannot rely on branded products alone to draw shoppers to the store and sustain shopper loyalty. Private Label  products provide exclusivity and unique relevance to shopper segments (e.g., Tesco, Walmart and Carrefour). Private Label helps retailers prevent trade-down to value retailers and serves unique needs of their shopper segments, contributing to their perception as “shopper advocate.”

In the next article the author will speak about understanding the point of view of the Brand Manufacturers and what can be done from the Manufacturers on how to collaborate and co-create shopper marketing solutions.

About The Author

Jim Lucas - Guest Blogger for Phenomena

Jim Lucas - Guest Blogger for Phenomena

Jim Lucas is a director of shopper marketing at Draftfcb, Jim helps retailers, manufacturers, and service providers to motivate shoppers through value-added experiences. The acknowledged founder of the science of retail ecology, he is internationally recognized as an experienced marketer and leading retail expert.

During his more than 20 years in the marketing industry, he has served as director of strategic planning and research at Draft Chicago, director of planning and research at Frankel in Chicago, and director of analytics and modeling at Krumm & Associates LLC. His clients have included, among others, Burger King, Frito-Lay, Kellogg, Kmart, Kroger, McDonald’s, Mervyns, Procter & Gamble, Quaker Oats, Sears, Target, USPS, and Walgreens.

Jim Lucas

Director of shopper marketing at Draftfcb.

Jim.Lucas@draftfcb.com
http://www.draftfcb.com

New Year and New Thoughts for Shopper Marketers

Published on January 14, 2010 in Uncategorized. 0 Comments Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , .

In the spirit of the new year, I offer up the following resolutions to keep in mind for a successful 2010:

  • Invest in today and tomorrow will take care of itself.  Now is not the time to extinguish your advertising, promotion, research, and innovation budgets; now is the time to wisely use your budgets to better understand your consumers so your offering remains meaningful in the present and the future.
  • Go-to-market together.  As marketing budgets must be maximized in the new year, marketers should consider partnering with complementary brands (for example:  Heinz ketchup and French’s mustard) to share in research costs, advertising dollars, in-store displays, etc.  Knowing how your consumers shop (e.g. what else they buy and/or use with your brand) will help you identify appropriate brands to consider approaching for collaboration and coordination of your precious marketing budgets, calendars, and initiatives.
  • Aim for customer monogamy, not just customer loyalty.  Loyalty means that your customer is shopping in your store, your category, or your brand most of the time – and probably your competitors on a less frequent basis.  If you truly want to maintain and grow your heavy user base, aim to deliver on all of their needs so your customer has no reason to be tempted to switch.
  • Make customers feel good about shopping.  Right now, shopping (except for everyday necessities) feels wrong, foolish, and indulgent when news headlines continue to communicate economic woes.  Appeal to your customers’ emotions that they are doing the “right thing” with their savvy purchases.
  • Understand that “value” means more than “cheap/low prices.”  Consumers are savvier than ever and want the best value for the time, money, and effort they spend shopping and using the resulting goods.   Reward their efforts by making it easy for them to shop your store, your category, and your brand.
  • Walk in your customers’ shoes (or boots).  You rely on research to ground yourself in the facts about your customers – the demographics, psychographics, purchase behavior, purchase interest, brand preference, etc. that lead you to the insights used for strategic decisions.   However, you need to also look up from the numbers once in a while and  look at the people behind the numbers.  Observe how your customer lives – walk around their neighborhood, watch them deal with traffic headaches,  note their mood when they walk into their office (vs. when they leave their office), shop in their stores, and eavesdrop on their in-store purchase decisions.  Remember that your target more than likely lives a life that is different than your own and that he/she will make choices different than you will.   Respect their footsteps and their path in life.
AnnaMaria M. Turano - Phenomena.com Guest Blogger

AnnaMaria M. Turano - Phenomena.com Guest Blogger

  • Remember that shopping isn’t just an in-store or online activity.   In some way, consumers never stop “shopping” – they are always recognizing new problems or dealing with recurring problems and looking for solutions.  Sometimes, consumers are merely asking friends for quick advice; other times, they are going online or to a store to look for an actual solution.  At its essence, a marketer’s role is to be a problem solver.  Identify when your customers start to think about the problem that you solve and remember the rule of “rights” – right product, right placement, right message, right timing, and right price.

About The Author

AnnaMaria M Turano is an executive director of MCAworks. She leads client engagements involving corporate and product brand strategy, customer value proposition development and new product development. She is the co-author of Stopwatch Marketing. MCAworks is a management consulting firm based in Westport, CT, USA, which is dedicated to helping clients accelerate and sustain business growth via action-oriented sales and marketing strategies.

AnnaMaria M. Turano

Executive Director, MCAworks

http://www.mcaworks.com

aturano@mcaworks