Are Retailers Changing Their Loyalty Marketing Stripes?
We recently attended CRMC in Chicago and were struck by how the conversation has shifted on a number of fronts. While there was a notable theme around the basic fundamentals of CRM, and a not so inconspicuous lack of shiny bright objects (i.e., Facebook, Groupon, etc.) compared to recent years, more than ever there was increased discussion around the importance and usage of non-points-based loyalty programs and benefits.
This is something we’ve been writing about and working on with our clients for quite some time (see our blog post from last year, "The Revolution Will Not Be Televised"), and it’s highly refreshing to hear a few leading brands discuss loyalty and CRM initiatives built on elements of recognition, soft benefits and a better customer experience. In essence, their focus is shifting away from the traditional points-based, frequent flyer model to making the customer value proposition more focused on the experience and delivering benefits differentially (i.e., not to every customer or even to every customer segment).
We heard from global retailers including IKEA, whose IKEA Family program provides members with relevant offers and content as well as in-store experience offers for food and family fun.
Cabela’s shared how it changed the way it does business internally, socializing customer insights from loyalty and CRM to educate executives throughout the organization, thus arming them with the right knowledge to improve how they operate.
Both retailer examples provided key lessons to CRMC attendees — whether you use the rich data derived from loyalty programs for marketing or operational purposes, the benefit is in using the data.
Despite the success of IKEA and Cabela’s, other chains including Shaw’s and Jewel-Osco are abandoning loyalty programs to focus on lower prices and away from personalized, targeted marketing.
So who’s right? In our opinion, it is IKEA and Cabela’s who are fundamentally changing their strategic marketing approach to a customer-centric and experiential model rather than relying on traditional, mass-marketing loyalty and CRM approaches.
Do you think the shift in loyalty programs away from points, rewards and discounts to soft benefits, experiences and relevance is a positive or negative for retailers? Do you think the shift represents a long-term trend or is it the flavor of the day?