BrainTrust Query: The Disloyalty Card
Commentary by David Dorf ,
Director of Technology Strategy, Oracle Retail
Through a special arrangement, presented here for discussion is an excerpt
from a current article from Insight-Driven Retailing Blog.
A few months back, James Hoffmann reported that Gwilym Davies, the 2009 World
Barista Champion, had implemented a rather unique idea for his cafe: the disloyalty
card. His card lists eight nearby cafes in London that the cardholder must
visit and try a coffee.
After sampling all eight and collecting the required
stamps, Gwilym provides a free coffee from his shop. His idea sends customers
to his competitors.
What does this say about Gwilym? First, it tells me he’s confident in his
abilities to make a mean cup of java. Second, it tells me he’s truly passionate
about his trade. But was this a sound business endeavor?
Obviously the risk is that one of his loyal customers might just find a better
product at a competitor and not return. But the goal isn’t really to strengthen
his customer base – it’s to strengthen the market, which will in turn
provide more customers over the long run.
This idea seems great for purveyors of frequently purchased products like
restaurants, bars, bakeries, music stores, and of course, cafes. It’s probably
not a good idea for high priced merchandise or infrequently purchased items
like shoes, electronics, and housewares.
Nevertheless, it’s a great example of thinking in reverse. Try this: Instead
of telling your staff how you want customers treated, list out the ways you
don’t want customers treated. Why should you limit people’s imagination and
freedom to engage customers? Instead, give them guidelines to avoid the bad
behavior, and leave them open to be creative with the positive behavior.
Instead of asking the question, "How can we get more people in our stores?" try
asking the inverse: "Why aren’t people visiting our stores?" Innovation
doesn’t only come from asking "Why?" Often it comes from asking "Why
Discussion Questions: What do you think about the concept of a "disloyalty
card" that encourages customers to try competitors? How applicable is
such a program for retailers outside coffee shops? What other counterintuitive
strategies work for retailers?