BrainTrust Query: The Enduring Allure of the Secret Handshake

Discussion
Jan 24, 2011

Through a special arrangement, presented here for discussion
is a summary of a current article from the Retail Prophet Consulting blog.

Facebook
has become the ultimate online commune. Anyone can jump on a Groupon deal.
There are no requisites to joining Foursquare, Flickr or almost any other web
based social community. In fact, the web in general has in many ways become
the truest expression of the idea of equal access and egalitarianism — the
democratization of everything.

But let’s also not forget when high school
kids were lying about their age just to get a Facebook profile because the
service was exclusively for college students. It could be argued that those
early barriers to entry are what fuelled the mystique and excitement around
Facebook. Membership became coveted and cherished. The truth is that we like
exclusivity. We relish having privileges that others don’t enjoy. We all long
to know “the
secret handshake” that
takes us where others can’t go.

That’s why I believe we’re
poised to see a gradual but steady shift toward a decidedly less inclusive
web. This is not to say communities like Facebook won’t continue to grow
but that people will slowly begin to seek deeper, more valuable and ultimately
more exclusive communities to belong to.

In fact, a number of communities already
require certain criteria of their membership:


  • Path.com calls itself a “personal site” that limits users to
    linking with a maximum of 50 friends.
  • Collegeonly.com picks up where Facebook began by creating a social network
    exclusively for college students.
  • Asmallworld.net has been called “MySpace for millionaires.”
  • Beautifulpeople.com (Believe it or not!) is a site where users’ photographs
    are actually voted on prior to being granted access. That’s right,
    no ugly people allowed!

While sites like beautifulpeople.com may strike us as nothing more than tasteless
elitism, they point to the underlying human need to feel special, unique and
valued via exclusive membership.

Retailers on the other hand have inundated us
with free memberships and loyalty programs. As a consequence, we begin to shy
away from loyalty programs altogether. After all, if anyone qualifies, how
valuable can it really be?

Some brands like Starbucks and Lululemon have hinted
at a sense of exclusivity by creating a strong culture complete with their
own product languages. Others, like Neiman Marcus and Saks, have excluded largely
through pricing. Even sites like Gilt Groupe and Rue La La have built their
businesses on a by-invitation-only model — although getting an invitation
isn’t a challenge.

I would argue, though, that there’s an opportunity
to take the notion of exclusivity much farther, creating private customer communities
that are so experiential, enjoyable and value-added that consumers would clamor
for access. Unlike more banal retail loyalty programs, the potential exists
to build members-only branded communities offering everything from social connections
through to exclusive media, products and even live events. Imagine belonging
to a branded social network so exclusive and valuable you’d be willing
to pay to belong!

This runs completely contrary to the DNA of many marketers
who have come to regard success as providing reasonable value to as many people
as possible. In exclusive communities, by contrast, success lies in creating
enormous value for only your very best or most influential customers … the
chosen few, as it were. It means creating deep brand experiences for some instead
of shallow brand experiences for all.

Discussion Questions: What do you think of the potential for more exclusive brand communities? How might they add value for consumers in ways that store loyalty programs currently can’t? Are consumers tiring of typical loyalty schemes?

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8 Comments on "BrainTrust Query: The Enduring Allure of the Secret Handshake"


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David Dorf
Guest
10 years 3 months ago

When I think about loyalty programs, I always first consider the travel industry. I am very loyal to my airline, hotel chain, and rental car company and it’s not just because they award me points. It’s also because I get treated differently (actually much better) than other travelers. Every time I travel I am reminded that I’m valued more than others, and that feels good.

That’s harder to pull off in a retail store since shoppers don’t necessarily identify themselves until the end of the experience when it’s too late to do much. But the concept translates well to the online experience, and especially to social networks.

I expect to see today’s “badge” concept to penetrate deeper into social networks and e-commerce sites, because sometimes acknowledgment can drive behavior as well as discounts.

Fabien Tiburce
Guest
Fabien Tiburce
10 years 3 months ago

Exclusivity will always have allure but many brands find the mass market even more alluring. Unfortunately you can’t be both “exclusive” and mass-market at the same time. In Paris, the Louis Vuitton stores imposes a limit of one hand bag per customer. I hear this policy was put in place because affluent Asian customers were scooping them out (keep in mind they cost thousands of dollars each…). Louis Vuitton knows that to remain exclusive and command these sorts of prices, your product can’t be on the arm of every woman.

It is engineering rarity and exclusivity. This is neither good nor bad. They get great margins but low volumes. Too often however, you see “exclusive” chains growing big and trying to maintain that sense of exclusivity. It just doesn’t work when everybody at the mall already wears one….

Max Goldberg
Guest
10 years 3 months ago

Consumers are tiring of loyalty programs because, for the most part, they do not offer immediate gratification or rewards. All most cards seem to do is offer access to every day low pricing. That doesn’t build loyalty…it builds frustration.

Consumers want real value and savings, not artificial club card programs. Save them time or save them money or offer outstanding customer service and you will build loyalty.

Liz Crawford
Guest
10 years 3 months ago

There will always be a market for exclusive goods, especially in certain status symbol categories like fashion, cosmetics, cars, jewelry, etc. In Japan and elsewhere, there are “shopping clubs” where you have to be invited or sponsored to join. Then you have access to exclusive goods and services. Since the world is digital, and our societies are too, it follows that exclusive social networks are the next big thing. What matters then is critical mass of the right people, not just critical mass.

Ralph Jacobson
Guest
10 years 3 months ago

David Dorf mentioned the travel industry loyalty programs that I use as some of the best examples of generating compelling reasons to remain exclusive to a brand. So that is indeed a “mass + exclusive” program that succeeds in the marketplace.

Another may simply lie in the apparel industry with so many brands leveraging their messaging through their own fashion. Whether your T-shirt has an “AERO,” “BEBE,” or “Hollister” logo, this shows that consumers are willing to pay the retailer/manufacturer to advertise their brand for them. What a concept! LOL So, how about in the supermarket biz? Is it not fashionable and somewhat exclusive to carry a “Whole Foods” reusable bag?

Bottom line, I believe there are myriad ways to drive a brand into the market while maintaining a very exclusive image.

Gene Detroyer
Guest
10 years 3 months ago
I echo David Dorf’s comments on the loyalty programs in the travel industry. The challenge is that the travel industry is able to demonstrably treat those with more miles/points differently than others. It is not a matter of price. Unfortunately most retail loyalty programs focus on a price factor. If you have a card you can get a special deal. Or, with a card you collect points that buys “X.” Or, you merely get X% off on your cart. These are nice and it may make a difference, but with a key ring full of retail loyalty programs it rarely makes does. But, social media and on line presents a completely different opportunity or challenge. Not unlike the ability to automatically record favorite TV shows by series, the connection narrows alternatives. For TV, once you program your DVR or computer to record or access certain series, one is less inclined to explore other options, especially new shows. Similarly, as social media takes a greater hold of an individual’s attention, those things connected with it will… Read more »
Jonathan Marek
Guest
10 years 3 months ago

How many different social communities can one person possibly join? It seems to me that closed communities aren’t the answer for the most part. Maybe for very highly affiliated groups like university alumni, but not for the marginal retailer (even one that I like). For retailers that do invest in this, I worry they’ll be talking only to their very, very best customers, which is fine but does not achieve the breadth of the most effective marketing programs.

Anne Bieler
Guest
Anne Bieler
10 years 3 months ago

To build exclusivity, you need to target the shoppers/consumers you want, then communicate effectively. Several of the national brands are working with Facebook communities–geographically selected, where members are invited to join for a specific product/purpose. This creates a small brand community to give feedback on new products, discuss product usage, etc.

Key is target and opt-in choice–facebook or similar can drill down to a smaller community; those who opt in are brand “fans” and will send to their friends who might also be interested–a more “selected” group. It’s the connections that matter and two-way conversation that can make a difference.

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