Bring ‘Em Back for More
The reason I like when merchants are really explicit in showcasing their discounts is because when a customer is contemplating whether or not to join a loyalty program, they start doing the math. Let’s say they get 10 percent off, and it costs $30 to join. They start trying to figure out how much merchandise they must buy to make back their investments. They get focused on math instead of on product and other member benefits. When you show the special member prices explicitly, it places the focus back on the product, because the math is already done for them.
Another program I wouldn’t have initially thought was so great is offered by Eurosport. The reason I wouldn’t have thought it would work is because it’s a points program, which tend to be complicated. For the catalog’s audience though, it works really well. Every purchase a member makes earns points for free merchandise. In its catalog as well Eurosport is very explicit about how many points it will take for any given item to be free. It encourages people to spend more because now they’re focused on how much they need to buy in order to get that next item for free. Customers can see the rewards very clearly right in front of them.
The other thing I really love that Eurosport does is that the price of membership is completely refundable if the customer is not satisfied. I’ve not seen any other company do this. I think this says volumes to a customer about the confidence level of the cataloger and the risk it’s willing to assume to get the customer’s business.
Q. What steps should a cataloger take before instituting a loyalty program?
A. First define what overall goal they want to achieve, whether it’s extending lifetime customer value or something else.