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April 2016

1-2-3 from Kroger, now 3-2-1 from Walmart

Mass merchants are following the airlines into integrating their rewards programs with financial accounts, credit cards and prepaid cards. 

I'm a huge fan of the Kroger Rewards Card, a VISA card that tracks my purchases and offers 3% back on store-branded merchandise, 2% on everything else we buy at Krogers, and 1% on other charges to the credit card. The rewards come in the form of rebate checks that can be spent on anything at Kroger's, including alcohol. A gasoline discount program is included, and I participate, but I never know what discount I'm going to get.... Is that what 'surprise rewards' means? Occasionally, I receive coupons for things I regularly buy. That conveys personal recognition, which I appreciate. This loyalty program was invented for Kroger by a loyalty marketing firm named dunnhumby

Now Walmart is getting on the band wagon with their own 3-2-1 rewards program, integrated with either a credit card OR a pre-paid card. Interestingly, the 3% back option is offered for only for online purchases. Instead of mailing rebate cards, Walmart is crediting the cardholder account, which would be TERRIFIC, Kroger! Are you listening?

Of course, any company which can afford to run these type of programs will accumulate a mountain of data about its customers. Some will use it wisely, and some will fumble. We're looking at you, Target. 

Stunted trees compete for air
Image by Andy Walker on Flickr

 


How we move past mercenary loyalty, according to Maritz

Many people equate customer loyalty with a 'loyalty rewards program.' They assume that loyalty is 'mercenary.' But if we stop and consider for a moment, we realize that many brands, like BMW and Apple, have reached 'true loyalty,' where repurchase is based on the desire to continue a great experience. Incentives may be used to trigger the timing of a purchase, or to encourage add-ons, but they don't drive commitment to the brand. 

People are loyal to brands that make their life better. No rewards program is required, but we have to decide how the brand serves the customer, then be clear and consistent. Rewards programs can add fun, awareness, and involvement. The best programs make the customer feel appreciated, recognized and special. 

Maritz: LoyaltyNext Customer Study Measures Consumers’ Engagement with Brands, 2016-March-1

“When evaluating your brand, consumers also are evaluating your loyalty program,” said Barry Kirk, VP Customer Loyalty Strategy for Maritz Motivation Solutions. “Marketers shouldn’t be surprised by this, as US consumers have been trained for decades to expect brands to pay them for their repeat business.”

In other findings, 43% of consumers join loyalty programs because of the desire to earn rewards. Only 17% of those in loyalty programs say they joined out of love for the brand’s products and just 5% because of a shared identity with brand values. Six out of ten customers believe that companies only offer rewards programs to get them to buy more, rather than in an effort to build a relationship with them.

Martiz: Customer Insights Brief, 2016

The problem is only 24% of program members strongly agree that their loyalty program “treats me like an individual,” and only 25% strongly agree that their program is “personally meaningful to me.” 

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Photo by Kathy (kthypryn) on Flickr

 


Do we have something to say that other people want to hear?

Because I have written a tremendous number of newsletters, I feel obligated to read a big, diverse group of them. Wading through them is like placer mining: lots of dirt is handled to find a tiny bit of gold. But, in general, I enjoy reading those which are well planned and written, even if I don't learn much. I totally agree with these things Caroline says about content: 

  • Quality > Quantity
  • Low volume does not mean low quality or low impact
  • You can break out of your category (see below)

I really enjoy pondering the chart that Caroline Tseng created, and I annotated it with some B2B categories based on my own preferences. 

The point: When sending messages about your business to your customers, by any medium, you have to remember their attitude about the category you operate within. That's your context, and you can't change it, you can only overcome it. 

Carrot on Medium: No one Gives a Sh*t About Your Content... and What to do About it, 2016-Feb-12 by Caroline Tseng, Associate Director of Strategy for Carrot Interactive

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