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Keeping Shoppers Engaged and Interested – A New Loyalty Model?

Wednesday, July 29th, 2009

All the stats show that loyalty and reward programs are on the rise (Colloquey Talk). Most shoppers are opting in simply to save money. (Forrester: Building Lasting Customer Loyalty). That makes sense, especially given the current state of the U.S. economy. However, is saving money enough to keep shoppers engaged and coming back for more?

I’ve come across some unique, different and creative ways brands are trying to recruit and keep shoppers engaged and, more importantly, keep them coming back. It’s a slightly different approach than the typical credit-card or loyalty-card program.

Receipt Treat – Starbucks® offers the following to all patrons who make a purchase.

Pick of the Week – Starbucks offers a free iTunes® download every Tuesday to all patrons.

Starbucks still uses its Starbucks Reward programs.

Free Nutritional Coaches and Nutritional Classes/Seminars From Vitamin Cottage® (a natural grocery store). No purchase necessary, no signing up, just free personalized and customized advice based on questions submitted by shoppers.

First Drink on Us and 10% Off Food Items from Baker St. Pub & Grill®
A card handed out to nearby employees of businesses giving 10% off all food items and the first drink for free at all of their upcoming visits. No signup required. No expiration date.

These different approaches suggest the following:

#1 – Brands are relinquishing some of their control over shoppers. No required shopper information is needed to engage and interact with the brand in the above examples.

#2 – These retailers are giving value-added perks to all of their shoppers, not just to those perceived to be the most profitable. This flips the traditional CRM model on its head. Equality to all shoppers, not just to a select few.

#3 – These examples provide more ways for shoppers to benefit from a brand relationship versus just saving money on products. These acts by brands actually provide more value to shoppers, raise brand opinion, increase brand loyalty, increase store visits, and ultimately increase purchase amount and frequency.

A New Model?
At its very basic definition, the model of a traditional CRM/loyalty program is to determine how the brand can leverage shoppers in its database to its own advantage – in other words to maximize the brand’s profits. The above examples suggest the makings of a flipped model where shoppers benefit by receiving the most personally relevant value from the brand.

This leaves me pondering still more questions. What do you think?

  • How should brands determine what constitutes the strength of the relationship with shoppers, outside of financial profitability? What are these behaviors? Purchase, Web visits, downloads, posts about their brand on blogs, etc.?
  • Which model is the right model?
  • Should different models be used in different economic situations?
  • Is there any value in practicing both models simultaneously?
  • Should brands think about the strength of a relationship with shoppers vs. how profitable a shopper can be to them? Long term vs. short term?
  • What forms of value (other than savings and discounts) can brands give shoppers that are meaningful and relevant? That cost the brand little to no money?
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