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Retailers are trying hard to catch up with consumer demand for products in-store, online, on mobile and other emerging channels. While 90% of US shopping is still done in-store, the value of online, mobile and other channels is increasing quickly. CB Insights recently published a fascinating report on 72 companies using technologies like wearables, augmented reality and beacons to bridge the gap between digital and physical shopping. Today, we’re looking at eight of these tech innovators in the coupons and rewards, and loyalty segments to keep you up-to-date with the latest digital tools for retailers.
Members of retailers’ customer loyalty programs generate between 12 percent and 18 percent more revenue for retailers than do customers who are not members of the loyalty programs, according to new research from Accenture Interactive.
This key finding was based on a survey of retailers across specialty, big-box, department, drug and convenience stores in the United States. The Accenture research sought to identify key trends and challenges of retailers’ loyalty programs.
“Today’s customer loyalty programs are an increasingly expensive, complex and expansive business that extend beyond the marketing team into the entire organization,” said Farrell Hudzik, managing director of Accenture Interactive’s Global Loyalty and Rewards practice. “Given that loyalty program members generate significant incremental revenue compared with non-members, retail loyalty program leaders must anticipate future growth trends and capture the opportunity to differentiate in an increasingly fragmented marketplace.”...
Via Douglas G Hall
So why fix something that not only isn’t broken, but which has been the most significant driver of Starbucks’ top and bottom-line growth, according to their CEO (see one of numerous Howard Schultz quotes here)? Because some clever users figured out a way to optimize their spending to get over rewarded.
Starbucks does sell some items priced at around $1, so a user could have spent as little as $30 over 30 visits to achieve Gold status. After reaching that Gold status, that user would be entitled to any of the most expensive drinks on the menu, like a venti Frappuccino, for free — after only 12 more visits totaling a spend of only $12. So in response, the brilliant change Starbucks made to the loyalty program was to make it spend-based. And they also increased the stars-gathered requirement for a free item to about a bazillion stars.
This is broken on so many levels, but there are already enough rants out there about the new loyalty program. What really bugs me is how they missed a few simple points:...
Customer brand loyalty is a rich and complex subject to grasp, but there is a lot of data around the subject. For your convenience, we've compiled dozens of statistics to help light the way - from how many people are active in loyalty programs to what they're looking to get out of them and how they'd like to be communicated with. We've tried to make this list as relevant as possible, which means we combed through recent research with a focus on the US (with the occasional global stat thrown in).
These stats are culled from a variety of sources, and we've provided source links for each of them (though some are gateway pages that require you to register or submit your information to receive the actual research). Sometimes the data conflict with other sources - we'll leave it up to you to decipher which is most accurate.
We'll keep this list updated on a weekly basis with the latest and greatest. If you know of a stat we're missing, or want your own research included in our collection, leave us a note in the comments....
One great way to garner happy returning customers is through customer loyalty programs.
They're not just great for your business: customers like them, too: - 76% of consumers think that loyalty programs are a part of their relationship with brands -- and - 83% said loyalty programs make them more likely to continue doing business with certain companies.
What's the true value of customer loyalty programs, and what are the right and wrong ways to do them?...
If you've read anything on the costs of customer acquisition vs customer retention over the last 20 years, you'll have heard that customer retention makes good business sense. And while the traditional loyalty card is dying out, loyalty itself is more alive than ever - but marketers need to take a different approach, according to myCircle.
Experts claim that it costs anywhere between 3 and 30 times more to get a new customer through your door than it does to persuade an existing one to return - even if that door is virtual, in the form of a website or mobile app. With figures like that, just imagine the increase in profit margin a business could make on something as simple as a cup of coffee… if it's customers loyally returned on a daily basis. 64.180.55.243 This article is copyright 2015 TheWiseMarketer.com.
The traditional answer to this has always been the loyalty card, but the truth is, whilst loyalty schemes are more popular than ever, the loyalty card that you are so readily handing out… the one that your customer has just stuffed inside his or her wallet or put on a key fob, is dead weight. In an age where the world is moving toward an integrated online/offline experience, the loyalty card is inflexible, inconvenient and simply no longer fit for purpose. Cards get lost or forgotten, rewards go uncollected and the loyalty that you're expecting your card to deliver, will never arrive....
Although there are some interesting developments on the horizon for couponing, it’s undeniable that a lot of what’s being proposed for the future seems to involve more invasive methods that deny shoppers that element of choice – which I think is crucial.
At the moment, as an industry we’re already doing incredibly well at converting traffic during that all-important Zero Moment of Truth – ensuring that when a customer searches for a code to use at checkout, you can deliver. Hacking and playing with the boundaries of technology is crucial for keeping companies fresh, but it’s important that we don’t forget the present: the Zero Moment of Truth is still at the core of what we do....
Tesco announced recently that it had been running a trial at its new concept store on Villiers Street in central London, in which digital discount coupons were pushed to the smartphones of 40,000 shoppers who had ether passed by the store six times during a two-week period or walked in and out of nearby Embankment station.
Customers could redeem their coupons by scanning them at one of the store’s self-service checkouts. Tesco described the trial as an attempt to use the ever-increasing popularity of mobile to address some of the challenges to maintaining customer loyalty that have been created in recent years by the growth of omnichannel retail....
Enrollment levels in customer loyalty programs may have reached an all-time high, but that doesn't mean all loyalty programs are created equal or that all customers are equally loyal.
According a study recently released by Bond Brand Loyalty, as many as one-third of all loyalty program participants wouldn't remain loyal to the brand if it weren't for the program.Some executives might not care beyond the surface sales data, but expect that sentiment to change in the near future.
Customers are becoming more selective about loyalty programs despite having increased their enrollment from 10 in 2014 to 13 in 2015. Mostly, they want to avoid spam-centric programs that push out content and opt in to those that truly listen and understand their customers....
According to the research survey, 62% of U.S. consumers join retail brand loyalty programs to get discounts but only 36% have received a reward or promotion from the program that actually made them come back to the brand. One reason might be the fact that, according to the survey results, 81% of brand loyalty program members don’t understand the benefits they’re supposed to get from the program or how the program works at all.
Brand loyalty programs can provide a lot of benefits to marketers but the more the program is customized for each customers needs the better chance of success.Loyalty is different for each customer. The key is to provide enough loyalty experiences that your best customers are appreciated. As we all know, the 80-20 rule holds true for most retail and restaurant businesses. Find those 20% and figure out what makes them loyal, get to know them. Acknowledge different customers by basing your loyalty program on services that you provide each time they visit. Give your customers something to work towards by offering a tiered program where the best customers receive more points per purchase in appreciation for their long-time support of your business....
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Gift cards used to be a last-minute purchase when consumers were stuck for a last-minute gift, but they’re now a gift selected because it gives the recipient more buying choices and flexibility. The gift card marketplace continues to evolve and we’ve got some research and innovations to share to keep you up-to-date on gift card trends. CEB reported US gift card sales in 2015 totaled more than$129.7 billion, a 6.3% increase over 2014 sales of $122 billion. A new research report by CashStar showed 91% of consumers were happy with their gift cards. The same report showed digital gift cards were the biggest growing gift card segment up 26% to $7.1 billion in 2015. According to the Incentive Research Foundation, another big trend in gift cards in 2016 is the increase in luxury gift cards for purchasing electronics (cited by 31% of respondents), open-loop gift cards (28%), luggage (24%), and watches (23%). Lyft and Starbucks launched a joint gift card promotion each selling the other’s gift cards. C-stores have seen the impact of technology and are experimenting with digital and mobile cards. Swych, Inc launched an innovative digital gift platform and iOS mobile app for US consumers who can use a unique app to send “Swychable” gift cards redeemable at favorite retailers. Research by National Gift Card Corp shows 72% of sales came from three categories: big-box retailers (29%), open loop rewards cards such as Visa and AMEX (23%) and entertainment cards (10%)....
Forrester’s data shows that marketers have their sights set on improving loyalty in 2016. In fact, 80% of marketing decision-makers at large organizations call it a top marketing priority for the next year. And, my recent conversations with loyalty marketers reveal a desire to shift from transactional loyalty to more emotional loyalty. Marketers want a deeper, lasting relationship with customers that tugs on both emotions and purse strings. But are they actually executing on it? We surveyed 60 loyalty marketers from North America to find out.
From a strategy perspective, the marketers we surveyed aspire to, and are investing in, evolving their loyalty programs and initiatives. They turn to loyalty to drive multiple business outcomes, including retaining existing customers (of course), engaging customers, improving customer lifetime value, enriching relationships and even acquiring new customers.
Plus, they are invested in their current approach: literally and figuratively. Nearly 80% of survey respondents indicated that their programs and initiatives are effective at retaining existing customers, and a majority thinks they are effective at boosting customer profitability, improving share of wallet, enriching relationships and enhancing the customer experience. And, the majority of respondents plan to increase investments in important components of advanced loyalty, such as customer experience, analytics,...
Gary Friedman has a pronounced distaste for discounts. The outspoken Restoration Hardware chairman and CEO blames the retail sector’s reliance on sales and pricing promotions for many of the problems facing the upscale home furnishings chain.
“Much of how we behave promotionally is left over from the Great Recession,” Friedman wrote in a February letter to shareholders published ahead of Restoration Hardware’s disappointing Q4 2015 earnings report. “The multiple sale events and email communications do not reflect the brand we are building, nor are these promotions aligned with how our customers shop with us.”
Restoration Hardware is eliminating traditional promotions altogether in favor of introducing a premium customer rewards program. Priced at $100 per year, its new RH Grey Card offers shoppers a flat 25% savings on all regularly priced merchandise across all of Restoration Hardware’s brands, along with 10% savings on clearance merchandise, complimentary interior design services and reduced interest rates on its RH credit card.
“Our lives are filled with complexity—and we long to break through the clutter to find simplicity,” Friedman said in a press release announcing the RH Grey Card program. “We want to shop for what we want, when we want and receive the greatest value. So rather than navigating countless promotions, we’re changing things… because time is the ultimate luxury.”...
For many, coupons have strange connotations. They're something moms cut out, or they're only used by poor folks or the elderly.
In reality, the opposites of these are true - coupons are incredibly popular among affluent folks and millennials (not to mention every other demographic), and they don't even have to be printed out anymore, so keep your scissors in the junk drawer. As these statistics reveal, the coupon is still a driving force in commerce that connects people (and their wallets) to brands. People will never tire of saving money, and brands are always looking to bring in new customers. Mix in a decade-long struggling economy, and you have a savings-savvy mindset that isn't going away anytime soon.
Enjoy this collection of coupon stats, which we plan to keep updated with the most current and relevant research on an ongoing basis. If your company has completed research into these fields that we should include, please let us know....
When The Wise Marketer's team began to research and write 'The Loyalty Guide 7', they found that the loyalty market has never been so active, so passionate, so fast changing, and so heavily relied-upon by companies of all sizes to drive customer retention and acquisition, incremental sales and profitability, competitive differentiation, engagement and advocacy.
After completing work on The Loyalty Guide 7, the team reviewed their findings and drew up their 'Top sixty new lessons in loyalty marketing' from the report's 1,420 pages of up-to-date facts, figures, forecasts, trends and loyalty case studies from all around the world....
It’s hard to believe that loyalty programs once weren’t an industry standard. Loyalty programs, in their current form, didn’t truly emerge until the 1980s. Even still, it took another decade for the card-based loyalty programs that most consumers currently utilize to gain popularity. Today, the trend is in full force: from retailers to restaurants to hotels, there isn’t a customer-centric industry that hasn’t embraced the concept. But these programs aren’t cheap and the question of whether they pay back is a widely debated topic.
What can’t be debated is that loyalty programs provide the ability to track your customers over time, understand their behavior, and establish a one-to-one communication channel with each individual customer. This targeted communication channel is where the secret to monetizing your loyalty program lies.
The purpose of a loyalty program can be condensed into a simple sentence: Loyalty programs help you figure out who your best customers are and provide them with right incentives to spend more money with you. It sounds straightforward, but in practice, most companies struggle to achieve this goal.
The challenges associated with this goal are clear when we focus on three key phrases in the sentence: “best customers,” “right incentives,” and “spend more money.”Let’s dive into each of these aspects:...
Rewarding customer loyalty also delivers rewards for brands. Research has found that 70% of consumers would be persuaded to choose a brand if it offered such rewards.
But it goes beyond that. Consumers are savvier than ever and tend to shop around for the best deal, so it’s tricky for companies to stand out. You may offer a good product, but the chances are it’s available elsewhere, too. They want more.
Nowadays it’s more about the service; the whole package that comes with the product. Rewarding loyal customers is essential to ensure that they feel appreciated, maximising the chances of retention....
The 2015 Loyalty Report saw an increasing number of people opt-in to a variety of loyalty programs in the past year, and revealed the extent to which programs are effective in influencing customer behavior show no signs of diminishing.
Here's a Top 5 list of what's trending in loyalty....
It’s finally happening.After years of putting up with blackout dates, broken promises and bait-and-switch games, American travelers — particularly air travelers — are saying “Enough!”
They’re refusing to play the loyalty-program game, jettisoning blind brand allegiance in favor of a more pragmatic view of travel. Price and convenience are trumping mindless devotion to an airline, a car rental company or a hotel.
In a recent survey, a plurality of travelers (38 percent) said that finding the best deal topped their list, a tectonic shift from previous years, when collecting credits in a frequent-flier or frequent-stayer program was more important. Only 9 percent of travelers will book their trips based on loyalty to an airline or hotel chain, according to the poll conducted by Wakefield Research on behalf of Capital One....
Loyalty is an increasingly fleeting thing. In fact, the average Gen Y mother now defines “brand loyalty” as a window of allegiance lasting 6-12 months before she moves on to explore alternatives. And suffice to say, there are plenty of alternatives out there for her to explore, regardless of category. So, given the increasingly elusive nature of loyalty and the abundance of brand and product choices available, one might be inclined to argue that there’s never been a more important time for you to implement a loyalty program.
But it’s simply not true and here’s why…
Any loyalty program you create probably won’t work. But don’t feel too badly because as it turns out, most loyalty programs don’t work – at least not the way the companies who own them would like to believe. In fact, a recent study from Edgell Knowledge Network found that the level of actual brand loyalty among consumers who are part of a loyalty program versus those who are not, is not materially different.
So, why don’t most loyalty schemes work? Research points to several reasons....Loyalty programs are transactional. Loyalty isn’t....
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Useful update on coupon and loyalty program innovators.