Every shopper likes to belong, to feel like an insider, to get a good deal that can’t be had anywhere else. At least, those are the cravings that retailers are counting on – and playing to – by asking their customers to use so-called loyalty cards, those small pieces of plastic so many of us have been conditioned like sheep to carry around in our wallets or on our key chains.
I don’t know about you, but I have a handful of them, three for groceries alone (Stop & Shop, Shaw’s and Price Chopper), one for books (Barnes & Noble) and one for, well, this and that (CVS/Pharmacy).
And while I sometimes feel like I’m being subjected to undue scrutiny when asked to produce one of these cards at the register, like a groupie with a backstage pass, I’m always happy to oblige. To me, the benefit of identifying myself to a clerk (okay, to a computer database) in what some might characterize as an Orwellian moment far outweighs the hassle.
Sure, there are those who dismiss such a business transaction as too “big brother”-like, worrying about the potential misuse of private, personal data for unfair and disproportionate commercial gain. But obviously I’m not one of them.
The truth is that loyalty cards are a great way for marketers to monitor buying patterns and forge long-lasting, mutually-beneficial relationships with their target constituencies. In exchange for handsome discounts on products and services, or a certain number of points which can be used towards future purchases, they give the issuing establishments a way of tracking your behavior as a consumer and, thus, stocking their aisles accordingly.
Take the Hallmark Gold Crown Card, for instance, which my wife, Barbara, dutifully keeps in her purse. Hallmark uses this card to track – and thank her for – how much she spends on its products. Over time, her points accumulate and she receives what the company refers to as “reward certificates,” each one worth at least a couple dollars off her next Hallmark purchase.
One of these “certificates” arrived in the mail recently along with a birthday card addressed to Barbara – yes, a real Hallmark birthday card, canary yellow envelope, gold-embossed wafer seal and all – from The Paper Store in Sudbury, perhaps my wife’s favorite place to shop, located just a few miles from our house.
To say she was surprised – albeit pleasantly – to receive such a generous offer disguised as a birthday card would be an understatement.
What’s not so surprising, however, is that such loyalty marketing tactics are incredibly effective. After all, not only does Hallmark have my wife’s address, it knows where and when she shops for greeting cards as well as how faithful she is to its brand.
Talk about a captive audience!
But my better half isn’t the only one in my house on the Hallmark file. The fact that I use my Extra Care card so often at CVS/Pharmacy, another store in Sudbury, means I get a lot of direct mail from this chain’s corporate headquarters. That doesn’t mean I was prepared, however, for the brilliantly executed, cooperative promotional piece I received last year (and wrote about here in my blog) before my own birthday on behalf of Hallmark’s Shoebox line of cards.
I like to buy a handful of cards at a time, and I had just recently gone on a binge. So not only did CVS (with a little help from Hallmark) have the mailing lists and sales proposition down pat, but the timing was right, too.
Let’s not overlook the creative presentation, either. Not unlike the aforementioned piece of mail my wife received from Hallmark, inside a faux hand-addressed envelope were several coupons for Shoebox cards nested inside an actual, life-size birthday card that read as follows:
“It may not be your birthday, but we just couldn’t wait to show you this great card! It’s from the new Shoebox collection at your local CVS store. Come on down for a look, and bring these exclusive coupons along. They’re our way of saying thank you for being one of our most valued customers.”
Yup, one of their most valued customers. That’s me. That’s me and my wife, too, not to mention practically everyone and his or her uncle, all of us card-carrying converts to the power of loyalty marketing, whether we realize it or not.
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Great Post, Bob
I too am a big fan of loyalty cards. Like you, I carry around several loyalty cards, but I wonder how many more I can fit before I just say “no more.”
I am guessing that some day soon, retailers are going to have to compete for space in may wallet and on my key chain.
As a direct marketer, I have been waiting a long time for loyalty cards to take hold. It is the ultimate direct marketing tool for retailers, but it took a while for the technology to make it practical.
For many years and still today, small retailers have used “frequency” cards to reward customers after a certain number of purchases or visits. The customer would keep the card and present it to the merchant (to be signed, stamped or punched) with each purchase.
These cards do serve one purpose – they can increase customer loyalty. But they fall short in one very important way – the retailer doesn’t know who his customers are, what they buy, when they buy, how much they buy or when they stop buying.
He might get their name at “sign-up” (although that is seldom done), but he doesn’t have any idea who his best customers are — which is really the key to loyalty marketing.
Fifteen years, I created a loyalty card program for a local restaurant that rewarded customers for repeat visits, but we had to do everything manually. We printed plastic, embossed loyalty cards (with unique numbers)and 2-part forms that could be placed in credit card transaction machine. The waitress would process the loyalty card when she handled payment.
At the end of the night, someone (usually the owner or the manager) would have to input all of the information into the computer.
Obviously, today’s loyalty card programs are all part of the Point of Sale system – which is good news for the customer and the merchant.
So far, most of the loyalty programs we see are from larger retailers and chains. I am curious to see when (or if) these programs will take hold with the smaller retailers.
So much of it depends on the technology (the capability of low-end Point of Sale systems), but it also depends on the retailer’s willingness to look beyond the traditional methods of retail advertising. Time will tell.
Bob McCarthy
The Direct Response Coach
GREAT post, Bob. Loyalty marketing, via cards or personalized discount coupons is a ladies best friend. If folks took time to understand loyalty marketing…it would help improve business dramatically for them. As Bob McCarthy states, it’s harder for us little guys — the technology is still a bit expensive, but…blogging can help that. It’s a good way to learn who’s interested in you, how often they visit, and which posts gets the most traffic.
Someone needs to find a way to track all of this cost-effectively. Maybe someone has??? I don’t know, do you?