Tag: shopping

Capital One Survey Reveals Rewards Redemption on Rise; also offering Purchase Eraser

This “Black Friday,” the traditional prime holiday shopping day, nearly half of rewards card holders are not planning to hit stores or online retailers according to the latest Capital One Rewards Barometer, a quarterly survey among American consumers that focuses on how they accumulate and redeem credit card rewards. However, that doesn’t necessarily mean holiday shopping budgets are down as more than half of rewards card holders’ (58 percent) budgets remain the same as last year and 14 percent are planning to spend more this year. Credit card rewards can help supplement these holiday budgets, yet only 18 percent are taking advantage of redeeming rewards for gifts.

More than one-third of respondents said the economy has changed how they use rewards, especially women with 23 percent reporting that they now use rewards to offset essential expenses like gas and groceries. Further, this holiday season, more women plan on spending less than the prior year in comparison to men (24 percent vs. 18 percent). Thinking ahead to post-holiday shopping bills, men and women are on the same page with one-quarter planning to use their cash rewards earned from holiday shopping as a credit on their statement to offset holiday expenses.

The hustle and bustle of holiday travel is the ideal time to take advantage of rewards, but more than a quarter of those who tried to redeem rewards for travel were unable to do so with blackout dates to blame. With 24 percent of respondents still undecided as to whether they’ll plan to travel this holiday season, these blackout dates as well as rewards restrictions may prevent their last minute travel. In fact, more than half would consider traveling during peak holiday periods (e.g. within 1-2 days of Thanksgiving, Christmas and New Years), if guaranteed to be able to use rewards for their trip. Interestingly, nearly 80 percent of respondents haven’t even tried to redeem for holiday travel this year, with many saying that they thought it was too much of a hassle (28 percent) or they didn’t have enough time to plan (29 percent).

Additional trends stemming from the Rewards Barometer this quarter include:

  • Since 2011, the top three credit card rewards have been cash, gift cards and domestic airline tickets.
  • Since the spring of 2012, 40 percent of rewards card holders consistently reported they prefer a simple rewards card offering the same rate across all purchases.
  • Approximately one-third of consumers remain unaware if they are charged a fee or additional expenses when using rewards to book travel.
  • Over the last year, approximately half of rewards card holders remain unaware that they may be charged foreign transaction fees for purchases made while traveling abroad.
  • Capital One is also reminding cardholders that they can Book Now, Redeem Later. Customers can retroactively redeem rewards online and on your Smartphone within 90 days of your travel purchase with Purchase Eraser.

More about Purchase Eraser here:

Original document from The Wise Marketer.

Is loyalty a missed marketing opportunity for mid-sized retailers?

By Mark Croxton, managing director, UK&I, Aldata

Organisations have been taking advantage of loyalty schemes ever since the Co-operative (or the ‘Rochdale Pioneers Society’ as it was known then) launched its dividends scheme in 1844. The most notable loyalty system today is probably the Tesco Clubcard, started in the mid 90’s by Grant Harrison and Dunnhumby. Schemes continue to evolve, with Debenhams recently announcing a loyalty system using an iPhone app, helping the brand to interact directly with customers via their phone handsets.

According to the Journal of Retailing and Consumer Services, it is recognised that when loyalty scheme members are happy with the benefits of a programme, they will be less fussy about in-store prices, and more likely to return to the store and provide repeat business .

However, these days consumers are targeted with a variety of cards, vouchers, offers, membership deals and subscription-only loyalty schemes. Many of these soon become ineffective as consumers sign up to gain the benefits, but simply receive mass-mailed marketing and general, non-specific promotions.

A problem of size?

Although many loyalty programmes do function well, there is a perception that these are only run by large companies; smaller organisations are limited to ‘cards to get stamped’ to get a free beverage, for example. Indeed, many mid-sized retailers have hesitated over getting into loyalty because of the perceived barriers to entry. Many retailers believe that loyalty systems, with their complex tracking and prediction algorithms, are both difficult and expensive to implement.

But let us take a step back for a moment. There are many mid-sized organisations which are better suited to loyalty schemes by virtue of their specialism or the nature of their services. Small hotel chains, for example, are in regular physical contact with their customers, presenting a strong opportunity for a bespoke scheme and tailored communications. They also gather a wealth of data via bookings systems, which they could potentially feed into loyalty systems, providing customers with offers which exactly suit their requirements – or offer them new opportunities, encouraging new visits and building up the store relationship with the customer.

Loyalty schemes can certainly help these mid-sized players compete with their larger rivals andengage with existing customers. A tailored experience and custom-fit offers can go a long way to make customers return to the store again and again. It also offers a way of testing new products and services with existing loyal customers, or cross- and up-selling. Tesco’s Clubcard, for example, makes no secret that although most of the discount vouchers sent out are for already-purchased items, two out of every six are for items related to existing purchases, expanding sales opportunities.

A new wave of accessible loyalty

As we have said, many small retailers and organisations believe loyalty systems to be inaccessible because of the cost barriers. However, this is far from the truth – with the latest wave of ‘Software as a Service’ offerings, companies can purchase ‘pay as you go’ access to loyalty solution, based on a rental, rather than purchase model, eliminating many of the costly outgoings.

Indeed, Finlandia (a chain of boutique independent hotels in Finland) is using a highly effective loyalty programme, and pays for its loyalty software based on the number of customer sign-ups to the scheme. Finlandia also charges customers €26 for its loyalty card for three years, so the procedure is quite painless from a budgetary point of view.

Once organisations do overcome the perceived barriers, loyalty schemes not only increase customer ‘stickiness’ but also enable organisations to engage with customers, improving brand experience both in-store and out. It can also act as a catalyst for business and a safety net in adverse times.

Today’s need for loyalty

To put this in context, customers included in Finlandia’s loyalty scheme currently account for 5-25% of turnover. During the downturn, overall sales dipped by 20%, but sales from customers in the loyalty scheme only dropped 10%, clearly showing the value of such a scheme properly executed.

Although retailers can hesitate over loyalty schemes, mid-sized retailers should not flinch from the opportunities which they can present. In fact, with many of the issues now a question of perception, rather than of fact, and with a loyal customer often making the difference between a lean year and a good year, now is certainly the time to get involved.

Original post from Ulta Marketing.

Retail Loyalty Programs: Pain Killer or Vitamin?

by Jon Wurfl, Retail Solution Principal, SAP

At a time when retailers struggle to retain and attract key segments of their shopping audiences, customer loyalty management, practiced as a strategic element of their business plans, can drive sustainability and differentiation into the enterprise. One mistake many retailers make: Viewing loyalty programs as a short-term source of brand buzz to jumpstart sales and lessen the pain of the tough economic climate.

Done right, retail loyalty programs can indeed “bring people back to the brand.” A successfully delivered loyalty program has immediate benefits to a retailer’s top line. In this economy we’ve witnessed  shoppers switch to every-day low prices in a dash to get economic benefits as soon as possible. But loyalty, if delivered successfully over a period of a time (at least four or five consecutive quarters), can go from painkiller to vitamin. If you put in the time and effort to develop a well-thought-out loyalty program that truly engages with customers on their terms, the program will pay dividends that go far beyond just a quick hit of interest.  Our studies show retailers have the opportunity to drive the top line of their revenue by 20 to 25% annually thanks to a well-executed loyalty program.

To keep receiving the benefits of this organizational “vitamin,” however, you have to keep at it, keep working on your loyalty program, constantly refining the benefits, engaging regularly with your shoppers  to understand their wants and needs. Many programs I have seen don’t offer rewards that are truly in line with what members want. It is especially important for you to have “wow” perks for your most valuable customers – tickets to a home basketball game, for example, when you know the member is a fan.  To feel understood is thrilling for anyone, especially customers.

You can also give special access as a benefit for program members. For example, a book retailer could provide the first chapter of a popular author’s new book to his devoted fans. This creates a sense of entitlement as an insider, which can be even more potent than the perk itself. In this example, it costs the book store practically nothing to provide access to a download of the chapter, while being granted that access means a lot to customers who are fans of that author.

The point here is that once you start “doing” loyalty you must keep innovating your loyalty program over time as opposed to going backwards. Your customers are ever changing, and your program has to evolve along with them. If you can maintain your focus on the customer –  and your loyalty program reflects that focus – you can help give your organization the health-giving vitamin it needs to sustain growth.

Original document from SAP Community Network.

How Red Letter Days strengthened its affiliate programme

Background

Gift experience retailer Red Letter Days has been running an affiliate programme for five years. The affiliate channel has been a major focus for the organisation over the past few years and significant effort has been invested in growing this channel. In 2008 the programme was expanded to a second network, thereby increasing the overall presence of the Red Letter Days brand across the affiliate industry as a whole.

For Red Letter Days one of the main aims was to focus on consolidating affiliate relationships, and to continue to motivate affiliates to promote the Red Letter Days programme by engaging with them on an individual basis. The overall objective was to increase affiliate sales turnover by 15% in 2010.

Strategy

In the last few years Red Letter Days has seen its affiliate programme go from strength to strength; from a channel that only contributed 12% of total online sales, it has grown to a programme that now accounts for 30% of all its online sales.

Red Letter Days felt it was important not to neglect the foundation their success had been built on, or the affiliates who helped them achieve this. So its strategy focused on forging closer than ever relationships with its affiliate partners – both by getting out to meet them in face-to-face meetings and by building on its already thriving its incentive scheme to encourage greater than ever affiliate activity.

Implementation

In 2010 Red Letter Days hosted its first official affiliate day. The day was designed to bring Red Letter Days closer to their affiliates and to give them a chance to get closer to the brand by trying out some of the experiences offered by Red Letter Days.

It also set out to meet as many affiliate partners throughout the year. These were not necessarily the top performers but affiliates that Red Letter Days had considered significant contributors to their success. Meeting their affiliates would give the retailer a better understanding the challenges they faced and find out what could be done to improve the performance of their programme.

Red Letter Days had already been running a quarterly incentive scheme since 2009, giving affiliates the opportunity to push themselves through sales tiers to receive their desired prize. As the quarterly incentive scheme had been running for a couple of years, Red Letter Days had to ensure that it had an even more attractive proposal for their main Q4 Christmas campaign.

For Q4 2010, Red Letter Days offered affiliates the chance to win a trip to South Africa. The holiday was determined by a prize draw, but with a twist. Affiliates earned tickets into the draw in return for fulfilling certain criteria e.g. uploading a particular type of creative, or selling a particular product, rather than the traditional model of rewarding revenue generation alone.

Red Letter Days announced new ways to earn extra tickets into the draw on a weekly basis from October to December, to keeping affiliates continually engaged with the Christmas campaign. The winner was announced on YouTube in the form of a video showing the final draw.

Meanwhile Red Letter Days also honed its voucher code offering. The use of voucher codes has always been an issue at the forefront of the affiliate industry. Red Letter Days tackled this by developing a solution that displayed or hid the basket promo code box based on the type of referring affiliate. This ensured that customers driven from non-voucher code sites would not see the box (and therefore not be prompted to search for a voucher code), whereas visitors from a voucher code site would see the box.

The next stage of this development incorporated the embedding of a “deal id” in the inbound URL, allowing Red Letter Days to create bespoke deals for individual affiliates. The “deal id” was associated with the affiliate id therefore making it impossible for another affiliate to replicate the offer. Deals can only be obtained by clicking through from the relevant affiliate site, therefore giving the affiliate’s customer a higher call to action and ensuring that the customer returns to the affiliate site to activate the deal; creating stickiness and loyalty.

Results

Through strong communication and close partnerships the Red Letter Days programme continues to grow; the number of active affiliates contributing to this success has increased by 300%.

Between 2009 and 2010 online sales through the affiliate channel grew by 20%. In 2010 the average affiliate basket size grew by 20%, from £90 to £108. URL based deals has driven an increase of 212% in traffic and 68% in revenue from content sites.

Original document from Ulta Marketing.

Borders Bankruptcy: Is Loyalty Too Late?

by Phaedra Hise

Borders has released its plan for reorganization under Chapter 11 protection, and it singles out the company’s loyalty program as a key factor to success. But although we love loyalty, at this point it’s probably smarter for the company to focus on other business operations – the plan submitted by CFO Scott Henry includes store shutdowns of 30% and an infusion of $505 million from GE Capital for the unprofitable company.

On one hand, props to Borders for focusing on their loyal customers, who they need now more than ever. The Borders Rewards Plus program was redesigned and relaunched in the fall of 2010 after extensive customer research, and it incorporated both free and paid enrollment options. Borders hoped that choice would differentiate it from competing bookstore programs. As bankruptcy neared employees reported that they were encouraged to sign up increasing numbers of customers for the program.

On the other, strengthening Borders Rewards Plus didn’t resuscitate the company then, and it isn’t likely to now. There are two marketplace situations in which a loyalty program doesn’t really help – when you offer a superior product or service advantage, or when your company is in a dying industry. As a bookseller, Borders could fall into the second category unless it transitions successfully into the digital age. Once they’ve managed that, loyalty is a sensible next step.

Original document from Customer Think.

Power to the Program

How GameStop’s recently launched PowerUp Rewards powered up to 6 million members in just a few months
by Jenn McMillen and Mike Hogan

You’ve seen the media reports of the excitement generated when a sequel to a hot video game is released. Lines of avid players waiting for the newest Medal of Honor, the latest Halo, the introduction of Fallout New Vegas—some dressed in costumes inspired by the games themselves. At GameStop, we’re accustomed to this kind of behavior, but we were shocked by one fan lineup we encountered when we opened up one of our stores in September of last year. The avid fans weren’t there for the latest role-playing game, the hottest first-person shooter, or a long-awaited real-time strategy game.

They’d come for our-brand new loyalty program.

The size of the lines of customers waiting to be the first to sign up for our September launch of PowerUp Rewards (without any advance advertising) was astounding, and the continuing response has significantly exceeded our expectations—and our expectations were fairly aggressive. By the beginning of 2011, after the launch had rolled out to all our stores by mid-October, we exceeded six million members, many of whom have chosen a more benefits-packed $14.99 annual membership called PowerUp Rewards Pro. We’re also getting quite a bit of positive qualitative feedback from customers and our field teams, another key metric for evaluating our program’s success.

PowerUp Rewards in some senses employs the same game design principles as the games we sell. Player actions lead to a succession of rewards, perks, and bragging rights. Players track their progress, and work toward victory. It’s not a competition, per se, but it combines the passion of achievement with fun.

End game
Achieving this level of success, of course, is never as easy as it looks. GameStop has grown from a regional specialty player to the number-one national brand in our space. Like all companies, we have faced a number of challenges—and the new rewards program was a key element in our strategy for overcoming them. Among our goals:

  • Increase our share of wallet by increasing purchase frequency and by shifting purchase behavior to higher-margin products. In a nutshell, our goal was simple: If we could shift just one title per year away from our competition in just one of our consumer segments, we would add a big number to the top line. We also wanted to increase frequency of trade-ins. We’re fortunate to have a robust used-game model, in which we take games in trade for cash or for store credit that then can be spent on new games. We call it the “Circle of Life.”
  • Collect data on our customers and then use it effectively. Like many retailers, we hadn’t done enough to get to know our customers and offer relevant communications. Though our customers love coming to our stores, we lacked the systems to gather meaningful information about those customers—who they are and what games they like to play—so we could talk to them specifically about those elements in-store and through other channels.
  • Increase customer focus. We simply weren’t as customer-centric as we needed to be, which was particularly frustrating because our audience is very, very vocal. They want to be asked their opinion. In our space, if you don’t engage your customers—and engage them through a channel you maintain—they will post on other sites and blogs, and you may not like what you hear.

 

Original document from Colloquy.

Tesco adds online Clubcard services for its member

According to an article in Retail Week and according to the Tesco website, Tesco’s loyalty program, Clubcard soft launched online and customers are subscribing to receive regular marketing communication via email.

Tesco’s member website also states that by signing up between January 31 and February 28, 2011, members are entered into a prize drawing for jewelry and Clubcard points.

“A spokeswoman said the customer response “has been good so far and we’re seeing more customers making use of it”. She said My Clubcard would be added to later this year to give more services and increase shopping flexibility.”

Original document from Colloquy.