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Breaking Through the Noise: Cornerstones to Loyalty Program Success

BY CSA STAFF

By Mark Friedman, mfriedman@soundbite.com

Imagine a world where consumers collectively gathered $16 billion and flushed it down the drain – when every penny could have easily flown into retailers’ cash drawers?

According to a recent COLLOQUY study, we’re reached that point. Consumers left $16 billion in unclaimed loyalty points last year, ignoring the perks, discounts and special offers they are entitled to as loyal program members. Retailers invested millions in loyalty programs that were golden money-makers just a few years ago, with almost nothing to show for it today. This trend is killing profit margins and retailers are growing agitated about the lost sales opportunities.

So what gives? First and foremost, consumers are inundated with loyalty program offers from retailers of all kinds, whether big-boxers, regional chains or supermarkets. According to Colloquy’s 2011 US Loyalty Census, the average US household is enrolled in 18 loyalty programs – a 16% increase over two years. It’s a safe bet each of these retailers are using direct mail, email, phone calls, text messaging and social media to communicate their latest deals, and convey why they’re better than the other retailer.

Consumers are overwhelmed; in many cases not even aware how they’ll benefit from each program. When they do take notice of the offers, they often lack the time to determine which ones to act on. Retailers must address the critical question of how to break through this market noise and fierce competition to get consumers’ paying attention and buying.

Here are five cornerstones to get started on the path to a more successful loyalty program:

1. Expand your reach: Retailers who adapt to rapid changes in the consumer communications landscape will experience the most responsiveness and success. Text messaging and mobile communications are highly underutilized, yet popular among consumers. Relying more on these channels, instead of traditional communications – such as fliers or pamphlets – will provide an invaluable head start over competitors.

2. Ditch the cookie-cutter approach: Yet, don’t abuse the growing communications spectrum, bombarding every consumer with every type of communication imaginable. While more consumers prefer to receive information via mobile phone calls, text messages or emails, they likely don’t want it all. One unwanted message is all it takes to turn a customer away. Be smart – use a multichannel communications approach mapped to each customer’s habits and preferences.

3. Live by customer preferences: Building loyalty starts with making customers feel valued, and you can’t achieve that without personalized communications. Take a page from newspaper reporting – employ the five W’s (who, what, when, where and why). Ask and observe how each consumer prefers to receive their loyalty program information – and most importantly, act on it. Enrollment periods, anniversaries or renewals – when customers are actually the most prone to be active – are the perfect time to collect this information.

4. Be interactive: Always remember engagement is a two-way street. Retailers should initiate multi-channel blending, giving consumers more options to engage with businesses the way they’d like to. For instance, send a text message confirming a loyalty reward status or communicating a redemption offer, giving the customer the option to respond through several channels, text message, website or phone. This makes them feel like they are a one-of-a-kind customer, and provides you with valuable insight into their behavior.

5. Embrace change: Actions speak louder than words, especially with preferences. A customer may state how they prefer to receive information, but their actions may indicate otherwise, or that preference may change over time. To stay ahead of this shifting demand, keep asking customers their preferences on a regular basis and give them choices for how they can respond.

Mark Friedman is chief marketing and business development officer at SoundBite Communications, Inc., a provider of cloud-based, multichannel proactive customer communications, including loyalty reward programssolutions. He can be reached at mfriedman@soundbite.com.

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Office Depot ahead in green building competition

BY CSA STAFF

BOCA RATON, Fla.— Office Depot announced that Office Depot stores hold the top three spots for retail energy efficiency gains at the midpoint of the U.S. Environmental Protection Agency’s (EPA) Energy Star National Building Competition.

The EPA has marked the midpoint of the 2011 Energy Star National Building Competition: Battle of the Buildings by releasing a list of top contenders for each building category, as well as the progress of all competitors. The Office Depot store located at 909 N. Central Expressway in Plano, Texas was named the top contender in the retail category, leading all other buildings in this category with a 17% energy reduction at the midpoint in the competition.

Office Depot also holds the number two and three positions in the retail category, with stores in Raleigh and Tallahassee achieving 15% and 13% reductions respectively.

The Energy Star National Building Competition puts teams from 245 buildings around the country head-to-head to see who canreduce their energy use the most. In the first six months of the competition alone, the competitors collectively have saved more than $3.7 million on utility bills and reduced greenhouse gas emissions equal to the electricity used by 2,300 homes annually.

“Thanks to the commitment and creativity of our team here at Office Depot, we have made great progress in saving energy and cutting our utility bills as part of EPA’s Energy Star National Building Competition,” said Edward Costa, VP construction for Office Depot. “We’ve received strong support from EPA’s Energy Star program and look forward to even greater success in the remaining months of the competition.”

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Remembering Jack Buley

BY Katherine Boccaccio

On March 22, 2011, Canadian retailer tb!s The Bargain Shop named top American retail executive Beryl “Jack” Buley as its new president and CEO. A week later, on March 29, I sat down with Buley to discuss his new position for our then-upcoming June/July issue. Eight weeks later, he was dead.

Why, after almost five months, am I now writing about this, you ask? Because I just found out. The news of Buley’s tragic death wasn’t publicized. In fact, our June/July 2011 feature story – on page 20 – came out as planned, and we had no idea that he had already been laid to rest weeks before the publication was mailed.

It somehow seems remiss not to relate a little of what I know about Jack Buley. He was an American retail star, having served 16 years with Kohl’s Corp. – most recently as executive VP of stores – and then as division president of Dollar General Corp. before being lured north to realize his CEO dream at The Bargain Shop in Mississauga, Ontario, Canada.

The 238-store Canadian discounter was lucky to get Buley. They felt sure that he would do for them what he did for Dollar General, which was to elevate the retail experience. He likely would have, if he had had the chance. On May 22, 2011, on his 50th birthday, he died in a car accident in Franklin, Tenn., leaving behind his wife Cathy and three children.

He never was able to effect long-term change at The Bargain Shop. But I feel certain that his presence lingers on. Even after just one hour with him, I realized him to be one of those larger-than-life guys who would light up a room and take a bull by the horns. He talked to me about growing up in Oklahoma, about working for his dad, about his participative style of leadership. He said he would never ask someone to do something in a store that he hadn’t done himself.

Retail needs more leaders like Buley. And now there is one less. For that, I am truly saddened.

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