I Agree that Loyalty Should Be More About Engagement Than Acquisition

A new retail survey on Customer Loyalty programs by Colloquy had some really interesting results which merit consideration by retails and destination businesses. One of the most interesting things to me was the definition of engagement in a loyalty program, which is that people had engaged at least once in the last 12 months. As Shania Twain sang “That Don’t Impress Me Much“.

The Hospitality Business

Surely if you are looking for loyalty you want people to be involved with your business regularly, especially if you are in the retail or hospitality industry. This type of statistic reminds me a lot of newspaper and magazine publishers who have a rating based on readership, NOT the number of people who actually paid for their print publication.

Anyway, the key areas of interest to me were:

1. Supermarket Loyalty Programs were down 1% in enrolments in the last two years. That suggests saturation, habit shopping and as most people live in an area for at least 5 years, their habits won’t change much and they probably don’t have massive choice within a close vicinity.

According to RetailWire, Albertsons have dropped their loyalty card in favour of giving ‘great prices to all customers”. I wonder what that means? Could it be that like airlines they feel that the rewards weigh too heavy on their ledgers, or is price perceived as being king. Of course if others match their prices and offer loyalty rewards Albetson’s could have a problem.

2. Restaurants grew a staggering 171%. Restaurants are a segment where people are looking for value and outside of fast food, people like the recognition that comes with loyalty and if they get 1 meal in 10 free, people think that is worth going back for.

3. Department Stores are up 70%.

4. Drug Stores are up 45%

I go with engagement as the key model and if you are relying on people to pick up a card AND have it with them whenever they shop, I’d think twice, especially if you want to target younger people and men who don’t carry a tote bag to keep all their cards in.

How to engage? Have you considered mobile? What about instead of having a card, with all the costs associated with it, have a mobile application that uses GPS, has the ability to know who your customers are, when they are either near your store or at a competitor’s store (yes you can do that) and what they usually buy?