‘In­cen­tive’ Be­gins With ‘I’

Per­son­al­iza­tion, re­spect­ing data are key to driv­ing loy­alty pro­gram mem­ber­ships.

Progressive Grocer (India) - - Contents - By Randy Hof­bauer

Loy­alty pro­grams have long been a ma­jor strat­egy in draw­ing con­sumers to one re­tailer rather than an­other. How­ever, while growth of loy­alty pro­gram mem­ber­ship has con­tin­ued — reach­ing 3.8 bil­lion — this year’s edi­tion of Col­lo­quy’s Loy­alty Cen­sus shows that it has dropped 11 points, to 15 per­cent, since the 2015 edi­tion. Gro­cery pro­gram mem­ber­ships have con­trib­uted to this, drop­ping to 142 mil­lion, from 88 mil­lion in 2015.

While the find­ings, pre­sented by Toronto-based loy­alty pro­gram and an­a­lyt­ics firm Loy­al­ty­one, show that the 24 per­cent de­crease in gro­cery pro­gram mem­ber­ships is due, in part, to many merg­ers and ac­qui­si­tions in the sec­tor, it also re­veals a need for gro­cers to con­tinue to of­fer en­tic­ing rea­sons for con­sumers to be­come mem­bers.

For gro­cers in 2017, per­son­al­ized in­cen­tives — dig­i­tal of­fers and deals, rel­e­vant dig­i­tal ads — are a pow­er­ful way to ap­peal to shop­pers, drive sales and build loy­alty, says Mir Aamir, pres­i­dent and CEO of Moun­tain View, Calif.-based dig­i­tal pro­mo­tions provider Quo­tient.

“The rea­son is sim­ple: Shop­pers love dig­i­tal of­fers and deals, ei­ther in the form of dis­counts on prod­ucts they buy, or in terms of re­wards like points, if a re­tailer has such a pro­gram,” Aamir notes. “The key is to make all such in­cen­tives rel­e­vant and easy to use. If a deal or of­fer is per­son­al­ized, shop­pers love it. In fact, shop­pers have come to ex­pect per­son­al­iza­tion.”

Per­son­al­iza­tion Tips

Gro­cers have a num­ber of ways to per­son­al­ize pro­grams, and dif­fer­ent de­mo­graph­ics have dif­fer­ent ways that they want to en­joy in­cen­tives. Some of the ways gro­cers could bet­ter per­son­al­ize loy­alty pro­gram in­cen­tives to cus­tomers in­clude:

Cre­at­ing ease of par­tic­i­pa­tion: It should be easy to take part and sim­ple to re­deem, says Therese Mcen­dree, VP of mar­ket­ing with Hawk In­cen­tives, a sub­sidiary of Pleasan­ton, Calif.-based Black­hawk Net­work Hold­ings. Also, the ben­e­fits must be clearly and con­sis­tently com­mu­ni­cated. One gro­cer that does this is Food City, a sub­sidiary of Abing­don, Va.-based K-VA-T Food Stores that re­wards shop­pers based on the amount they spend at its stores, ac­cord­ing to David Bishop, part­ner with Bar­ring­ton, Ill.-based re­tail con­sul­tancy Brick Meets Click. Cus­tomers at the gro­cer earn a 5 per­cent-off re­ward that they can use on fu­ture pur­chases af­ter spend­ing $300 at the re­tailer. Bishop notes that the pro­gram is per­son­al­ized to shop­pers by way of spend­ing pat­terns af­fect­ing how quickly the re­ward is earned.

Link­ing loy­alty cards to on­line shop­ping: Strong value comes from en­hanc­ing both the in-store and on­line shop­ping ex­pe­ri­ences with proper per­son­al­ized in­cen­tives, David Bishop ob­serves. West Sacra­mento, Calif.-based Ra­ley’s does this by al­low­ing shop­pers to build on­line carts and lists based not only on past on­line pur­chases, but also past in-store ones. Do­ing so has re­moved fric­tion and en­abled a more seam­less and con­tin­u­ous ex­pe­ri­ence with the gro­cer.

Of­fer­ing va­ri­ety: Con­sumers to­day want to choose their re­ward and how it’s de­liv­ered, whether loy­alty points, a phys­i­cal gift card, emailed pro­mo­tions, re­bates, or even a re­ward trans­ferred to a mo­bile wal­let, Mcen­dree says. While con­sumer pref­er­ence varies widely by ap­pli­ca­tion, value and de­mo­graphic, of­fer­ing the right re­ward op­tions for each cre­ates added op­por­tu­ni­ties for pos­i­tive brand en­gage­ment, bounce­back and con­tin­ued en­gage­ment.

Pro­vid­ing rapid re­wards: Ac­cord­ing to re­search from Hawk In­cen­tives, re­spon­dents ide­ally want their re­ward de­liv­ered in less than a week.

If a deal or of­fer is per­son­al­ized, shop­pers love it. In fact, shop­pers have come to ex­pect per­son­al­iza­tion. — Mir Aamir Quo­tient

In­no­va­tions in tech­nol­ogy now of­fer near-in­stant re­wards, al­low­ing shop­pers to re­deem eas­ily, some­times with as lit­tle as a few swipes on a mo­bile de­vice, Mcen­dree stresses.

A Prob­lem of Trust

The prob­lem re­mains, though, that many con­sumers to­day de­sire pri­vacy and are tempted to with­hold their data. Bill Bishop, chief ar­chi­tect at Brick Meets Click, notes that while his firm doesn’t have an es­ti­mate of the per­cent­age of shop­pers with that con­cern, some things they’ll do in­clude pro­vid­ing the re­tailer with in­com­plete or er­ro­neous con­tact in­for­ma­tion to make con­nect­ing ev­ery­thing dif­fi­cult.

“With­hold­ing in­for­ma­tion that can help tar­get of­fers more ef­fec­tively does make the re­tailer’s job more chal­leng­ing and com­plex,” David Bishop adds. “Min­ing past pur­chases could re­veal some of th­ese at­tributes; how­ever, this isn’t fail-safe, as house­holds are buy­ing gro­ceries across mul­ti­ple re­tail­ers.”

Bill Bishop notes that most re­tail­ers have pledged not to share in­for­ma­tion they col­lect with oth­ers, and that up un­til this point, many cus­tomers have been sat­is­fied with that. How­ever, with data breaches and other calami­ties caus­ing con­cern in re­cent years, cus­tomers’ re­luc­tance could be­come more of an is­sue.

One way that gro­cers can bal­ance their need for data with their cus­tomers’ de­sire to keep data to them­selves is to ap­ply sim­i­lar ap­proaches used by dig­i­tal mar­keters. For ex­am­ple, David Bishop points to ads served on the in­ter­net, driven by so­phis­ti­cated, rules-based al­go­rithms, which cap­ture and sort through many at­tributes based on past search ac­tiv­ity.

“This col­lec­tive in­for­ma­tion cre­ates thou­sands of mi­cro-seg­ments that help de­ter­mine what deals get served up in each in­di­vid­ual case,” he says. “Us­ing a sim­i­lar frame­work, gro­cers can de­velop var­i­ous seg­men­ta­tion, us­ing past pur­chases, to cre­ate tar­get­ing seg­men­ta­tion like house­holds with kids, health nuts, cheese en­thu­si­asts, etc.”

Rel­e­vance Re­moves Re­luc­tance

But from her ex­pe­ri­ence, Kate Ho­gen­son, strate­gic loy­alty con­sul­tant with St. Peters­burg, Fla.-based Ko­bie Mar­ket­ing, notes that shop­pers are will­ing to give up their per­sonal data if they get some­thing worth­while in re­turn, like a dis­count, coupon, or loy­alty points re­deemable for free prod­ucts or dis­counts. The les­son is sim­ple: Give first to get some­thing. This is espe­cially the case when the data de­sired from cus­tomers could help them avoid prod­ucts they don’t want. For in­stance, Ch­eryl Black, CEO of You Tech­nol­ogy, a Bris­bane, Calif.-based provider of dig­i­tal-of­fer plat­forms, notes that Phoenix-based Sprouts Farm­ers Mar­ket gath­ers data on food in­ter­ests in re­gard to di­etary re­quire­ments such as gluten-free, dairy-free and ve­gan. The re­tailer re­wards cus­tomers for shar­ing this in­for­ma­tion by pre­sent­ing them with of­fers for dis­counts on prod­ucts in th­ese ar­eas.

“We see very high pen­e­tra­tion of loy­alty card us­age when the re­tailer re­spects the shop­per’s data and makes their life eas­ier and bet­ter,” Black says.

Still, no mat­ter how data are used and what in­cen­tives are of­fered, it all must come down to us­ing the in­for­ma­tion to of­fer sav­ings, ease and con­ve­nience, Black em­pha­sizes. Gro­cers must be sure that if they pro­mote any­thing via in­cen­tives, that they not do it with things a shop­per isn’t in­ter­ested in. Re­tail­ers must be trans­par­ent about any pro­mo­tions and turn them into sav­ings, ease and con­ve­nience for the shop­per.

“It is much bet­ter to keep a loyal cus­tomer re­turn­ing each week than to have them add one more item to a bas­ket on a given week and stop shop­ping your stores as fre­quently,” she says. “Shop­pers will re­spect a ‘fair ex­change’ and will give a lit­tle data to make their life bet­ter. But they must never feel taken ad­van­tage of.”

We see very high pen­e­tra­tion of loy­alty card us­age when the re­tailer re­spects the shop­per’s data and makes their life eas­ier and bet­ter. — Ch­eryl Black You Tech­nol­ogy

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.