Burn Your Loyalty Card!
The New York Times recently noted one of the most positive developments for loyalty marketers since platinum stopped being merely a precious metal and became an aspirational adjective. In “Cellphone in New Role: Loyalty Card”, author Claire Cain Miller reports consumers “are increasingly using their cellphones to track their visits and purchases, and receive rewards.” (http://www.nytimes.com/2010/06/01/technology/01loopt.html)
Folks, this is very, very good news, and I don’t just mean for consumers who are going to earn more double decaf skim lattes. The loyalty mechanism cellphones are replacing is, for the most part, punchcards – the buy 10, get one free slips of paper which entirely too many retailers still think of when they consider loyalty marketing.
Hopefully the ubiquity of cellphones will open loyalty marketing with a data collection element up to smaller retailers. Grocery chains and large-scale retailers have largely realized the value of linking transactions to consumers, but among smaller chains and one-off stores, the punchcard perseveres.
Punchcards are the coward’s entry into loyalty marketing. They collect no customer data. They do not provide evidence that customers have increased transaction value or purchase frequency. At their most innocuous, they are a vehicle for retailers to blindly give away a fair amount of product.
But their use is not innocuous. First, in some cases they deter purchases – such as when the punchcard isn’t in the consumer’s wallet, and the consumer decides to hold off making an impulse purchase because “it won’t count”.
Second, given the increasing ubiquity of data-gathering loyalty programs among larger retailers, smaller marketers are the next targets for the systems and analytics capabilities that could genuinely benefit them. But anyone trying to sell such systems to this audience must overcome not only unfamiliarity, but the negative residue of the initial, unsatisfying punchcard-driven attempts.
It’s a lot less likely that a consumer will be without a cellphone than a specific card from one of a dozen loyalty programs he belongs to. And a cellphone as a loyalty program driver demands a certain amount of electronic investment on the part of a retailer.
If the cellphone truly becomes a ubiquitous mechanism for loyalty schemes, increased small retailer sophistication will follow. And that will benefit every link in the loyalty marketing chain – consumer, retailer and marketing services vendor.
In the meantime, those in the marketing community with a taste for direct action (or perhaps who have listened to the “Hair” soundtrack more often than is healthy) have an immediate step they can take. They can determine which of their local retailers is still in the customer relationship marketing dark ages, stand outside it, and burn their loyalty cards.
June 14th, 2010 at 1:34 pm
I think the author likes the words ubiquity/ubiquitous - used 3 times in one short article.
June 14th, 2010 at 8:41 pm
Robin:
You’re correct. I should have caught that.
This is what comes of posting after staying up way too late watching reruns of the old Groucho Marx program, “Ubiquitous Your Life.”
June 15th, 2010 at 1:52 pm
Feel My Ubiquity… What ever happened to The Jesus Twins?
January 7th, 2011 at 2:13 pm
I find that the smaller retailers entering into the loyalty programs with punch cards don’t realize how easy it is to speak with their Point of Sale provider and integrate a simple card with a barcode on it to track purchases through a customer database.
The punch cards seem so out of data for today’s marketplace.