"So many coffee loyalty cards" - by Nick Webb on Flickr
Over the Labor Day weekend I went to a retail store with my daughter for some supplemental back-to-school shopping. I have a loyalty card with this retailer, and had received an email from them the week before, promoting the fact that members would get great discounts on the Sunday of Labor Day weekend, and those discounts would extend to the general public on Monday. We went on Sunday, the store was much busier than usual, we found some good stuff, and at checkout, once the cashier had scanned all our items, I offered my membership card. "It's okay, I already scanned you on the store card," he said. And indeed, my total reflected the promised discounts.
It was a quick and easy transaction and I got the discounts I was looking for when I came to the store. So why did it bother me so much? (Especially since I take the store-card swipe for granted at nearly every grocery store I visit - I stopped signing up for grocery memberships years ago because cashiers will scan their card if you don't have yours nearly 100% of the time. These days they do it without even asking whether or not you even have your own.)
I think this one stood out because they'd sent me an email promising a different experience for members vs. non-members, and I actually paid attention to it. They got me into the store with targeted digital marketing, and they made a sale. But they'll never be able to know they were successful! Here's why that stress-free transaction has been keeping me up at night ever since (OK, not actually keeping me up at night. Well, maybe just a little):
- They lost the opportunity to offer to onboard every non-card-holding shopper into the loyalty program. "Did you know that members get a big discount today?" It's not a risk like a store credit card; it's just a no-fee loyalty program - how many people would have signed up that day if they had understood the discount, and had been asked to? (I realize the store probably considered it too busy to add an extra step to checkout; but wouldn't an email address suffice, as it does for online signups?) I had noticed that the member discount wasn't advertised anywhere in the store - another missed opportunity to interest shoppers in the membership.
- They LOST ALL THE DATA ABOUT THAT SALE. If the whole point of a loyalty card program is to know customers in depth so that you can tailor your marketing strategy, how could you not even ask to swipe my card? Or swipe it once I'm offering it to you? Doesn't that cashier know how expensive loyalty card programs are? Did the local store management decide that the high volume that day meant a better experience would result from just swiping the store card for everyone? Did this happen nationwide? (It is killing me to think of the team responsible for the email campaign receiving the data from that day with store accounts associated to all or most of the transactions.)
- Least important, but still a factor: Psychologically, that store-card swipe said to me, you are no different than the hordes of deal-crazy shoppers in here today. Everyone will be treated equally, member or not. (Lizard-brain translation: YOU ARE NOT SPECIAL. Lizard-brain reaction: So why do I even have this card?)
Driving away from the store, I discussed these concerns with my daughter. I wanted her to understand the big implications to the store's data collection strategy, not just today but going forward. She played Candy Crush on my phone while half-listening to me. This is why a blog is a good thing.
Readers, do you have tales of loyalty card data-collection fails? Or store policies that directly oppose the goals of the loyalty program? I would love to hear them!
Boston Consulting Group: Leveraging the Loyalty Margin: Rewards Programs That Work
Fast Company: When Loyalty Programs Are A Waste Of Money