Retailers Look For Loyalty On The Go

As the old adage goes the more things change the more they stay the same. If you look around right now, you’ll notice a new emphasis being placed on brand loyalty programs. These programs are nothing new, but suddenly, marketers are using them to make informed decisions about their most loyal customers.

As just one example, the drugstore chain CVS aggressively promotes its “ExtraCare” card as a way to earn extra bucks for regularly shopping at CVS. It’s more than just random points in a reward program, though. CVS uses purchase data from scanned products the ExtraCare customer buys and then customizes offers that print out on the customer’s sales receipt. Purchase shaving cream, for example, and you may find a $2 off coupon for razors on your receipt. Some customers may think they hit the jackpot when the store’s inkjet printer spits out a lengthy scroll of special offers.

Now CVS is installing kiosks in stores where customers can scan their own ExtraCare card and get instant coupons, without even going up to the register. It’s all part of a program with more than 50 million customers that gives CVS the ability to target offers to specific buying patterns.

Other retailers have similar programs, and they are pushing them via in-store and online promotions. The reason is simple: retailers are willing to pay you for your loyalty. They know that you could shop at a competitor’s store. If they reward you, the theory goes, you’ll keep coming back. Loyal customers are a retailer’s lifeblood.

The problem is, customers get more fickle in a down economy. So that’s why retailers and consumer goods marketers are upping the ante. Online promotions are playing a prominent role in brand loyalty these days. In fact, social networking is tailor made for loyalty programs. Brand loyalists don’t hesitate to tell friends about positive brand experiences, passing along information about customer appreciation events, exclusive sales, and coupons and rebates.

The area that shows the most promise for brand loyalty right now is, you guessed it, mobile marketing. The New York Times recently reported that retailers like Macy’s, chains like Starbucks, and brands like Pepsi are using smartphones to get real-time information about customers. They use this information to then offer customers an incentive to purchase a particular product, the moment they enter a store. It brings a whole new meaning to the impulse buy.

As Stephanie Clifford writes in The New York Times:

“A phone is a simple replacement for a wallet stuffed with loyalty cards, but the real appeal for stores is in the location information provided by Foursquare and other location-based applications. Retailers can track when customers actually enter their stores. Such data can be used to learn things about store traffic, such as when men visits versus women. And it’s easier to note when the most loyal customers visit.”

Clifford says that Pepsi’s new partnership with Foursquare allows the marketer to receive a live notification when customers who are part of its loyalty program are physically near a grocery store, gas station or restaurant. Pepsi can then “present offers that get them into the stores.” Just as important, says Pepsi, “It gives us immediate feedback for what’s going on in the marketplace.”

Location-based mobile marketing can present marketers with a very powerful and sophisticated tool. B. Bonin Bough, PepsiCo’s Director of Digital and Social Media, told Clifford:

“If you check into work, then you leave work, you check into a bank and then you check into a store, that’s a behavior that, in aggregate, we might use to transform the way we market to you in the offline world. We might see dayparts that are more likely for you to check out of some place and go to the store, and we might do advertising during that specific daypart in that specific place.”

Indeed, location-based mobile marketing may fulfill the dream of one-to-one marketing on the go – but marketers better be sure that offers consumers get on their phones is something they embrace rather than reject.

About Barry Silverstein

Barry Silverstein is a freelance writer/marketing consultant. In addition to writing for ReveNews, he is a contributing writer to Brandchannel.com, the world’s leading online branding forum. He is the author of three marketing books, The Breakaway Brand (co-author, McGraw-Hill, 2005), Business-to-Business Internet Marketing (Maximum Press, 2003) and Internet Marketing for Technology Companies (Maximum Press, 2003). Barry ran his own Internet and direct marketing agency for twenty years. You can find Barry on Twitter @bdsilv.

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