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Posts from the ‘Loyalty’ Category


Ironically, the answer to showrooming may be to get consumers to go online. Or at least, that’s what Target thinks. According to a Brandchannel article, Target partnered with Facebook to create “Cartwheel,” a website that “combines social networking and discounts in the retailer’s latest move to lure traffic to its physical stores and away from online rivals.”  The idea behind the site is for Target customers to go on the site to find deals, then when they select a deal, it is posted to the costumers Facebook. The deals are redeemed in the store; thus, the customer has to go to the store to buy the good. Personally, I’m skeptical that this site will do anything to curb showrooming. I think, for most people, a deal would have to be VERY good to motive them to go to the physical store, rather than buy something online. However, given how cheap goods are on, the discounts probably won’t compete with Amazon’s prices or convenience. I think the idea of “combining digital technology with the in-store experience to bridge those worlds” is a really good one, but I don’t think that  Cartwheel is going to be the most successful implementation of that idea. Only time will tell if something more immaginative and innovative than a coupon site that links to Facebook will come along in order to save the brick and mortar stores.


Benefits of Big Data

Excited by my email update from ShopAkira, a Chicago based store selling brands similar to that of UrbanOutfitters, I immediately started my online shopping escapade after reading about their 50% special going on that day.  After filling my cart with 3-5 items, however, my conscious began to regain control of my shopping frenzied brain.  A quick glance down at the table where a copy of last month’s bank statement lay, further pushed my conscious mind to the forefront, as I regrettably forced myself to close the ShopAkira tab.  Thank goodness…crisis avoided…or so I thought.

You can image my surprise the next morning when I opened my inbox and found another email from ShopAkira.  The email not only provided a reminder of the items in my cart but further egged me on to finish my transaction by giving me and extra 10% off if I finished making my purchases with in the next 24 hours.  Needless to say online retailer 1, broke student 0… well played big data analytics…well played indeed. 

As mentioned in Precision Marketing, companies looking to take advantage of big data need to use “relevance to retain current customers, maximize revenue potential per customer, help to acquire new customers and build long-term customer loyalty.”  Gone are the days where customer loyalty could be built on mass e-mail spams and high general awareness.  In today’s fast-past, high tech world, online retailers need to send relevant, personal messages to their target segments, in order to build any credible kind of relationship that will result in brand loyalty and increased life time customer value. 

Not only can big data help drive brand loyalty and increase customer value, but it can also help to streamline retail practices/decisions and cut costs.  I recently read an article that talked about how ModCloth, another online clothing retailer, is using big data in new ways to personalize their consumers’ shopping experience.  For instance, their “Be the Buyer” program allows customers to vote on certain products with high-ranking products tagged as “Be the Buyer Picks.”  Each “Be the Buyer” poll generates an average of 6,700 votes and helps ModCloth more accurately predict what new product items will sell or what type of product should be reduced in future inventory purchases by product buyers. 

The article can be found here:


The Value of Repeat Business

In line with what we have often discussed in class, this article discusses the additional long-term value loyal customers can provide. The article starts by saying, “Once a prospective customer becomes a buyer, it’s important for marketers not to overlook or ignore their their needs.” This reiterates what we have discussed about the need to continue serving customers post-sale and along all touch points to truly create customer value. The article also asserts that it usually takes 3-5 years for companies to reach the point that 25% of their customers are repeat customers. This demonstrates the need for long-term investment and patience in waiting to see returns – something today’s businesses are often unwilling to do. Through several infographics, the article offers tree recommendations for “providing a customer experience the customer deems worth repeating”:

  • Encourage High Initial Purchase.
  • Push for the Second Sale.
  • Invest 25% of the Marketing Budget On Returning Customers.

While I do not challenge these recommendations overall, I do draw a slight issue with one of the statements made a few times in the article – that firms should especially focus the 25% of marketing efforts that should go toward return customers on those who make larger purchases. While I undsertnad the logic – retain those customers who buy more – I argues this is a risky strategy because high disposable income customers’ loyalty is both expensive and difficult to obtain. Those who have to think less about the value of their purchases will garner less value from discounts and marketing ploys. In addition, they can afford to spend anywhere and thus do not have to make decisions between companies. As such, I suggest companies avoid investing too heavily in trying to obtain the loyalty of these customers.


Ads are the New Currency for Online TV

As online television continues to grow, competitors fight to find the most successful business model. Business strategists must straddle the line between making revenue through advertisements and maintaining customer satisfaction. Advertisements interrupt consumer streaming which can detract from the value of the experience, but new competitor has entered the market. Using advertisements to the consumers’ advantage, HitBliss allows consumers to choose which advertisements they would like to view in exchange for film and television content. Though other competitors allow consumers to pick advertisement, HitBliss utilizes the ads as a form of currency. Each ad view earns the consumer points, as a certain number of points are required to view film and television. HitBliss has discovered a formula to integrate the ads into an interactive experience rather than time buffers between show segments. Turning frustrations into workable solutions is where operational opportunities arise. Could this be the winning approach to online television? .


“‘Koreatown’ Image Divides a Changing Annandale”


I grew up and live in Annandale, Virginia, which is a town in Northern Virginia that has changed a lot over the last twenty years. My grandma moved to Annandale in 1965 when the majority of the development occurred. During that time, many of the residents were white and most likely all of the businesses were owned by white people. However, by the early ’90s, it had deteriorated.

So what? Well, during the mid- to late ’90s, almost all of the business that developed in Annandale was done so by Koreans. In fact, upon searching “businesses in annandale”, a blog entry entitled “‘Too Many Korean Businesses in Annandale and a Washington Post article called “‘Koreatown’ Image Divides a Changing Annandale” appeared on the first page. So, if it’s unclear, there is an incredible amount of Korean-owned Businesses in my town.

Anyway, yesterday, my mom and I stopped at Wells Fargo to use the ATM. Upon entering the bank, I turned to the left, saw this lovely ad and chuckled. As everyone can see there are some bank-looking men and a boy from the 1800’s in the bottom right and then absurdly enough there is a Korean family (from, presumably, a similar time period) posted in the top left. Why on Earth would there be a 19th century Korean family featured on this ad when there weren’t any Koreans in Annandale at that time? Answer: the bank clearly identified its target market – Korean business owners that operate in Annandale.


All I Wanted Was a Pillow

Pillows are silly expensive– I actually saw one in Bed, Bath & Beyond with a price tag of $156. That’s just for one, hopefully exceedingly comfortable pillow. After coming back from break I realized I hadn’t brought back the two pillows I had brought home and now I was without proper comfort in my Barracks Rd apartment.

I assessed my options. By C’Ville standards Target is just too far away, and Walmart just didn’t feel like the place to buy a new pillow. So I rushed into Bed, Bath & Beyond at 8:30 0n a random Tuesday night kinda surprised it was open at all.

I quickly got lost in the high-ceiling maze of products that inundates a typical BB&B retail store. After nearly colliding with an employee restocking from a high-ladder I took my eyes off my iPhone and committed myself to finding the pillow I wanted. Eventually I found the pillow section, selected the appropriate fluffiness level, and fought my way back through the maze in order to pay.

Only one cashier was on duty at this hour and she was actually restocking shelves nearly the front. As I waited for her to open the cash register we exchanged the general pleasantries of the retail exchange. I generally find that by Southern standards I’m unusually curt, but by my own Northern standards I’m quite friendly.

Midway through the pillow-buying transaction the cashier, Martha, starts into an obviously well-rehearsed spiel about their loyalty card, which I quickly dismiss. In actuality, I rudely cut her off in the middle of the spiel, because I was quite certain that I did not want to save 10% now only to be roped into a relationship with BB&B.

She laughed as she finished and told me “I guess I could have stopped when you said no the first time, but they make sure we ask everyone.” We shared a bit of a laugh over this blanket strategy, but really why does BB&B want everyone in their loyalty program? It makes sense for grocery retail but as a 22 year-old male graduate student I can’t fit the profile of even a typical BB&B customer let alone a loyal one.

I think loyalty programs are leaving behind the basics of any advertising program: Segmenting, Targeting and Positioning.Throwing cards at everyone does not really get at the heart of a good loyalty program and certainly misunderstands the typical consumer.

All I wanted was a pillow, not a relationship with Bed, Bath & Beyond. Next time I’ll drive the extra distance to Target.


F. Cullo


Why loyalty cards are Woolworths’ secret weapon in supermarket wars

Customer knowledge leads to profitability.

Why companies still like to use loyalty cards when only a very small percentage of card holders are actually using them? A low customer participation rate in loyalth program indeed indicates failure of the loyal practice. The company, however, does not always to gain nothing from it. Here is an article explains Woolworths’ strategy to use loyalty cards as an alternative way to understand its customers. Let’s see Why loyalty cards are Woolworths’ secret weapon in supermarket wars.


Dunkin’ Donuts to Launch Loyalty Program

On January 31, Dunkin’ Donuts announced that it would be launching its own loyalty program later this year. Although the company has offered several loyalty programs in the past, all of them have been unsuccessful and unable to drive growth. However, as Dunkin’ Donuts Chief Executive, Nigel Travis, explained, this new loyalty program will be more “robust” and “focused on driving changes in consumer behavior in frequency, ticket, loyalty and how they pay” (WSJ).

As we discussed in class last week, loyalty programs have become very popular among retailers, and many have seen enormous success. For instance, Starbucks now “does about a quarter of all its U.S. sales via loyalty cards,” and Panera has more than “12 million customers” registered for its own program (WSJ).

Although loyalty programs appeal to the budget-conscious customers with their customized offers and discounts, they also greatly benefit businesses who can then collect data from consumers.

While loyalty programs aren’t anything new, I found Dunkin’ Donut’s program to be especially interesting because the company plans for the program to be “compatible with its new mobile app,” which allows customers to pay using their smartphones (WSJ). Thus as it appears, not only is Dunkin’ Donuts capitalizing on the increasing number of cost-conscious consumers, but they are also taking advantage of the opportunities smartphone apps provide.

By offering a loyalty program that is tied with consumer’s mobile apps, the company can begin to build up more detailed profiles on individual customers, which the company can then use to alter its product offerings.

I believe Dunkin’ Donuts is making a smart move by creating its own loyalty program and it will be interesting to see whether this particular program succeeds and is embraced by consumers.



How free online returns can spark shopper loyalty – The Washington Post

How free online returns can spark shopper loyalty – The Washington Post.


Competition between companies in the “Sustainable” and “Reluctant” relationship quadrants

We read an article in Brand Management entitled “Ignore the Human Element … This is the Dawn of the Relationship Era”. The article advises companies to form a relationship with its consumers or risk losing out. There is a matrix, referred to as the “Brand Sustainability Map”, which divides relationships up into four relationship quadrants: emotional (upper left), sustainable (upper right), limited (lower left) and reluctant (lower right). The article suggests that those companies located in the “sustainable relationship” quadrant will be the “big winners” now and in the future. It points out that if “I love Apple” is typed into a Google search bar, it will get 3.27 million hits. What about “I hate Exxon”? 2.16 million hits. From my point of view, Apple sits up in the “sustainable relationship” quadrant, while Exxon Mobile is down in the “reluctant  relationship” quadrant.

I found this Bloomberg article interesting because it shows that a company that is not in the “sustainable” quadrant can still be a big winner because of an obvious reason (that the “Human Element” article doesn’t want to admit) — consumer reliance on a product/service that is offered by a company in the “reluctant” quadrant.

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