August 23, 2017 | Blog
Loyalty Craze in Competitive Businesses:
I noticed the people I met during my Fourth of July week on vacation in Minneapolis were surprised by my answer to “What brings you to town?” First there would be a long pause…followed by a laugh and a question like, “Really, you came here on vacation?”
Yes, really! I’d heard this is the time of year to come, what is referred to as the “Week of Summer” by my Minneapolis friends. The primary reason for picking Minneapolis for vacation was my 20 year old son has always wanted to participate in a fund raiser for Doctors Without Borders that raises money through a video gaming marathon. Volunteers speed-run the games and viewers make donations to this worthy charity.
Not being a gamer, I took a tour of the Twin Cities then lost myself for days at the Mall of America, the largest mall in North America and 12th largest in the world. While it was hard to grasp the enormity of the space and the number of stores, what struck me most as I shopped and dined there was the commitment the retailers had for gaining my e-mail address and enrolling me in their loyalty program. Every transaction I had included the clerk asking, “what is your e-mail address?” If I hesitated to give it or questioned their need for it, I was offered some logical reason for giving it, like, “We’ll send you a tracking number so you can…” or “You will receive a coupon for $25 off your next…” or we’ll e-mail you the receipt and warranty information.
In some stores, they offered a discount off my entire purchase in exchange for my contact information, others offered a $5 or $10 reduction in my purchase. Then there were the loyalty cards and key chain hangers with bar codes for identification and repeat use. Immediately my e-mail box began filling with offers to engage and sign up for other services. The ones I opened were the ones personalized to me and obviously relevant to something I cared about and related to what I had purchased at that store.
As I watched the news in the airport on the way home, I heard that Sears and K-Mart have announced more store closings and according to Fortune, even the high end stores like Neiman Marcus are in big trouble trying to compete with online shopping. Seems like the ones still in the game, certainly the ones at the Mall of America, are banking on customer engagement and loyalty to stem the tide and keep their registers ringing.
The challenge is familiar to us here at Apogee where for 25 years now, we have been helping utilities better serve and educate their customers. My natural gas provider here in Georgia where gas is deregulated and the marketplace highly competitive, highlights the line item on my bill each month showing what I have earned as a credit for being a loyal customer. It’s not a lot of money, but it reminds me each billing cycle that they know I have been with them for many years and that they appreciate my business and loyalty.
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