Monday, July 25, 2011
Are loyalty cards the key to retail success?
There has been a fair amount of chatter among marketers recently in
regard to Tesco’s decision to bring its Clubcard program to the US for its Fresh & Easy supermarkets.
If you listen to the pundits you’ll hear opinions ranging from those that believe Clubcard will save the
day, to those claiming that at worst the loyalty card program “can’t hurt".
11:00 pm edt
Let’s stop right there. If it doesn’t help drive a lot of sales, then it will indeed hurt.
If the incremental sales generated by the program are not greater than the fully allocated costs (staff,
computer time, materials, etc.) incurred in promoting, administering, training staff, delivering bi-monthly online communications,
and providing those cash-back rewards, then the Clubcard loyalty program will just additional costs and prove to be another
drag on Fresh & Easy’s bottom line – which would hurt them badly.
Were told that Clubcard was a big success in the UK. But does
anyone actually know if a market test of the program economics was ever run there (with real test and control groups to quantify
the differences in purchases)? Or like many other points programs are we simply being told that customers
that join the program are more loyal and buy more than those that don’t join? (A matter that may
demonstrate self-selection, but certainly in no proof of any cause and effect).
Tuesday, July 5, 2011
Did Delta add staff or just move them?
Delta like so many other companies is following comments
about their airline’s service and performance on Facebook, Twitter, YouTube and other social media channels.
And they are actively responding, answering quetions, and solving customers' problems. We
think that’s smart. But based upon what has been written, it appears that they taken members of their
existing customer service team off email and the phones and put them on the social media desk.
5:59 pm edt
That makes you wonder: 1) Have they added to headcount or simply stretched the resources from the
traditional customer service channels? 2) Have they cherry-picked the very best of those agents and assigned
them to the social media channel? 3) Given them greater empowerment to solve customer problems?
4) Given them greater encouragement, training and recognition for their efforts? If yes, what has
that done to the already maligned level of service provided to traditional email and phone customer service? Have
they put a band-aid on the social media word of mouth while allowing the rest of word of mouth (the face-to-face conversations,
phone calls, emails, text messages, etc.) to worsen. We don’t know, but it does make you wonder.
And the bigger question: Is Delta,
and the other firms who have dedicated such resources to the social media channel, just training smart customers to recognize
that going directly to the company through the traditional channels is only for customers who don’t know better?
Can anybody help with some answers here?