Wednesday, November 14, 2012
Is Loyalty Really That Simple?
the recent issue of Colloquy Fred Thompson writes that the Scott brand (toilet paper, paper towels, etc.) is “taking
a new route to loyalty: instead of focusing on product attributes, it's offering discounts from other companies”.
To be known as Scott’s Shared Values the program reportedly will be heavily promoted with both television
advertising and online support. The concept will involve consumers in general (not necessarily Scott’s customers) who
will be signing up online at scottbrand.com.
7:22 pm est
the press releases it’s difficult to for us to use the term “loyalty program” for this effort. Is it truly
expected to build any kind of long term, emotional connection to the brand, with current customers? Will
it really make current Scott’s customers behave any more loyally? And while it will create activity, it will have costs,
so can it actually generate any profit?
We believe that customer loyalty is both an emotional and a behavioral state.
It never should have been thought about as just related to product attributes (as suggested above) but rather is dependent
upon the customer’s perceived value of the TOTAL experience with the brand.
· Can coupons for non-Scott products add to their
perception of value? -- Perhaps if they offer significant savings, for products consumer genuinely want, and are not available
to everyone, everywhere.
· Can a program available to
anyone be considered special treatment to valued current customers? -- Unlikely.
· Can indiscriminant distribution of Scott’s own coupons to customer who would have purchased
the products anyway drive profits? I thought we have always been told that the reason that loyal customers are so desirable
is because they would pay a premium for the brand.
We strongly recommend
that a process be put in place to measure the lift in sales and increase in profits that this program will deliver
in real life before the company makes too large a commitment to its new route to loyalty.