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Wednesday, November 14, 2012

Is Loyalty Really That Simple?
In 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

Despite 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.

e 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.



7:22 pm est          Comments

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