Star Treatment

Let’s start with a quick demonstration: Pull out your wallet and count how many customer-loyalty cards are wedged in it. Seriously, stop reading for just a second and do it. Most marketing statistics estimate you have two or three, at least.

For the record, I have five in my purse right now. (And I would venture to say that’s the norm for most women.) Here’s the crazy thing: Despite these pieces of plastic attesting that I’m a Very Important Customer, I don’t feel special. In fact, I rarely shop at two of the stores. And let’s not get started on “virtual” loyalty programs that, in many cases, are nothing more than a daily dose of sales promotion delivered to the e-mail inbox.

Which brings us to the heart of a prevalent retail problem: As customer-loyalty programs have become widespread, their importance has diminished dramatically. These programs are part of the status quo, and most seem content with mediocrity. An e-blast here, a generic postcard there—nothing that truly makes a customer feel like a star.

This is perhaps forgivable for mass merchants and chain stores. But independent retailers—who pride themselves on superior customer service—have no excuse for running a rewards/loyalty program that is anything less than exclusive.

The red carpet treatment?
According to a study conducted by the consulting firm Bain & Co., although 80 percent of companies believe they offer a superior customer experience, only 8 percent of their customers agree. Boring and blah reward/loyalty programs certainly don’t help consumers’ perceptions.

In the garden-center realm particularly, retailers have to do something unique to break through the clutter. One way America’s Best Flowers Garden Center in Cottage Grove, Wis., achieves this is by not giving out lots of rewards.
“Our customers receive the knowledge that 1-percent of their sales goes to one of six nonprofit groups they choose,” said co-owner Edward Knapton.

Loyalty customers also get more traditional perks, like weekly e-mail updates and bonus bucks redeemable in July and September. But Knapton makes sure that outreach is based on the particular habits of customers.

“A loyalty program should only be used if you’re going to use the sales data to enhance the customer relationship,” he said. “Break apart what they are buying, and make special offers based on what they are buying. The goal is to help them better succeed with the plants they are using.”

The personal touch goes a long way, too. Knapton and his team (www. americasbestflowers.com) will send thank-you notes based on recent purchases. Real data—tied to sales—helps the staff determine who will be invited to parties, special events, etc.

“In general, I feel the independent garden center has to build a relationship,” Knapton said. “I’m not sure how you do that unless you track a customer’s sales along with personal information.”

This is both a subjective and empirical process, according to Knapton. Customer history and preferences should be common knowledge among long-time employees. But solid data is needed to fill in the gaps when staff members move on.

“My belief is that [information] should be in the computer and in someone’s mind.”

Texas-based Calloway’s Nursery also strives to make customers feel like they’re part of an exclusive group. With 17 locations, this is no small feat. E-mail marketing plays a big role in outreach, but with a twist.

Members of the store’s garden club receive exclusive coupons that can be viewed and printed by clicking a special link. (Translation: These member-only deals aren’t easily forwarded to folks not in the group.) Exclusive notification about in-store specials, weather alerts and garden-maintenance reminders round out the list of e-mail-able benefits.

For Calloway’s, virtual outreach has resulted in real-world brand affinity. An “on-the-fly” promotion event the store organized earlier this year attests to this.

After announcing its upcoming Edible Festival, Calloway’s received a request from the staff of the popular television program “Good Day Houston” to bring a group to the studio, where the show’s on-air crew would tape a 30- second plug about the nursery company.

“Our team came up with a quick plan to ‘divide and conquer,’ and we got an e-mail out to our 3,000 most active e-mail customers in Houston inviting them to come with us on the show,” said Kimberly Bird, Calloway’s vice president of marketing. The nursery asked the prospective “stars” to dress up in their best gardening outfits and join the party. As enticement, Calloway’s offered a $100 gift card to the person sporting the best set of threads, and everyone else who participated received a $15 card.

Ultimately, 15 of Calloway’s garden club members met Houston store manager and media spokesperson, Eddie Russell, at the studio. The show personality picked the member with the best outfit, and the members stood with Russell as he taped the company plug about the upcoming Edible Festival and special deals on plants.

“It was a lot of fun,” Bird said. “We furthered the relationships we have with some of our most active customers and club members. Plus the ‘visual’ presentation of the garden club fun and camaraderie will hopefully help us grow membership.”

A word from IT
Loyalty/reward programs wouldn’t be where they are today without technology. The irony, though, is that retailers’ perceptions of these programs haven’t always evolved with computer advancements.

“I think most people see loyalty programs as just that,” said Bob Schmitz, former nursery owner and current owner of SimPOS Software. “They spend some money, you give them a discount—and there you go. But it should really be a customer-tagged-to-an-invoice program.”

Schmitz explained: “The term ‘loyalty program,’ in my book, may be a bit of a misnomer. It should be about what you can offer a customer—specials, events, etc.—by tagging them to an invoice. So you have a database of information on needs, wants and preferences.”

Schmitz encourages retailers to go through every detail before they implement or change a preferred-customer program.

“If you set up a loyalty program, make sure you think it through,” he said. “Make sure you set it up the way you want, and then don’t screw around with it. Don’t be like the frequent flier programs—whose rules change hourly. Keep things simple and consistent.”