What Makes a Good Loyalty Program?

In my last post I spoke about the Woolworths Rewards loyalty program and where it missed the mark as far as loyalty programs go. I thought I would continue on with that theme and look at what makes a good loyalty program

Almost all retailers have a loyalty program, you could say it acts as a guarantee of future purchases by customers. But what makes us want to join a loyalty program? Is it that we love the brand and want to be kept updated with product information and sales? Do we want to earn cash back or earn points that can be redeemed for products. Whatever the reason we are a population that loves a reward. 

In 2013 the Australian Marketing Institute conducted a study of loyalty programs. They found that 88% of consumers over the age of 16 were part of a loyalty program and 11% of consumers were members of more than 10 programs. 

That is a lot of customer data being made available for marketing purposes. So what makes us join and remain loyal to these programs? With so many programs out there how do you choose? Do you want membership to be free or are you happy to pay a membership fee knowing that the rewards will far outweigh any investment?

A common opinion is that a loyalty program that offers the opportunity to move up membership tiers is quite successful. A perfect example of this is the Qantas Frequent Flyer program. When you join you are on the bronze membership level. Now while you accumulate points whenever you fly or spend money at an affiliate, the real value is in accumulating status credits. Status credits can only be obtained by flying and depending on your destination that will determine how many status credits you earn. Once you have earned 300 status credits you go up to the Silver membership. This is where Qantas is smart. In addition to seating privileges and 50% bonus on your points,  as a gift for achieving Silver status, they give you two passes to the Qantas club. To maintain Silver status you need to accumulate 250 status credits but as you’ve had a taste of the Qantas Club, you now want to earn enough status credits to obtain a Gold membership which entitles you to access to the Global Lounges. So now you only fly Qantas so you can earn those coveted status credits regardless of how much more you are spending flying with Qantas rather than one of their competitors. Pretty smart!

So what will you be looking for when you join your next loyalty program?


Black Friday, Cyber Monday. A Copycat Event or a Clever Marketing Tool?

We all know that Thanksgiving took place in the US last week. The Friday after Thanksgiving marks the official start of the Christmas shopping season and has been dubbed Black Friday, it is then followed by Cyber Monday.

It seems this year Aussie retailers have jumped on the Black Friday band wagon. I need to wonder, does it mean anything to us? Are we just trying to pick up another American tradition?

I was invited to participate in a quick survey a couple of weeks ago. The topic was ‘Should Australia celebrate Thanksgiving?’ Now I think being thankful for all we have is great but I think if we were to celebrate this American holiday it wouldn’t be for the right reasons. 

There is a long and rich history as to why Thanksgiving is celebrated. It centres around the pilgrims that traveled from Plymouth England on the Mayflower to the United States. Afterthe pilgrims successful first corn harvest in 1621, Governor William Bradford ordered a feast to celebrate this effort. Over time the celebration of this feast day have evolved to an American national holiday celebrated on the last Thursday of November without the religious significance it once held.

Australia didn’t even exist back in 1621 so to celebrate the true significance of Thanksgiving seems pointless in my opinion. If we were to celebrate Thanksgiving to commemorate a significant event of our history then I would be all for it.

It seems though regardless of whether we celebrate Thanksgiving or not, retailers are embracing the Black Friday and Cyber Monday trend. Are retailers being clever? Are they scaring us into making a start on our Christmas shopping? Does following an American tradition make it seem more real? 

For many years including this year through the news and social media we are constantly reminded that we have so may shopping days and sleeps until Christmas. Do we really need the Americans to tell us when to start shopping? I have received so many emails from retailers telling me all about their Black Friday and Cyber Monday specials. Don’t get me wrong, I love a good bargain but do we have to label our shopping events with American terms? Is it not time that we came up with an Australian term that means just as much as Black Friday or Cyber Monday? There are so many clever marketing professionals out there, surely we can come up with an alternative.