Article

Loyalty segmentation needs to extend into the store

When front-line employees are left out of the loyalty process, points programs miss the point.

June 11, 2009

I spent the first half of this week at Loyalty EXPO in Hollywood, Florida with smart people from retail, CPG, banking, and vendors to those industries talking about the business of creating loyal customers.

Perhaps as many as half the people there were all about points programs — from the card issuers and payment solutions to the brands that participate in redemption programs. These programs, once approved (which can take time), are a fast way to roll out a consumer benefit without involving many people inside the organization. Bypassing employees on the front lines — whether in the bank, the store or the call center, there are lots and lots of them — makes implementation easier.

Plenty of speakers have run the numbers and vouched for the ROI on these programs. A few were emphatic about the importance of making programs multi-channel, the most important channel being the store. All were adamant that the name of the game is to segment customers, and make different offers to different folks based on their profile and what you want them to do. I didn't hear anyone talk about pulling that idea through to the in-person experience — so, we're left treating all walk-ins the same because we haven't taught the sales or branch associates how to tell customers apart or how to serve them distinctly.

However, by leaving front-line employees out of the story, points and other rewards programs miss the point (pun intended). Customers have multiple channels for accessing brands today. They go to the store or branch for a few basic reasons. They are in a hurry or need help. They want personal attention and interaction. They want to "kick the tires" literally or figuratively, or they want reassurance that you know what you're talking about or that your offer is a good one.

These moments of in-person interaction can be a brand's best loyalty builders. Recent research by Miller Zell shows that 65 percent of consumers are making a shopping list before leaving the house, and that 60 percent of the time they are making the decision about which brand to buy when they are IN THE STORE. The first hurdle is to get on the shopping list. The second is to make it into the shopping cart and through checkout. Sales associates have the opportunity to influence customer decisions about which brand to buy.

Along with shopper marketing and in-store communications, these personal interactions are important relationship-building opportunities to manage. As Bob Phibbs, the Retail Doc, wrote in a recent article on this site, "the failure to buy is often the failure to sell." Here's a new idea for building loyalty and boosting sales: think about redirecting some of the spend on points programs to training the front line in how to serve distinct customers the way they want to be served.

Turns out store associates the world over are paying attention to customers. Cashiers in particular have a lot to say about the customers they wait on. According to a June 3 story in the Wall Street Journal, cashier memoirs offer shoppers a playful dose of reality.

Judy Hopelain is a consultant withBrand Amplitudeand abloggeron the topic of retail experiences.