Loyalty Truth

There’s a lot of shorthand language used in sports. A singular word is often used as a title that speaks volumes to those in the know. In the midst of NBA playoffs, I’ve heard several retired players serving as analysts refer to the league as the “Association”. There are many professional bike races around the world, but the one that comes up each July and is the most famous in the world is simply referred to as “The Tour”.

When I walked into Sports Authority last week and was asked to join “The League”, I had the feeling the sporting goods chain was striving to capture some of that same magic. The punchy program name gives the member a feeling that they are part of something, even if boils down to just a 5% discount able to be earned every 3 months.

I could dwell on the structure of the program and tell you that the program rules are largely unimaginative and the promises of value are vague beyond the 5% discount shown in their literature. The more important subject I want to treat is the motivation behind the launch, and how I read between the lines of program rules to interpret what they are created to communicate to customers.

For instance:

• The enrollment process was seamlessly built into the point-of-sale machinery and employees were well trained to facilitate enrollment without impacting check-out time. This tells me that Sports Authority is dedicated to building membership in the lowest cost channel available (smart) and is telling its customers they value their time (even smarter).
• The League is structured as a never ending interval workout, i.e. you run hard for a brief period of time, then rest for a moment before taking off again. Members earn 1 Point for every $1 spend on “qualifying purchases” (a Loyalty Asterisk) and must reach a minimum of 100 points in a calendar quarter (January 1 -March 31, etc.)  to be eligible for Reward Bucks. Here’s where the interval concept takes shape. Whatever you earn in the quarter generates a 5% equivalent reward (assuming you met the threshold) and then the account balance is set to zero with points below the threshold forfeited. This structure may exhaust consumers not able to keep the pace and The League had better build in some memory, doing special things for those who consistently shop even though they don’t reach a threshold.
• The program has an earning ceiling of $200. Apparently Sports Authority wants consistent customers who spend, just not spend too much. Yes, I realize that the ceiling denotes people spending $4,000 per quarter and that the rule is in place mostly to control fraud, but does it also discourage schools and local teams from sending all of their business to Sports Authority? I’ll give SA the benefit of the doubt that their data analysis showed this level of spending to represent true “outlier” behavior.
• Rewards are delivered in two ways, via sportsauthorityleague.com and by white mail. Web delivered rewards are available within 5 to 7 business days after the end of the designated interval (quarter), but those that come by mail take 3 to 5 weeks to arrive. With that contrast, why not take the bold step to make rewards available only online. There are reasons (see below).
• The list of things Rewards points cannot be redeemed for includes some of the typical items (gift cards, items intended for resale, etc.) but also includes online purchases. If you are going to make your website the most convenient redemption channel, why not let the rewards earned be used in that same web visit to make a purchase? There’s a group of 80 Million strong with growing influence called Generation Y that seems to have become fans of the internet

The motivation and timing of this program launch? I could imagine a few quotes overheard in marketing meetings at Sports Authority ranging from “we need to know more about our customers” to “it’s about time to launch a rewards program, everyone else has one”. The real reason just might be that “everyone” in Sports Authority lingo means Dick’s, and the competing chain just opened its first store in my area in a plaza directly across the street from Sports Authority. A week or two before The League came into being, storefronts were repainted and a new sign installed. Preparing for a more intense battle for sporting goods sale, Sports Authority probably launched its rewards program as an answer to Dick’s Scorecard program.

The good news for Loyalty Marketers is that despite criticism, most retailers still consider some form of rewards program as an effective tool to attract and retain customers. The better news is there is so much more that can be done by and on behalf of these same retailers and their customers. Sports Authority is a perfect venue to create a game based environment, maybe in partnership with local teams, and to incorporate social channels for communications.

It’s early in the first quarter, let’s see how the game plays out.