Bill Hanifin
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For every Yin, there’s a Yang, and most brands seek out a proper balance of their Loyalty Marketing efforts to engage, retain, and deepen relationships with their customers.
Reading the Spin Within the other day, I learned that Macy’s is not yet satisfied with its Loyalty pilot to roll it out across the retail chain.
As reported, Chief Financial Officer Karen Hoguet stated “We’re still watching and seeing. But so far, while we’ve gotten sales lifts (there’s) not enough to pay for the program.”
Contrast Macy’s hesitancy with the positive description of DSW Rewards in the chain’s 2010 Annual Report:
“We are dependent on our DSW Rewards program to drive traffic, sales and loyalty. DSW Rewards is a customer loyalty program that we rely on to drive customer traffic, sales and loyalty. In fiscal 2010, shoppers in the loyalty program generated approximately 87% of DSW store and dsw.com sales versus approximately 84% of DSWstore and dsw.com sales in fiscal 2009.
As of January 29, 2011, approximately 16 million members enrolled in “DSW Rewards” have made at least one purchase over the course of the last two fiscal years, compared to approximately 13 million members as of January 30, 2010.
In the event that our “DSW Rewards” members do not continue to shop at DSW or the number of members decreases, it could have a material adverse effect on our sales and results of operations.
The DSW program is reasonably simple in construction and it is clearly not just returning good results for the retailer, it is cited as being material to the health of its business.
Dick’s Sporting Goods shared a few “secrets” to its success as a leading sporting goods retailer in its most recent Annual report with a tip of the hat to employee training:
“We strive to complement our merchandise selection and innovative store design with superior customer service. We actively recruit sports enthusiasts to serve as sales associates because we believe that they are more knowledgeable about the products they sell.
For example, we currently employ PGA and LPGA golf professionals to work in our Dick’s golf departments and Golf Galaxy stores, bike mechanics to sell and service bicycles and certified fitness trainers to provide advice on the best fitness equipment for the individual.
We believe that our associates’ enthusiasm and ability to demonstrate and explain the advantages of the products lead to increased sales. We believe our prompt, knowledgeable and enthusiastic service fosters the confidence and loyalty of our customers and differentiates us from other large format sporting goods stores.
In my view, Dick’s may have identified a key to execution of loyalty program strategy that leads to improved customer experience and increased customer satisfaction with the brand. I wonder if Macy’s is allocating time and resource to training of its front line staff as much as it is churning the customer segmentation and financial models.
Sometimes, in order to find success, you have to focus not just on “what can be measured” but what impacts the customer.
What are you focusing on?
