According to a recent B&T, this year Myer will spend more on direct marketing to its Myer One customers, than all of its other advertising put together. Their CEO, Bernie Brooks, reckons that “once you have the basics of the business right, it’s the use of DM that drives the future trajectory”. Apparently each $50 voucher invested returns a sale of $125. Remembering that the $50 voucher is earned from dollars already spent in the store, that’s a pretty good return. Factor this across 2.7-million Myer One cardholders, and this focus on their loyalty programme makes good business sense.
As a long-time Myer One cardholder, I’ve watched the programme develop and evolve into the sophisticated loyalty scheme it is today. They know the products I buy, the brands I like, which store I shop at, and they make relevant offers. They also consistently reward my shopping behaviour, and even remember my birthday! And it works. I rarely shop at any other department store. On the surface it looks deceptively simple, but you have to admire their commitment to and investment in building their loyalty programme. Contrast that with Fly Buys and Qantas Frequent Flyer – speaking of which, does anybody else feel like they’re being stalked by Qantas’ current campaign to convert our credit card points by the end of March?! It has an air of desperation.
Another brand investing heavily in loyalty is Woolworths. They’re doing it well too. Starting as an Everyday Rewards customer to get petrol discounts, I now have an Everyday Rewards credit card, and by using this at a Woolworths business (supermarket, petrol, Big W, Dan Murphy, Dick Smith), I accumulate points which can either be converted to Qantas Frequent Flyer points (one-for-one), or a cash voucher.
Done properly, these loyalty programmes are a highly effective marketing tool that drive repeat business. Makes me wonder why more Australian brands don’t embrace them.
I agree. This programme is so smart. One thing I think is great about it is that Myer appreciate that sending a tangible plastic gift card in the mail (rather than delivering it thru cyberspace) has enormous appeal. I guess the more our computer inboxes get full of e-mail, the more we appreciate and value things we can feel and touch. My wife for one feels compelled to use her reward card and always buys several times its value. Sure its more expensive to send something thru the mail, but betcha the ROI stacks up really well.
I agree that loyalty programmes are an excellent marketing tool. With the simple example of coffee shop stamp cards, it’s easy to see how a good experience as a customer can be multiplied with even the smallest amount of special treatment.
You asked why more Australian brands don’t use them, but you’ve given the examples of two retail giants. Of course they have the resources to pull off such a large scale loyalty program and survive possible glitches in its development over the years.
Perhaps the reason for its limited use lies in Australian businesses not wanting to risk losses in a failed attempt? Or perhaps they understand that the Australian consumer is an intelligent one, one who doesn’t want to feel cheap or bought, but rather, feel “wooed” almost to the point that they don’t realise it at first…
Or maybe I’m just romanticising the whole notion of loyalty programmes…?
Our clients who currently leverage loyalty programmes are experiencing returns very similar to the Myer programme mentioned above, in these difficult economic times, marketers who engage with their advocates in a relevant and meaningful way is rewarding for both business and consumers.