Tag Archives: consumer loyalty

Store rewards programs: Are they worth the hassle?

You grab the gallon of milk you forgot yesterday, pick up the cheapest toothpaste, and head over to the checkout line. Just when your quick trip to the grocery store is almost over, the employee at the register says, “Do you have a rewards card? It’s free to join.”

From department stores to drugstores, retailers are asking consumers to enroll in rewards programs, also called loyalty programs, for access to better deals. But signing up may not be worth the hassle. And getting stuck in line behind people using the cards makes you wish they’d disappear.

“First of all, you’re just going to be annihilated with emails,” says Kurt Jetta, CEO and founder of retail and consumer analytics firm TABS Analytics. “It’s not a weekly thing. It’s a daily thing for most of these retailers.”

The benefits of rewards programs, however, might include exclusive coupons, early access to sale events, and rewards points that can be redeemed for discounts or products. That lures many shoppers to sign up. The 2015 Colloquy Loyalty Census found that the average U.S. household is enrolled in 29 loyalty programs, but actively participates in only 12.

Rather than signing up for several rewards programs, it may be more beneficial to stick with one or two you’ll use frequently. Some retailers, such as Nordstrom and Best Buy, structure their programs so that the heaviest spenders reap the greatest rewards. To reach the highest tier of the My Best Buy program, for instance, members have to spend $3,500 in purchases per calendar year. This unlocks a longer returns and exchanges window (45 days compared with the standard 15) and more points for purchases (1.25 points for each dollar spent compared with 0.5 points).

“The perks really go with people who spend the most with a certain brand,” says Bob Phibbs, CEO of consultancy firm The Retail Doctor. Phibbs recommends looking over your credit card statement to get a sense of where your money is going. If your spending habits show you’re already loyal to a particular store or brand, you could get the most from a membership there.

If you’ve already signed up for several programs, read the fine print on promotions to help you cut back. Cancel memberships at stores that frequently send out offers with short expiration periods for points or strict purchase requirements.

Some rewards programs get better over time if you’re willing to wait. Jetta describes rewards programs as an agreement between the store and the shopper: Customers provide demographic or contact information to sign up for a program, and stores use the information to change programs in ways that could potentially retain more customers and increase spending.

In 2015, for example, Starbucks announced partnerships with Spotify and The New York Times to give members access to free music and content. “They could’ve built a program that was strictly based on buy 10 coffees, get one free, but they’ve now extended it across the store,” says Jeff Berry, senior director of research and development at data analytics company LoyaltyOne. “They’ve really tried to create relevant benefits to their customers.”

So when should you add another store rewards program card to your already crowded key ring? Enroll only if you shop at a store frequently and you’ll actually use the benefits.

Otherwise, politely decline when the cashier asks you to sign up.

 

Major brands come out for equality

What could overshadow the monumental news that Dunkin’ Donuts was celebrating Oreo’s 100th birthday by sprinkling cookie crumbles on its creamy Coolattas and stuffed doughnuts?

What could be bigger than Baskin-Robbins celebrating with Oreo ’N Chocolate, a chocolate ice cream and Oreo cookie pieces swirled with a crispy fudge crackle ribbon?

Well, a rainbow-striped Oreo cookie that looks to be about 2 inches tall, of course.

Kraft’s iconic cookie got a Pride-themed makeover for mass consumption on Facebook, where nearly 300,000 people “liked” the photograph and nearly 60,000 shared a comment in late June. The image prompted odes to Oreos and bellows for a boycott.

“That rainbow cookie probably created a crisis for One Million Moms,” said gay rights activist Kathy Tomlinson of Miami, referring to the right-wing Family Research Council affiliate that uses online tools to promote boycotts of companies with pro- gay profiles.

But there was only a crisis of calories for Tomlinson, who in early July purchased her first package of Double Stuf Oreos in a decade.

“Good stuff,” she said. Gay consumer Joseph Carmody of Madison, Wis., also purchased his first package of Oreos in some years, which he confessed in a fan letter posted to the cookie’s Facebook page: “Corporate America has either gone gaga for gays or there’s a conspiracy to make us all fat. Love ya, cookie cookie.”

Bob Witeck of Witeck Communications, a public relations and marketing firm based in Washington, D.C., says the attention-grabbing, crème-striped cookie may lead LGBT consumers to look more closely at Kraft’s record.

“Rainbow Oreos look swell, and grab our attention during Pride,” he said. “But it is never so simple, and that’s not the prescription to sustain loyalty. I suspect more LGBT people would express support for Kraft products if they knew that Kraft not only sponsored the 2006 Gay Games held in Chicago, but also fought back when anti-gay groups brought a shareholder petition against Kraft. Kraft management – and 99 percent of its shareholder supporters – rejected the anti-gay measure and responded, ‘Diversity makes us a stronger company and connects us with the diversity that exists among the consumers who buy our products.’ ”

Brand loyalty among LGBT consumers is legendary. And so is the community’s buying power, which for 2012 is estimated at $790 billion, according to Witeck Communications.

So companies such as Kraft – which rates a perfect 100 on the Corporate Equality Index compiled by the Human Rights Campaign and boasted “we are open and inclusive” months before Photoshopping the Pride cookie – can expect to see some consumer gains following its social goods.

The same goes for:

• J.C. Penney, which earlier this year hired Ellen DeGeneres as its spokesperson;

• Nike and Starbucks, which in February endorsed marriage equality in Washington;

• Microsoft, which also endorsed marriage equality and whose CEO and co-founder each recently contributed $100,000 to defending gay marriage;

• General Mills, which in June endorsed marriage equality in Minnesota;

• Target, which this summer debuted a line of Pride-themed T-shirts to raise money for an LGBT nonprofit.

“LGBT adults say that they respond strongly to brands and to companies that treat LGBT people fairly and equally, and also give back to the nonprofit causes important to LGBT families,” Witeck said.

Research shows that:

• 87 percent of LGBT adults will consider buying a brand from a company that provides equal benefits for LGBT employees.

• 23 percent of LGBT adults have switched products or services in the past year to a company more supportive of the LGBT community.

• 71 percent of LGBT adults remain loyal to a brand seen as supportive of LGBT issues, even if it costs more or is less convenient to buy.

• 47 percent of LGBT adults are more likely to purchase a company’s prod- ucts or services when an advertisement has been tailored to an LGBT audience.

Such outreach catches Tomlinson’s attention, and Carmody’s.

“I’m well aware of who is reaching out to the gay community and how,” said Carmody. “That goes for the big brands but also the local businesses.”

Said Tomlinson, “I know who our friends are, and I’m really loyal to them.”

Right-wing boycotts – a tool that Witeck says are rarely successful or notable – ironically can help drive LGBT consumers to a brand or product.

Of the 20 brands getting the most buzz from LGBT consumers on YouGov’s BrandIndex, an online measure of public perception and products, at least eight were targeted this year with right-wing boycotts.

One new addition to YouGov’s LGBT buzz list is Starbucks, and its new popularity may have something to do with a community emboldened against the boycott being waged by the National Organization for Marriage, which also is leading the effort to repeal Washington’s gay marriage law.

NOM collected 45,446 signatures in its five-month- old “Dump Starbucks” campaign, as well as about 18,157 pledges to “Dump General Mills” because, a NOM statement asserts, “We cannot allow Corporate America to throw its weight behind the gay marriage movement!”

If those numbers seem high, consider that in one week 70,000 people signed an HRC petition thanking General Mills for supporting marriage equality and a Washington state drive to thank Starbucks – which posted 15-percent growth in revenue the last quarter – resulted in the collection of more than 650,000 supporters.

Also, the “Dump Star- bucks” campaign has not diminished the company’s commitment to equality. In mid-June, months after NOM’s U.S. campaign began, Starbucks’ Australian division endorsed marriage equality after competitor Gloria Jeans donated $30,000 to the anti-gay Australian Christian Lobby.