Regardless of our personal views, society seems to function best when a few governing laws are in place. Like a series of scientific laws dealing with gravity, motion and relativity that help keep us Earthlings grounded when it comes to everyday life.

There are also business laws like supply and demand, diminishing return and one of my favorites, the unnamed "whatever check-out line you choose will end up being the slowest line" law. In this article we're going to deal with an additional business law that states... when it comes to making a decision you have one of two choices, you can spend time or you can spend money, usually whichever one is most readily at hand.

Here's an example... let's say you need new benches for your greenhouse or perennial department. You can

save time by spending money to purchase ready-made benches or you can spend time and save money by constructing them yourself. Your decision will be based on whichever one you currently have the most of... time or money. Either way you end up with some nifty benches by spending one or the other... time or money. Your choice.

Here's another example of the business time or money law related to ubiquitous loyalty programs found at garden centers. I'm a firm believer that a company's best customers deserve being treated in special ways. Repeat shoppers are the lifeblood of retail and service firms. But something went terribly wrong when the industry lemminged into copy-cat loyalty programs. Instead of companies finding ways to show gratitude to their most loyal customers, the vast majority created financial kick-back programs that offered rebates, often at twice the net profit percentage the companies were achieving! While the intent may have been to entice shopper loyalty through financial "bribes", the result was a negative impact on profit and an increase in discounting. (Note: Discounting isn't just lower sale prices in ads. If you offer points, bucks or rebates you're discounting.)

"If we give you money, will you please keep shopping with us?"

It's as if no one bothered to ask what should have been the very first question... "Should we develop a program that shows our loyalty and appreciation toward our best customers or a program that bribes people with discounts in hope that they stay loyal to us?"

Human nature obviously won out as companies chose the self-preservation option hoping sales would increase and customers retained if rebates, rewards, bribes, discounts were offered. Years later garden centers gloat about the percentage of  "loyalty program" shoppers passing through their registers. But here's why that high percentage of loyal shoppers shouldn't be used as a measurement of the program's success... customers aren't stupid.

If I'm a regular shopper at your place and you offer a discount I'd be stupid not to sign up for the program. Being on your loyalty list just means I'm smart enough to see the discount advantage you're willing to offer. Since you were already my favorite garden center, I would have kept shopping with you regardless.

After implementing loyalty programs, companies doing millions of dollars in sales before the rebates now do millions in sales (or less) with rebates. Chances are a discount is being provided to the same customers that were good customers before the program began. The best customers end up with discounts they didn't ask for and no one has shown that flocks of new customers are arriving because there's now a loyalty program in place.

In other words, like what happens so often in this too quick to copy-cat industry, because a garden center owner stood up at a conference, had an article published in a trade magazine or posted unsubstantiated wisdom on some industry Facebook page about their awesome loyalty program, hundreds of other garden centers, regardless of their financial ability to do so, initiated a bribe... I mean discount... I'm sorry... a rebate... oops... a reward program their customers weren't asking for.

There is a better way.

How about a customer program without a rebate? How about a program designed with the customer at its core. Not to bribe people to shop because of financial kick-backs but to show your true appreciation for their continued business.    

Here's what it would entail...

What people know they will receive when they participate in the program:

- bimonthly or weekly enews (the properly designed type of enewsletter)

- no need to keep their receipts

- invitations to member only special events

- extended warranty on trees and shrubs

- early notice of events

- birthday certificate

- other perks that don't resort to paying people to shop with you

Unexpected Bonuses

Here's where it gets fun...

- signing bonus of a small gift when they register

- follow up emessage thanking them for becoming part of the club

- postcard mailings according to their shopping habits

- gifts sent according to spending plateaus

A gift is given with no strings attached.

Don't tell people everything they'll receive, surprise them.

Another business law is that you don't buy word of mouth, you earn it. Giving people a gift they didn't expect and don't know when the next one may come creates an environment of excitement. People will talk about what they receive, partly out of surprise and partly out of pride. Either way your center will be a super hero.

Each center can determine dollar plateaus depending on customer spending levels and gifts to send which can change from month to month. Gloves, a trowel, a plant, a book, a personal tour, a personal visit... review what people purchase then connect to their interests. Invite vendors and other retailers to participate. (A coupon sent to a really big spender for a massage would surely be welcomed by the customer and a plus for the spa.)

This type of reward program won't be as easy to manage (there's that "time" trade-off) as offering rebates or POS points that convert to discounts (there's that "money" trade-off.) Obviously there will be expenses with any business function but this type of program shifts the relationship between customer and company from bribery to appreciation.

"The real measurement of loyalty should be your loyalty to your best customers, not their loyalty to you."

Do you want a program where customers are paid through bribes, rebates and discounts in hope they will remain loyal or one that reminds customers how much you appreciate their business? Showing someone how much you care goes a long way at creating the type of relationship where the receiver feels appreciated, the first and most important step at creating true loyalty.

Besides... name one company in your market that does something this bold. Go ahead. Who?

Right... no one. And that's the first reason why this type of truly tangible customer loyalty program will work.

Robert