Loyalty Program Or Just Less Profit

Loyalty Program Or Just Less Profit

by Robert Hendrickson

Something really backwards happened when the industry created so called “loyalty” programs. Instead of garden centers creating programs that would actually show gratitude for their loyal customers’ support, most created kick-back programs with rebates in an attempt to “reward” people already shopping with them. The behind closed doors intent was to create a process that would surely make shoppers loyal to the company by offering them financial “bribes”.

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

Companies doing millions of dollars in sales without rebates ended up doing millions in sales with rebates. So far no one has emphatically been able to prove that as the result of their loyalty program, customer count or spending levels improved beyond the point to off-set financial rebates. Measuring what customers “say” about companies offering loyalty programs isn’t the same as measuring what customers actually “do” on a store by store basis. Rebates are most likely being offered at the highest level to the same customers that were already shopping at the garden center before a rebate program was put in place. The best customers end up spending less and the garden center takes in less.

Companies should have developed programs that showed their appreciation to the most loyal/profitable customers before implementing the no-brainer fallback of offering discounts in a program designed to measure “loyalty”.

“In the real world, paying someone to be your friend is called prostitution.”

There has to be a better way.

How about a loyalty program without a rebate? Here’s what it could entail…

What people know they will receive:

  • weekly/monthly/bimonthly enewsletter (depending on company enews skill )
  • no need to keep receipts
  • invitations to member only special events
  • extended warranty on trees and shrubs
  • early notice of events, classes, promotions
  • birthday certificate
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 program
  • postcard mailings according to their spending pattern and interests
  • gifts sent according to spending plateaus

Don’t just tell people what they’ll receive, surprise them now and then.

Years ago at The Fall Event in Portland, Michele Miller explained why word of mouth you attempt to buy is inferior to word of mouth you earn.

Providing people with gifts they didn’t expect and not sure if or when the next one may arrive creates a sense of excitement. How many loyal shoppers do you believe rush to tell their friends about new “points” they have stored in some garden center loyalty program? Compare that to the probability of people telling friends about the unexpected gift they received from their favorite garden center.

Each center can determine plateaus depending on spending levels and gift ideas which can change from month to month. Review what the most loyal shoppers purchase then connect to their personal interests. Vendors or other local retailers may want to participate. After a season of large plant purchases, a coupon sent to a really big spender for a massage would be well received by the customer and a plus for the spa.

A loyalty program that shifts the focus from a company hoping customers will be loyal to them, to a program that proves the company is loyal to its best customers, isn’t as easy to manage as simply offering rebates or points that convert to discounts. The benefit though is the relationship between company and customer moves from bribery to appreciation, the real measurement of loyalty.

So… do you want a program where customers are paid in hopes that they will remain loyal or one that shows customers how much you appreciate their business? Showing someone how much you care creates a relationship where people feel appreciated, the first and most important step at creating true loyalty.

Just ask your dog.


Got questions or need more information about your marketing programs?

Give Robert a call or email!
Robert Hendrickson
Cell: 443-255-8282

Robert Hendrickson is founder and a service provider for The Garden Center Group and our "guru" for how to best tell your story.



REMEMBER: Your interaction (by phone and email) with Group Service Providers such as Robert Hendrickson, Steve Bailey, Sid Raisch and Jean Seawright, are included in your retainer!

For additional reading there are two other blog posts related to this subject.

Loyalty Programs - To Drive Sales & Customer Engagement

Loyalty - Group Sharing Footnotes

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