Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

New generation shopper loyalty program breaks free from me-too VIP / loyalty cards

Mark Fletcher
May 15th, 2013 · 9 Comments

For some time I have thought that points based VIP / loyalty cards offer retailers little differentiation. Besides them being in use in many retail businesses, I have felt there is a real doubt among shoppers as to their genuine value.  They are decades old after all.

FlyBys and Everyday Rewards are the market leaders in Australia and they educate shoppers that they need to spend thousands to get even a small reward. No matter how much small business retailers might say their program is different, if it’s points based it will be considered to be the same as these programs and offer similar value.

Shoppers are fatigued by loyalty programs. Some doubt their value. Others are sick of carrying cards. Others don’t like the promotions sent.

Retailers launching a VIP card today rarely offer anything new. Too often they reward shoppers for average behaviour.

It was with this background that I got involved in a very different approach to shopper loyalty. I wanted something that got shoppers behaving above average so that my business performed above average.  I am fortunate to have a software company through which I could play with my ideas.

Around a year ago through my software company I started work on creating a front-end approach to shopper loyalty, an approach that did not use points or require shoppers to carry cards.

In February this year I started a secret trial in one of my newsagencies and soon thereafter expanded this to a second newsagency. now, three months later I have an excellent set of data showing shopper behaviour. The data show how the new approach to loyalty, called Discount Vouchers, changes shopper engagement on the shop floor – driving basket depth and margin dollars banked from shoppers.

More important, Discount Vouchers give me a point of difference to the decades-old VIP and loyalty card programs. This point of difference is driving word-of-mouth and generating its won traffic.

I have personally had shoppers tell me how their behaviour has changed because of the Discount Vouchers. In one case, two months in, we won a customer who will spend $1,200 a year solely as a result of this program.

I wanted to trial it in secret as I was not sure how such a radical approach to shopper loyalty would work in a newsagency.  Now, three months on, and comparing my own experience to the experiences from trials in three non-newsagency retail businesses, the results are the same. Shoppers love it.

From a retail management perspective I control voucher value and the items on which the value is calculated.  I also control what can be purchased using the voucher. I can also change these business levers at any time without a need to retrospectively change past vouchers.

There is no paperwork for shoppers and no paperwork for sales staff. This program is easier that VIP and loyalty cards, it saves time.

When shoppers redeem a voucher we gather details to go in the running for a monthly prize draw – harvesting contact details for future marketing.

Having run a VIP / loyalty card program and other loyalty programs, I am confident that in Discount Vouchers I have a point of difference appropriate to today’s shopper and able to give me a competitive advantage in a world of shopper fatigue with VIP / loyalty cards.

18 likes

Category: Newsagency benchmark · Newsagency management · newsagency marketing · newsagency of the future

9 responses so far ↓

  • 1 Greg // May 15, 2013 at 6:16 AM

    Mark can these vouchers be used as a replacement for the magazine club card and greeting club card, as we use these in our newsagency to drive sales which does work.
    Greg

    0 likes

  • 2 Mark Fletcher // May 15, 2013 at 8:49 AM

    Greg, when I started the trial in february I stopped the magazine club card. In the first week we had customer complaints but these stopped as they realised the value of the new program in return for greater loyalty.

    We still run the card program as that is handled by Hallmark at the moment.

    0 likes

  • 3 Garry // May 15, 2013 at 3:05 PM

    Hi Mark,

    Who do we talk to about this?

    0 likes

  • 4 shauns // May 15, 2013 at 3:26 PM

    Mark will this be a NewsXpress set up or a Tower set up ?

    0 likes

  • 5 Jenny // May 15, 2013 at 3:34 PM

    So Mark have you ditched the magazine loyalty card in favour of this discount voucher or are you running both?

    0 likes

  • 6 Mark Fletcher // May 15, 2013 at 4:18 PM

    Nothing to do with newsXpress. It’s available in the Tower software now. Version 2.5. All Tower newsagents have access to it for free.

    Jenny, as noted above, yes. I have felt for some time that newsagencies need to lead in the loyalty stakes if we are to drive better shopper engagement.

    1 likes

  • 7 shauns // May 15, 2013 at 4:25 PM

    ok I will have a look at it , we have been thinking of doing something different because we gave the magazine cards a break awhile ago .

    0 likes

  • 8 shauns // May 15, 2013 at 4:47 PM

    their you go it is all on the Tower blog , i have not read it for ages and see i missed out on something

    0 likes

  • 9 Jenny // May 15, 2013 at 4:47 PM

    Man! All my nagging the staff to push the the magazine cards, and now something better!
    It probably isn’t nice to say but it’s
    funny how some of the customers that use the mag card religiously are the customers that I find really annoying. These customers will go nuts with discount vouchers.

    1 likes

Leave a Reply

Your email address will not be published. Required fields are marked *

Reload Image