Very Important Pets
A VIP program that is carefully planned and executed encourages customer loyalty and helps retailers get to know their customers.
Moochie & Co, a Midwest-based chain of 12 full-size pet specialty retail stores, has tried several different types of loyalty programs since it launched in 2004. At first, Moochie & Co. distributed punch cards, but according to president Mike Dagne, the program was discontinued after a few years because it didn’t accomplish the store’s goals. Currently, customers sign up to receive periodic emails with specials (like coupons) or information (problem-solving ideas or new product information), and the company runs bounce-back coupon promotions (for example, buy a bed and for every $50 spent, earn $10 back). This year, Dagne will experiment with using coupons that have “must use by” dates. The goal is to drive sales during slower months, like January. He is constantly reevaluating the program and trying new things to make sure it helps increase profits while also rewarding loyal customers.
“What we’re doing right now is not where we’d like to be in the future,” says Dagne. Eventually he’d like to put into place a system that doesn’t require the customer to manage things at all–instead everything would be handled in-store. Customers would come in and give the salesperson their name, and the salesperson could look them up. That system would be integrated with Moochie & Co.’s existing program–”maybe, for every $100 you spend, you get $10, and then during these promotions the reward doubles,” says Dagne.
By constantly tweaking the program, the company can find what works best for its customer base and its personal brand message.
According to Theresa Neal, sales representative for RepeatRewards Customer Loyalty Program, tailoring your loyalty program to fit your store’s customer base is the right approach. For example, an email program may not be the best way to reach older customers; some of them may not have email addresses. “You’ll miss out on them, and they could be some of your best customers,” she says.
On the other hand, if a store’s customer base consists mostly of young professionals, the retailer might want to use social media or a program like Foursquare or Facebook Places for its loyalty program. According to Will Gallego, senior engineer at Buddy Media, many major retailers are using these new technologies to reach out to their customers and communicate with them, and pet retailers can use them to complement traditional loyalty programs.
For example, the store might say “Here’s our ‘Top Pet Friend’ of the week who has checked in the most” on Foursquare. Or they may tweet “Our new line of pet collars are in, come on in and pick one up for your pup” on Twitter. The store may even add a coupon to its Facebook wall, advertising a special deal fans can come in and claim. “And through all three, you can see exactly what your fans want and how you can react to that,” says Gallego.
Outsource or In-House?
Stores should also consider whether they should manage the program in-house or if it makes more sense to hire a loyalty program expert. Neal says many retailers try to do it themselves because they mistakenly believe hiring an outside company will be very expensive, but it doesn’t have to be. For example, RepeatRewards offers loyalty programs starting at $59 a month, with no start-up costs or contracts to sign.
An outside vendor can ensure the store complies with the laws regarding email programs or mailing programs. It can run mailing lists through the US Postal Service’s change-of-address software and can track open-rates and opt-out information on email programs.
Maintaining a loyalty program in-house can be time consuming and complicated. “I just had someone call the other day who has gathered 150 names so far, but hasn’t done anything with them because she is so busy going about the day-to-day [work of running her business],” says Neal. Customers are going to lose interest, because they signed up but haven’t received anything–which definitely won’t improve customer loyalty, she explains.
The information retailers gain from loyalty programs can be used to reward loyal customers, acquire new customers, increase the spending of existing customers and shift spending to higher margin products–but retailers need to take the time to think about how a loyalty program can best serve their store and customers.