Just Rewards

March 31, 2010
Written by Michelle Brisebois
Canadian Tire money was one of the first loyalty programs launched in Canada. The premise is simple – reward people for shopping at your store and structure the reward so that it has to be used to buy more stuff in your store. When loyalty programs are executed properly, they secure sales and delight your customers. When they aren’t well thought through, they can be expensive exercises in rewarding customers for doing what they would have done anyway. It’s a slippery slope.

reward
 Loyalty cards can take a variety of shapes and forms and reward shoppers for doing exactly what you want them to do: shop at your garden centre.

Canada is a market ripe for loyalty programs. According to a survey conducted by COLLOQUY research released in August 2009, almost 94 per cent of Canadians said they belong to at least one program. This statistic reflects a growth in the participation rate for loyalty programs of nine per cent since 2007. Activity across all demographic segments is up, except for the affluent segment, which stayed flat at 96 per cent participation. Millennials (aged 18-25) were the fastest growing segment, climbing to 87 per cent, up 11 per cent over the two-year period. Women and seniors nudged up slightly, and consumers in French Quebec measured for the first time at 92 per cent participation. Budget-conscious consumers impacted by the recession are credited with accelerating the interest in loyalty programs. This same survey confirmed that 21 per cent of consumers consider their participation in retail rewards programs to be “more important” as they seek to stretch their household budgets in the recessionary economy. So if customers want to feel the love, how do you structure a program so it’s a win-win for both you and the patron?

One way to set up a program is to reward customers more for spending more. Ken and Susan Mosher of Oceanview Garden Centre and Landscaping in Chester, N.S., have recently introduced a loyalty club called the Plant Crazy Club. Customers earn one point for every undiscounted dollar spent at Oceanview. Points are worth one to three per cent of the purchase amount, depending on how high the points accumulate. For example 100 points is worth $1 but 1,500 points are worth $30. There is no expiry on the points, and they can keep growing from year to year. Ken Mosher of Oceanview confirms, “The more they accumulate the more their points are worth. Big spenders can get the maximum percentage quickly with large purchases and small spenders have to hold theirs longer to get the same value. Our goal was to get customers to make Oceanview their first choice when it comes to their everyday purchases in an effort to grow their points. We wanted to get the larger share of their disposable gardening dollars.”

At Cindy’s Home and Garden in Kingsville, Ont., customers who carry a Cindy’s Club card get a stamp for every $25 they spend. When the card is full, customers get a $50 gift certificate to use in the store. Club members also get a 20 per cent discount on their birthdays, free delivery and invitations to special events. “We find that it does encourage customers to add on to their purchase to make sure they reach the purchase amount to qualify for a stamp,” says Sharon Stephenson, general manager at Cindy’s Home and Garden. “We’ll tell them that they’re close if they’re within $5 of getting a stamp and that often spurs them to add on a small item to get them to the $25 level.” Both Oceanview and Cindy’s offer club membership for free.

Brantim Country Garden Centre in Ottawa has chosen to charge $10 for membership into their Brantim Rewards Program. A portion of the membership fee is donated to CHEO (Children’s Hospital Eastern Ontario) and Joanne Smith of Brantim believes this encourages customers to join the club. “We donated $1,500 to the hospital last year from club memberships,” Smith says. The memberships are only good for one year and the customer must renew each year, paying another $10 fee. Membership gives customers a five per cent discount on all Brantim products and services (excluding gift certificates) and an additional five per cent discount during advertised “Double Discount Days.” Members receive regular newsletters and free admission to workshops and seminars. The practices of these garden centres make clear that businesses can be creative with their programs in order to suit their clientele. Keep in mind that structuring your loyalty program is only part of the equation – how you promote it can make all the difference.

Most businesses find that there are three key areas in which to focus the communications strategy: on store signage, through the website and via front-line staff. “We posted 8.5 x 11 signs throughout the store encouraging customers to sign up. The sign at the main cash area is most effective because it caused the customer to ask ‘what’s this all about?’ This coming season will require larger signs to build the branding and build the membership in our very small market,” says Mosher of Oceanview Garden Centre and Landscaping. At Cindy’s Home and Garden, they’ve also added social media into the mix along with traditional marketing methods. “We promote Cindy’s Club in our catalogue, on our Facebook page and website. Word of mouth from existing customers is good too. Our most important strategy is engaging our store team to promote the club. We don’t have ‘cashiers’ at Cindy’s, we have ‘personal shoppers,’” says Stephenson. The garden centre uses an incentive program structured so that the employee who signs up the most new club memberships gets a $100 gift card to spend at the store. “We purposely position it as a rewards program because we want people to see it as a privilege – something special,” shares Stephenson.

Branding the program with a catchy name can also help to keep your business top of mind as well. Oceanview has dubbed their loyalty program simply “Plant Crazy.” “Customers are drawn to the name and they seem to be proud to carry the card with them. Customers come to the cash and say ‘I’m Plant Crazy,’ says Mosher. Cindy’s Home and Garden and its club are named after the woman who started the business 15 years ago. Calling it “Cindy’s Club” adds that personal touch. “We all get called Cindy,” chuckles Stephenson.

Perhaps the biggest boost a loyalty program will give you is a connection to your customers. By collecting their contact information you can now have ongoing conversations with them. Special offers, workshops and events are all viable perks to make your most loyal customers feel extra special. Smith of Brantim Gardens sums it up perfectly: “Treat your return customers like gold and you’ll always be in business.”

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