Clarus Commerce provides loyalty technology to retailers. It specializes in the design, development, and implementation of customized premium loyalty programs. It offers a scalable benefits infrastructure intended to help retailers deliver a range of rewards to customers. It also provides analytics, reporting, and strategic reviews. The company has been in business almost 20 years and works with upwards of 50 clients.
Recently, Loyalty360 sat down with Tom Caporaso, CEO of Clarus Commerce, to discuss subscription-based loyalty programs.
What are the core services that Clarus offers? Which is your strongest?
Clarus is a hybrid loyalty solutions provider offering turnkey, premium loyalty solutions for retailers. We combine our technology platform with a full suite of services and people to address a broad spectrum of loyalty requirements. From strategy to build to ongoing program management and optimization, we fully manage these customer programs, so our clients can focus on running their businesses.
From your perspective, what is the market asking for in terms of loyalty? How has that changed over the last 12 months?
The market is asking for something new when it comes to loyalty. What we’ve heard is that traditional loyalty programs all feel the same and don’t do much to differentiate brands. In the past, many retailers simply thought of loyalty as a marketing tactic that could be checked off. Now, more retailers are rethinking loyalty. Some call it subscription loyalty. Some call it membership loyalty. Either way, we’ve seen an increasing interest in these paid, premium loyalty programs over the last 12 months. These programs offer benefits that traditional programs can’t touch. Retailers see that these types of programs increase engagement and build real loyalty and brand affinity with their best customers.
What are some key ways you differentiate from your competitors?
First and foremost, premium loyalty is built into our DNA. We launched our first program almost 20 years ago and we’ve been focusing on the paid loyalty space ever since. Now, we power over 50 of these programs for our retailer clients. Secondly, our model is very different from traditional SaaS loyalty platforms. Traditional platforms require retailers to invest a huge sum of money into the loyalty program build upfront. Then they hope it will become profitable in a year or two. We not only build, manage, and optimize programs for our clients, but we do it without charging an upfront fee. We use a unique revenue share model with our clients where Clarus simply gets a portion of the program memberships fees.
So, we don’t make money until our clients make money. And neither party makes anything unless the consumer perceives and can immediately begin receiving valuable membership benefits and rewards. The better the program is, the more valuable it is to its members. And the better our retail partner does, the better we do. We truly have skin in the game and that’s why in addition to powering the actual technology platform, our clients also get full access to our company of experts.
From IT to Creative to branded customer service on behalf of our partners, we manage and constantly improve every facet of these programs. Another distinction that sets Clarus apart from traditional loyalty companies is our expertise and proven success with member acquisition. Our clients have come to rely on us as an extension of their team that is focused on attracting, retaining, and engaging consumers.
How do you define customer loyalty, experience, and engagement?
These elements all go hand-in-hand. At the end of the day, customer loyalty really comes down to a consumer’s willingness to engage with a brand again and again. And it’s a two-way street. We have to show the customer that we’re willing to invest in them as well. And in the Age of the Customer, this is more important than ever before. There is more competition than ever before, and consumers can literally get the best assortment, price, shipping, etc. at their fingertips. Transactional elements alone aren’t enough to build true loyalty. Loyalty comes from the value that retailers provide. It’s the result of a great experience. That’s what keeps them engaged.
What do you think is going to be the biggest trend in 2019? How does your company plan to address it?
I think the biggest thing we’ll see in 2019 is subscription entering the loyalty space a lot more. This recent Forbes article calls out how paid retail membership programs will gain steam. Retailers are looking at subscription programs like Spotify and Netflix and Prime. They’re realizing that subscription models change consumer behavior and have a positive impact not only with incremental revenue, but increased engagement all around. That’s why more and more retailers will rethink and revamp their loyalty programs with the subscription model in mind. We’ve already seen it happen over the past year with Lululemon, Wayfair, CVS and more.
This new Forbes article supports 2019 as the year of paid loyalty even further. These new programs require a much different skillset than traditional free programs. Clarus has the technology, people, and experience in place to build, manage, and optimize these premium loyalty programs. Whether retailers are looking to build their own premium loyalty programs or for an honest (and perhaps slightly different) viewpoint on how they’ve been thinking about loyalty, we’ll be a resource they can trust. Check out all my 2019 loyalty predictions in this blog post.
Conclusion
Our interview with Tom Caporaso indicates the truth of what many brands are beginning to recognize: transactional-based loyalty programs don’t create true emotional loyalty. These kinds of programs have their benefits, but for brands that want to create brand advocates and generate stickiness, subscription-based loyalty programs are probably better. They enable deeper personalization and offer the customer a great sense of satisfaction.