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Premium loyalty is a major trend in today’s loyalty market. Examples abound of software, creative services, and retail being mediated through it. This may have been an unthinkable thing just a few years ago, but now, it’s a normal option that consumers have.
One vendor working in the premium loyalty space is Clarus Commerce. Though it has gone through changes over the years, including a recent acquisition by Marlin Equity Partners, its vision for premium remains strong. To learn more about the company’s strategies, recent activities, and aspirations, Loyalty360 recently spoke with Tom Caporaso, Chief Executive Officer for Clarus.
“What we’re seeing is that loyalty’s changing,” Caporaso said, “and we’re doing something different than some of the others, and it’s probably more needed than ever, as Prime and some of the other programs out in the market are doing some different and innovative things. We’re trying to do that for retailers, as well.”
He continued, “It’s not the old, tried-and-true loyalty. Clarus seeks to do new things. We currently don’t do any points programs. We’re doing more real-time benefits, either cashback or shipping or return-shipping. More and more, what we’re getting asked for is the experiential benefits around either exclusive deals and offers or exclusive experience. It’s about trying to make the customer feel special.”
Caporaso admitted that transactional benefits will have a place in loyalty for the foreseeable future. However, he said that Clarus is trying to offer these transactional benefits in real time, rather than through points-redemption models. The company doesn’t want customers to have to wait to reach a threshold and receive rewards at a later date.
To illustrate Clarus’ approach, he said, “I’ll give you two examples of programs that we power. One is a brick-and-mortar retailer in the northeast called Bob’s Stores. Their experiential benefit is in-store. There’s a VIP pricing for their consumers that are in the program. They have a specific line that they can go to, so they feel like a VIP, essentially. They get a better price and a better experience in checkout.”
He continued, “The other one is a retailer that we work with on the omnichannel side, a multi-title cataloguer that sets up 1-800 numbers so there’s no call waiting time or handle time. [Customers] can go straight to the line and use all the discounts and offers that are in the program. So slightly different, definitely, from a retail perspective and channel perspective.”
Loyalty360 asked Caporaso what metrics Clarus looks at when transitioning a company from a traditional loyalty program to a premium one. He replied, “From the top of the tunnel, it’s how many actually convert into the program. From the backend, the typical KPIs from any retailers: ‘are you driving repeat purchases?’; ‘are you driving average order value?’; ‘are you seeing them be more brand-loyal by either site visits or more purchase?’”
“Those are the standard things,” Caporaso said, “but the first piece is really, ‘Can you build a program that’s compelling enough and interesting enough to actually get them to convert and pay a fee for that program?’ I think that’s where retailers, as they think premium loyalty, say, ‘Should we charge our customers? We have a free program. Do we need a program with a fee? Will a customer pay for that?’ Our position is that if you have a program that answers a lot of those consumer pain points, has those instant transactional benefits, and then weaves in experiential value, yes, they would.”
Caporaso said that Clarus is looking to work with more brick-and-mortar retailers—a space beset with challenges. Asked how premium loyalty could assist these brands, he said, “With discounts, it’s a bit of a race to the bottom. As you think about premium loyalty, discounts have to be a part of it, but if you do it right and you mix transactional discount benefits with experiential benefits—if that’s exclusive deals or in-store experiences or events—then brands can be able to pull back on some of those discounting-to-all offers.”
He said that this type of structure is especially important to small and mid-sized companies. The issue, he said, is that companies have to compete with Walmart, Target, Amazon, and other huge retails, who have wide margins in which to work. To have any chance against these giants, Caporaso argued that brands have to differentiate with experiential and personalized benefits. “Those are the types of things that I think retailers can do really well,” he said. To learn more about Clarus Commerce, visit: https://www.claruscommerce.com/
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