Opening up its loyalty program to allow all of its customers to reap the benefits is a momentum-changing strategy for Nordstrom.
Since the company launched Nordstrom Rewards 2.0, it has sparked considerable customer engagement and increased customer loyalty.
Loyalty360 caught up with Nordstrom spokesperson Dan Evans to learn more about this game-changing strategy.
What factors prompted the creation of Nordstrom Rewards 2.0 and what are your goals for it from a customer engagement/customer experience perspective?
Evans: Nordstrom Rewards is an important way for us to establish new, as well as strengthen existing customer relationships. Our customers have long-asked for more flexibility with Nordstrom Rewards and now they’re able to earn points no matter how they choose to pay. Rewards customers are our most loyal spending four times more annually, yet only one in five customers are part of our program. The opportunity to reward all of our customers is big and, with the expanded program, our goal over the next 12 months is to add five million customers, which, in turn, we hope will enable us to better engage with our customers.
When did it launch and what insights were gleaned from the initial loyalty program that were leveraged here?
Evans: The expanded Nordstrom Rewards launched officially May 19 and, in just over two months, we signed up over 1.5 million customers. While both rewards programs enable customers to earn points, we knew the enrollment process for the new program had to be simple and mobile first, requiring only an email and mobile phone number.
What has customer feedback been like regarding Nordstrom’s loyalty program, and how important is it to listen to your customers?
Evans: Over the years, we’ve found that good things happen when you let the customer be your guide and their feedback and input is important to us. Our goals are simple: To serve customers better, be relevant in their lives, and build lifelong relationships. Nordstrom Rewards is an important direct link to our customers that strengthens that bond.
What does CX mean to Nordstrom?
Evans: Our No. 1 goal every year is to improve customer service and delivering a great customer experience – in a store or online - is at the heart of our business model.
How do you define customer loyalty and has that definition evolved in recent years?
Evans: Customers have more choices today than ever with how they choose to shop and their definition of service has evolved. We recognize that as their expectations increase, so do our opportunities to stay relevant, which will help us earn their loyalty. We know our rewards customers are our most loyal customers and we need to continue to work hard to deliver an experience that is compelling and relevant and reflects how they want to shop. While the definition of great service may have evolved, our commitment to happy customers hasn’t.
There is a lot of talk about customers changing, how do you feel customers are changing and how are you adapting to that change? Is this just the case for your brand or vertical? Or is this affecting everyone?
Evans: Retail is an industry where change is constant and, as expectations increase, so do our opportunities to stay relevant to our customers. What defined great service just a few years ago may not today and it’s dependent upon us to make sure that we’re providing the best customer service experience possible for our customers.
How do you measure customer experience loyalty and how do you keep up with those metrics?
Evans: We have approximately 4.7 million active Nordstrom Rewards cardholders as of the end of FY 2015. We know that they are our most loyal customers and, on average, shop with us three times more and spend four times more than non-members. The expanded Rewards provides a new opportunity to engage with customers and, while it’s too early to be able to know, we’re been pleased with the response from customers so far.