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On the second day of the 2019 Loyalty Expo, attendees witnessed a session titled “The State of Customer Loyalty in Retail.” The session, moderated by Rodman Likes, Vice President of Sales for Formation, saw Lisa Erickson, Senior Director of CRM and Loyalty for Sleep Number, and Karen Szarvas, Director of Loyalty Marketing for The Vitamin Shoppe, discussing their vertical’s table stakes.
“As we all know, the state of loyalty in retail is a bit murky right now,” said Likes in his opening remarks. “Customers demand specific, individualized experiences in order to drive customer-lifetime value.”
To preface the conversation, he noted that a recent study found that the top ten percent of a given company’s customer-base spends three times as much as the average customer, while the top one percent spends five times as much. Further, the study found that 91 percent of consumers indicated that they felt greater loyalty to one or more brands than they did a year ago.
Likes asked Szarvas to share her marketing journey and name a moment in that journey in which she saw something within her organization that needed improvement. She replied, “When I came into the organization, they brought me on to help revamp the program [Healthy Awards]. They recognized that their loyalty program was not performing as well as it had in the past.”
Engagement was down, and it was Szarvas’ job to change that. She and her team spoke with stakeholders and performed consumer research and looked at other programs in their industry and others. They found that their brand was not rewarding high-spenders and moderate-spenders in a differentiated manner. “The one interesting piece we found was that customers are always about value. Certainly, engagement is important, but they also wanted that exclusivity. They wanted to feel special. They wanted to feel that they were in the know.”
This insight was embedded into the new Healthy Awards, so special benefits are available to the most loyal customers.
Likes then asked Erickson how Sleep Number’s instore associates help power the organization’s loyalty efforts. “For us at Sleep Number,” she replied, “it’s all about the instore experience. You really have to go in to experience the brand.” She noted that, in contrast to many other retailers, the brand’s website is devoted more to education than sales. As a result, the instore experience is king.
Erickson noted that it might seem odd that a mattress retailer has a loyalty program, given that individuals purchase mattresses infrequently. “It’s an engagement program,” she said. “We want to stay connected to [our consumers], because we know our insiders are our best advocates. What we’ve built is a way to stay engaged and make sure that every touchpoint they have with us is about engagement.” Erickson educates store associates to understand that the purpose of the program is to stay connected with consumers.
“There’s a lot of information in our program,” she said. “It’s not about spend-and-get, because how many mattresses can you buy in a year? It’s about helping them not only sleep their best but live their most healthy life.”
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