Bloomingdale’s Discovers Loyalty?

Posted on 07. May, 2012 by in Customer Recognition, Loyalty

Even after your corner pretzel vendor discovered the value of nurturing loyalty, venerable, blue chip retailer, Bloomingdale’s only recently announced a loyalty program: the Bloomingdale’s Loyallist!

 The Program in Brief

Let’s quickly review the “program”….  For every dollar a Loyallist spends (in-store, online or at an outlet) he or she receives one point.  But if they use a Bloomingdale’s credit card for the purchase, they receive three points per dollar spent.  And now the benefit: for every 5,000 points accumulated the Loyallist receives a Reward Card worth 25 dollars!  If you’re one of Bloomingdale’s best customers (spending $3500 or more annually) you’re bumped up to receive four points per dollar spent and you’re also issued a Bloomingdale’s Reserve card.

So, has Bloomingdale’s truly discovered loyalty or is this a missed step?  It’s actually not a loyalty program at all!  What it is is a simple frequency program.  Just as your local donut shop offers your 13th dozen free, Bloomingdale’s is attempting to stimulate repeat purchase with a discount coupon.  There are at least two serious flaws in this retailer’s thinking.  First, repeat purchasing isn’t loyalty.  Loyalty is something far more…  It’s the emotional glue that “sticks” customers to a brand and the emotional passion that motivates customers to go out of their way to endorse and recommend a brand or product.  Second, I’ve repeatedly chastised marketers who “reward” their best customers with discounts.  That’s simply undermining their own bottomline!  It has little impact on increasing overall spending and discounts the dollars already being spent!  In addition, it destroys part of the brand’s cachet by suggesting its merchandise was overpriced to begin with!

 What Were They Thinking?

Bloomingdale’s COO, Tony Spring, misguidedly stated, “Through this new loyalty rewards program, Bloomingdale’s is reinforcing our commitment to our customers.  We want to recognize those shoppers who continue to be loyal to our brand and engage new shoppers by offering a very distinctive program.”  But I’d counter: there’s no immediate outreach to this program (since a customer has to register to participate; it’s not distinctive (even your pretzel dealer will give you a punch card); and it’s a seemingly frivolous ‘reward’ (only ½  a percent discount.  Consider that Kohl’s Cash offers that retailer’s shoppers a $10 coupon for every $50 spent (when the program is in effect).

And so, not only is Bloomingdale’s late to the game, but they don’t appear to really understand loyalty, if that’s what this program is truly about.  Neiman Marcus (a much more direct competitor than Kohls) initiated a much more effective loyalty program more than twenty years ago with the creation of its Inner Circle.  The Inner Circle is all about recognition, a motivator that truly speaks to the caliber of shopper Neiman Marcus wants to retain.  The status and appreciation conferred by the perks of the program are likely to be much more effective in strengthening customers’ affiliation with the store.  Rather than discounting high-value customers’ purchases (with discount coupons) the Inner Circle is all about recognition: special shopping nights; privileged treatment as a repeat shopper; even courtesy valet parking!

So, to sum up; Bloomingdale’s Loyallist program – an embarrassment to a statured brand; the Neiman Marcus Inner Circle a true loyalty-builder.  No doubt some frequency agency gave Bloomingdale’s a pitch…too bad Bloomingdale’s didn’t retain a loyalty consultant….

 

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