How do you quantify loyalty?


A few weeks ago, I heard that one of my favorite retailers was planning to introduce a customer loyalty program. They didn’t provide any details at the time, but I recently came across a page on their website that explains how the loyalty program works.

In short, you can qualify for the loyalty program benefits by doing one of two things:

– Spend more than $XYZ per month, or

– Place multiple orders every month, regardless of total dollar volume.

The first option makes sense to me, since you want to reward customers who buy a lot of products from you. However, the second option is counterintuitive, since it encourages people who don’t spend a ton of money to split up their purchases into more transactions than necessary. This costs the customer and the retailer more time and money.

A better approach is to define loyalty based on total spending amounts over time (like in the first option above), and then offer a second qualifying method for people who are regular customers but simply don’t have a need to spend that much. For instance, you could allow someone to qualify if they place at least three orders during a six month period. That way, you’re encouraging people to shop with you regularly, without driving them towards buying patterns that waste their time and yours.

No Responses Yet to “How do you quantify loyalty?”

  1. Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s