CSA Exclusive: Three experts give insight on maintaining loyalty
Top executives from Petco, Mastercard, and Hanes Brand are sharing suggestions on how to ensure customer loyalty in a challenging retail environment.
Chain Store Age recently spoke with members of Loyalty Innovators, a digital community for marketing executives and loyalty innovators to connect and share best practices, to ask their opinions about launching effective loyalty programs in the face of issues such as inflation and supply chain disruption. Following are forecasts from loyalty leaders at Petco, Mastercard, and Hanes Brand.
Andrea Mathews, head of customer engagement & loyalty, Petco
“The current economic landscape and supply chain challenges should lead brands to lean into personalized, targeted interactions and offers more than ever before. This will help retain the right customers and ensure they continue to feel valued by the brands they love, while also minimizing margin and inventory impacts of offering one offer to the entire customer base.
[Read more: Study: Retailers lose ground on supply chain]
“This is also a prime opportunity to evolve loyalty programs beyond the traditional discount, tapping into a better customer experience, early/exclusive access, and even extend the value with third-party partnerships with brands that their customer also engages with.”
Martin Benda, director of customer loyalty & engagement, Mastercard
“Maintain consumer loyalty while increasing price points. If loyalty is about price, then struggling brands cannot hold customers' loyalty while increasing price points. Therefore, loyalty programs always have to emphasize the non-monetary side of the relationship, such as switching costs.
“Factors such as personalization and individualism need to play a role for the customer to justify the need for the product and, therefore, stick around when the price has to increase. Also, beyond loyalty, if a price needs to be increased because suppliers are also increasing the price, it is a matter of education to really explain the reasons why.
[Read more: Survey: Winning retailers differ from peers in pricing strategy]
“Prepare for the predicted economic slowdown. Know which customers are profitable for your business and treat them well. Know which customers are not profitable for your business and do not offer anything of meaningful value, as it is money wasted. Loyalty programs can help uncover this insight and build the strategy to identify these groups of customers.”
Leo Griffin, global head of consumers, Hanes Brand
“I don’t believe that struggling brands will be able to raise prices and hold share, but this period also presents a great opportunity for strong brands to raise their share of wallet. As consumers face rising prices and a decrease in their disposable incomes, I believe they will reduce their trials of lesser-known brands and rely on brands whose values and voice align with their own and who deliver dependable quality and overall value.
“The most important element of loyalty is delivering products and experiences that are dependable and that consumers love. I expect brands to scale back their promotions of products that are in short supply due to supply chain constraints. Why discount what is in short supply?
“After years of being ‘boring’ the supply chain has become the leading source of competitive advantage for many brands, particularly those that – unfashionably – chose to own the majority of their supply chains rather than outsourcing to reduce their capital intensity.”