Imagine conceiving the idea way back in 1896 of a loyalty program with stamps you lick and put into a book. People would have thought you were crazy!
Frankly, I hate sales and loyalty programs. Just give me your best price! Safeway and Albertsons (owned by Safeway) are the absolute worst. There is the regular price. The price for “members.” The special digital coupon price where you have to “clip” a coupon in the phone app. Don’t forget to “clip” it before you arrive at the register, too. There are the specials that appear in the print flier starting on Wednesday that don’t seem to be in the special “member” prices or in the digital coupons.
Half the time their promos don’t work, either. They had Atlantic Salmon “SALE” signs all over the meat department pitching $4.99 per pound. It rang up at $10.99. I had to fight tooth and nail to get the $4.99. I had to walk the cashier back to the meat department to show here the 20 different “SALE” signs they had plastered all over the place. She had to get the meat department manager to ring up the correct price. The line got real long and people were really PO’d at the wait. Even the miserable cashier was mad at me for not just going with the $10.99.
It’s all way too much bother except I do it now that I’m retired and want to save a few bucks.
I still hate shopping and I HATE loyalty programs.
There's something to be said for loyalty programs. I say this with the caveat that I participate in very few.
-It's much less expensive to advertise to customers you already have. It could be worth it to give back some of those savings.
-In some businesses, there is a cost to add a new customer to their systems for account information such as delivery addresses, etc. Someone has to take the time to enter and maintain the store systems with customer account information.
-In some industries, there's a cost to educating customers about specific business practices such as when things are in season, optimal shopping and ordering days, handling and care of items they're buying, how to perform maintenance on items, servicing schedules, when to call for help (and when not to). It is worth it for a company to reward those who already know the business practices and don't need to be walked through them. I've seen discounts as high as 20% for customers who don't need help from staff.
-A company benefits when their regular customers get a heads up about new items or items coming back into stock. In different places I worked, we had emails that would go to some of the regulars to give them a heads up that we had seasonal items back in stock, especially if the items were in high demand but in limited availability. The customers greatly appreciated not losing out on their favorite items that they bought year after year.
-A business eats part of the cost of processing returns and minimizing that with a rewards program helps. If I was in parts supply for technical equipment, I'd gladly give discounts to customers who knew exactly what they wanted and didn't need my staff to check and double check everything for them to make sure they have the correct components and also know how to install them properly.
-Reward programs are often designed to distinguish between bulk sales versus individual sales. If I sold 100 items in four weeks to untracked customers, how do I know if it was one customer coming in and buying what was available on the shelf (where I could reach out to them to see if I could get them larger quantities) or if was different customers coming in and buying them? The market basket reports at the cash register transaction level will show me how many were bought at a time and what they were purchased with but won't tell me who bought them if the customer paid cash or used gift cards. Replenishment systems will see a spike in sales at a store and send more product but I've witnessed where the sales dropped off because it wasn't a multi-customer trend but one or two customers coming in and buying large quantities for a specific event. The store later had to mark down the price on the excess items to sell them before the expiration date. Multiply that across multiple items in multiple stores and it becomes a significant problem. A loyalty program can help clean up such data and factor into the store replenishment calculations.