business news in context, analysis with attitude

Interesting column in the Seattle Post-Intelligencer by writer Bill Virgin, in which he notes that despite the fact that there was a certain amount of outrage a few years ago surrounding privacy concerns connected to loyalty marketing cards, it has ended up being much ado about nothing.

Virgin writes that the cards have become ubiquitous despite concerns because consumers learned to live with them, figured that retailers weren’t learning anything about them that wasn’t public knowledge already, and realized that they need the cards to get the best prices. And besides that, these same consumers often had loyalty cards for numerous stores and used them to cherry-pick products, meaning that they weren’t really loyalty cards at all.

These days, Virgin writes, the challenge for retailers is to figure out how to attach special products or services to the cards so that people actually will be more loyal to specific stores.
KC's View:
The fact is that many retailers have dealt with these cards in ways that have been all wrong.

They used the cards as a way of communicating price cuts, turning them into yet another communications vehicle for coupons…and nothing more.

They rarely used the specific data generated by the cards to target customers in any sort of meaningful way. Not only wasn’t the data clean in many cases, but it was virtually irretrievable.

Finally, they forgot the most basic value – that real loyalty marketing proves to the consumer that the store is loyal to her, not the other way around.