Being handcuffed to a shopping cart isn’t the best way to build trust. But, that’s how customers feel about so-called supermarket loyal shopper cards. That’s because the premise of the cards violates a basic principal of attraction marketing.
Two-thirds of a typical supermarket’s business is done by 20% of its customers, according to the Food Marketing Institute. In the years since loyalty cards first premiered in 1979, that ratio has stayed about the same. Retailers’ intention of building more volume from more customers has resulted in just getting roughly the same volume from the same customers at a discount–to the retailer.
Last year the Hartman Group surveyed 989 shoppers nationwide and found that while 85% of shoppers owned at least one of these cards, about a quarter had three or more. I have four. How about you?
Reward me with special deals because I’m a loyal shopper. Sounds like a good deal. And, it would be if that’s how they were executed. Instead, these cards are just another leash yanking at the customer for the self-interest of the retailer. In the good old days of Attention Marketing, that might have worked–for a while.
Knowing what I want and helping me find it forges relationship, opening the door to loyalty. What if a scan of your card upon arrival produced a guide to where things you want are located (since they seem to keep moving; another retailer self-interest trick) and maybe offer discount advisories on similar or allied products. Or, what if the card produced a report each month of purchases summarized by sodium levels, fat grams, etc. Helping means understanding; understanding happens when interests are aligned.
Attraction Marketing is about connecting, not directing. Attraction works on an emotional level where trust stands guard with its finger on the button; cross it once, and you’re toast. Loyalty is a two-way street. An authentic connection with customers built on mutual interest will attract long-term commerce. Deep discounting violates this principal; learn why after the skip.
Discounts draw knuckleheads like ice cream draws kids. The only difference is, kids are easier to deal with.
Would you rather pull people with discounts, or attract them with values? Discounts draw transactional bottom-feeders; here till you’re undersold. Relational (just two letters from rational) customers place weight in the concept of value; quality experience trumps price for them.
Discount promotions violate the value proposition because it communicates your lack of belief in your product’s value.
Could values-centric thinking explain why Very Vanilla Silk (a favorite in my house) costs about 20% more at Whole Foods than it does across the parking lot at Randall’s. Here’s a better example: the same olive oil costs 30% more at Central Market than it does down
the street at HEB. They come from the same distribution center on the
Attraction is about engagement and connection. How connected do you feel in the aisles of an HEB? Central Market, on the other hand, evokes a feeling of cool–you’re on the inside AND willingly paying a premium for it. There might as well be a sign out front reading, “Knuckleheads need not apply.”
Attraction marketing can help you put up a similar sign in front of your business. We can show you how.
[Originally published 6 April 2007]