With the holidays in the rearview mirror, I’ve been looking at what I purchased for my kids, family and friends. It becomes quickly apparent to me that in going through the email confirmations and other paperwork that there is definitely a pattern to my purchases: Barnes & Noble, Kohl’s, GameStop and Walmart. The pattern then repeats as I scroll through the list.
So were these the only places that had the items folks are asking for? No. Were these the places that had the best prices? Not necessarily. Did I buy everything at once to consolidate my shipping? No, I most definitely did not, though I’m sure the UPS and Fed-Ex guys wish I had.
What all of these stores had in common was that they were competitive on price, and in three of the four cases I am a member of their loyalty program. The sales incentives range from retailer to retailer: Walmart prides itself on a straight up low price and free pick-up in store, while Kohl’s, on the other hand, is the pinnacle of "dynamic pricing" and revolving promos and opportunities to earn bonus dollars. Barnes & Noble, along with GameStop, had some good prices and free shipping for their loyalty members.
At this point, you may be asking yourself what my personal shopping habits have to do with college and university retail. Good question.
For almost 10 years now I have promoted and discussed loyalty programs with retail professionals in higher education. Many of them were forerunners in loyalty, offering punch cards that rewarded you with your fifth trade book purchase at a deep discount or a free t-shirt on your birthday. These were very low tech and manual programs for these stores. But they found that the time and effort was well worth the cost of what they were providing, in that it differentiated them from their competition.
Today, everyone can run sales, everyone can have promotions, and everyone can have a loyalty program.
What can set your store apart from the competition is the ability to tie these strategies together and provide each of your customers with a personalized experience. These are ones that precede the sale and resonate after the sale. Engaging the customer on a regular basis to encourage them to shop more frequently and building your relationship with them.
As long as the only measure is price, stores will struggle to complete with Amazon and the ‘Big Box’ retailers. Competitive pricing is a strategy we encourage our partners to adopt, but most collegiate retailers at best will have lower/equal prices a small portion of the time. But loyalty points, promotional offerings and on-campus convenience can be key factors to change how your customer views you and whether to order from you instead.
It can be, but luckily, the tools available to stores are so much more advanced than they were just a few years back.
Systems now allow you to create sales events days, weeks or even months in advance. These sales can be store-wide or they can be selected categories, vendors or products. They can be offered in-store, online or both.
So if everyone can do this, what sets you apart? Another good question.
What every good retailer knows is their customers: their preferences, habits, trends, etc.
“The path to loyalty-building begins with customer knowledge,” according to Chris Doherty, vice president of branding and consumer consulting for Daymon Worldwide. “Establish a means for identifying your customers at the point of sale. That provides a way for you to understand your customers, to learn what makes them unique and motivate their behavior. You can then leverage that wealth of information to personalize your interactions and demonstrate you value their business.”
In addition to capturing data from your customers when they purchase from you (in-store or online), there are other ways to determine what they desire and are interested in. Many stores conduct focus groups of their key customer groups. Some send out surveys. Others still use social media and personal interactions with customers to gather information. The key is to communicate with your customers on a regular basis and use multiple strategies/tools to do so.
Another important aspect of a loyalty program is to make the reward(s) reasonable to reach in a reasonable period of time. The trick is to balance making them attractive enough to your customers to change their behaviors, but not so generous that it costs you in profitability.
Tiered programs can create add-on sales as customers get close to moving to the next level in your rewards programs. Businesses with tiered programs note that customer visits increase as the consumer gets close to earning the next reward and/or level of status. It can also add another dimension to your sales and promotions; providing sales or discounts based on what a customer’s loyally status is. Tying discounts to loyalty also excludes people that don’t participate in the program. That’s a good thing, as many experts in this field agree that you do not reward non-loyalty customers.
Make sure your program, whatever it is, makes it easy to redeem points. Making a customer jump through hoops or wait to redeem will cause folks to drop out of the program when they finally reach a reward and don’t have a good experience collecting it. Ideally, customers should be able to redeem their points immediately when they are shopping, perhaps as a discount against a current purchase. We all respond well to immediate gratification, whether we admit it or not.
As with many things college and university retailers are called upon to do, loyalty programs and strategic sales plans are in addition to. However, as colleges and universities strive to differentiate themselves from one another by creating personalized experiences for their students (and prospective ones), so too can college and university stores. Tap into that synergy with your school to further your value-add as a part of the campus and your competitive position with your students.