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Loyalty Card Programs A Race To The Bottom

Published:02-15-2017

Canadian retail leader says product and service, not points and discounts,
are what builds true brand loyalty

Staff assisting customer at garden centre

If he could do it again, David Segal would never have offered a loyalty program for DAVIDsTEA, the brand he co-founded and built into a Canadian retail giant before his departure from the company in 2016. Segal, who will speak on the subject at the upcoming annual Dx3 Canada conference, argues that the emotional bond of loyalty has been diluted to mean discounts in exchange for data.


“The rebate loyalty program is a race to the bottom,” says Segal. “These so-called loyalty programs devalue your brand, train your customer to expect discounts, erode your margins, and ultimately fail to create loyalty.”


Instead, Segal argues, companies who want to drive true loyalty need to solve one of three key customer problems:

  • consumers’ lack of trust in corporations,
  • consumers’ lack of time to research products and services, and
  • consumers’ lack of engagement with a sea of undifferentiated brands.

 

Rather than focusing on points and rebates, Segal will explore ways that companies can respond to each of these challenges to build true loyalty and engagement during his session at Dx3.


For Segal, the passion is personal. During his time at DAVIDsTEA, the biggest driver of consumer loyalty – and the move that Segal credits with putting the company on top of a Leger Marketing customer experience survey – was a staff empowerment policy, which allowed in-store staff to do what was needed to correct a situation without requiring any approvals.


“Personalized customer service, incredible products, and ease of use – these are the true keys to loyalty,” says Segal.


Dx3 is a digital marketing, advertising, and retail conference held March 8 to 9, 2017, in Toronto, ON.
Other speakers at the 2017 event include:

  • Betsey Chung, CMO, BMO Financial Group
  • Ewan McNeill, Director of Customer Experience, LCBO
  • Frank Cutitta, Director of the Center for Content Analytics, HIMSS Media Lab
  • Lana Novikova, Founder & CEO, Heartbeat Ai
  • Lara Skripitsky, Head of Digital, McDonald's
  • Lars Petersen, Vice President, Business Optimization, Sitecore
  • Matt Bertulli, CEO, Demac Media
  • Megan McKee, Vice President, Consumer Card & New Business Development, American Express
  • Rick Neuman, CIO, Walmart
  • Rob Cameron, Chief Product & Marketing Officer, Moneris
  • Tony Long, Global VP of eCommerce Innovation, Kimberly-Clark

 

For more information, visit Dx3Canada.com