Assignment:
CREATING A LOYALTY PROGRAM AT THINGS REMEMBERED
Things Remembered provides personalized gifts for special occasions. It has catalogs, physical stores, and an online store. It provides personalization through embroidery and engraving of initials, words, and designs specified by the customer. Although successful, the company noted the challenge of its positions:
The strength of business such as Things Remembered can also become a challenge. Customers see the Things Remembered brand as being all about occasions. That is good, because the brand is about occasions. However, many customers begin to limit the occasions and think that it is just about anniversaries, graduations, Christmas and weddings.
Earlier in the decade, Things Remembered was struggling because its repeat purchase rate was lower than other retailer's rates. Its goal was to create a marketing program that would get customers to buy at Things Remembered (a) for a wider set of occasions, and (b) more frequently. The solution was a loyalty program called "Rewards Club." The key features of their original Rewards Club were as follows:
• Onetime $5 membership fee
• Earn $10 rebate for every $100 purchased
• Automatic tracking and distribution of reward certificates
• Certificates good for 90 days
• $50 limit in rebates earned in a given month
• One transaction every 18 months required to maintain membership
To help encourage internal buy-in program, Things Remembered gave store associates incentives to enroll customers as members. Initial results were positive, with enrollments at targeted levels. However, one concern is that they enrolled more low spenders (spend less than $50) than high spenders (spend more than $100).
Discussion Questions
1. Define loyalty as you understand it from the text. Do you think the original Rewards Club at Things Remembered helps create loyalty? Explain.
2. Beyond earning $ for purchases, can you think of other aspects that could be added to the company's program that would enhance loyalty?
3. The marketing program was designed to achieve two goals, namely, increasing the number of occasions for which consumers purchased from Things Remembered, and increase the frequency with which they purchased from Things Remembered. Which goal is best achieved by the original Reward Club? Explain?
4. Design a marketing program from the ground up to achieve the goal of increasing the number of occasions for which consumers think of and purchase from Thins Remembered. Note: It may or may not involve a rewards program.
5. What explains the fact that lower spenders are more likely to enroll? Is this a good or bad thing? Explain.