By: Eric Ramberg
The New York Times featured an interesting article on August 4th about rewarding consumers just for entering a store. Yesterday, another article was published in the St. Paul Pioneer Press about Best Buy implementing offers through the Shopkick app that can be downloaded on IPhones. This will enable the consumer to get points and discounts just for walking in the door. As loyalty programs evolve, I guess we should expect this to happen. It reminds me of some early stage sales channel incentives we developed way back when: we called them 'steps to the sale' and the idea was, if you incent a salesperson to follow the prescribed path towards closing a deal, they would be more successful. Points were earned for specific actions like: fill out the prospect profile, research their business, get an appointment, make a proposal, close the sale. All good activities and from a correlative perspective, would probably lead to a new sale.
Miller's article suggests that the retailer who awards loyalty points to consumers for simply walking in their store might see an uptick in sales. My view is this is yet another example of new technology in search of a problem.
The psychology of sales is still mostly art and not enough science. Why do people buy? Some loyalty experts suggest the reasons are more emotional than rational, so consideration still must be given to the product's benefits and perceived value, the customer experience created by the retail store, and the interaction of customer and staff.
What is interesting about the approach is the information about buyer behavior it might generate - learning more about the factors that influence buying decisions is always welcome.
But for those retailers who expect this to immediately change their quarterly numbers, remember the old football adage: pushing the ball over the goal line is the only way to earn points. Getting close isn't good enough.
Links
NYTimes Article http://bits.blogs.nytimes.com/2010/08/04/score-loyalty-points-for-walking-in-a-store/?emc=eta1
St. Paul Pioneer Press http://www.twincities.com/technology/ci_15795609?nclick_check=1