By: Ray Chelstowski / Hilton Barbour
The most successful marketing and loyalty programs put
consumers at the very center and are purpose-built to uniquely solve a
challenge in their lives. That opening statement is so blindingly obvious as to
almost be insulting but, in our experience, the truly great programs keep a
keen eye on how the challenges our consumers face are changing and evolving –
and they change and evolve to keep pace and remain relevant.
Loyalty programs cannot be a “set it and forget it”
proposition if they’re to be successful.
Case in point, Covid has impacted consumers in numerous
sectors in ways that were unimaginable 3 short years ago. Supply chain issues
has led to inflationary pressure which, in turn, has cascaded down to hit
many consumer groups particularly hard in the wallet.
We’ve also seen, amidst lockdowns
and travel restrictions, that many consumers are seeking to put more into their
homes and the creature comforts they surround themselves with. If we’re
literally talking creature comforts, it may surprise you to know that data collected by the American Pet
Products Association (APPA) in December 2020 and March 2021 indicate that the
prevalence of dog ownership increased from 48% of households to 54% of US households
during that period. Cat ownership declined by 3% for the same period***.
Why are these
factors important and how are savvy loyalty marketers taking advantage of them?
Last week, Advance Auto
Parts announced a new collaboration with Shell to provide savings on gas to
drivers through its loyalty program. Users of Speed Perks Gas Rewards can now
save on any single gas purchase at participating stations for every $50 spent
at Advance store locations or online.
“Saving at the pump is always top of mind for motorists.
In fact, we found that fuel savings was an often-requested benefit from our
Speed Perks members. By teaming up with Shell on Speed Perks Gas Rewards, we’re
helping motorists advance at the pump and on the road in 2022 and beyond,”
said Jason McDonell, Executive Vice President of Merchandising, Marketing and
eCommerce of Advance Auto Parts.
“With Advance’s concentration of retail stores near Shell
stations, we believe this is an offering that benefits all motorists. We are
thrilled to be part of Advance’s enhanced Speed Perks loyalty program, which
combines savings on quality automotive aftermarket parts and Shell’s patented
formula of high-quality fuels,” added Greg Lemen, Shell’s Director of
Loyalty Partnerships.
While the decision to work together makes complete sense
intuitively, the fact that it’s supported by data and research not only ensures
that the program will be successful – importantly it helped shape the
relationships very structure.
Speed Perks members can check their points balance, member
status and gas rewards balance online at AdvanceAutoParts.com or Advance’s
mobile app. Combining Speed Perks Gas Rewards and the Fuel Rewards program can
help Fuel Rewards Gold Status members save an additional five cents per gallon
and Silver Status members save three cents per gallon on each fill-up. The more
a customer spends at Advance, the more they save on gas. When inflationary
pressures start hitting, you know one area that consumers (in the US and
elsewhere) will look for some relief is at the gas pump.
That’s not the only program borne from a strategic
evaluation of evolving and emerging trends.
Last week saw Hardware giant Lowe's and Pet Supply Retailer Petco
joining forces in a new pilot initiative.
Starting in February, Lowe's will open mini-Petco shops
inside 15 of its stores in Texas, North Carolina, and South Carolina. The Petco
stores-within-a-store will offer staples like dog and cat food, leashes, and
litter, and some will also have on-site groomers and veterinarians. If the
pilot program is a success, expect more to quickly open across the United
States.
During the pandemic, both companies have been boosted by customers who are at home more, giving them the chance to tackle projects around the house or adopt a new pet. Now they can offer a one-stop shopping experience that's irresistible to home-owning animal lovers. Millennials are the target audience for this partnership, with Petco Chief Merchandising Officer Nick Konat saying, "They're a high-spend customer and they really take care of their pet like they are family. And they've also been doing the same with their homes, with a lot of them being new homeowners or new renters."
These collaborations are smart because they build on the
complementary brand equity and reputation of multiple organizations. Rather
than invest countless dollars – and countless man hours – to build a new set of
capabilities and competencies, savvy marketers are finding adjacent categories
with the same consumer base to collaborate with and launch together. At
Kognitiv, we see collaborations of the type epitomized by Lowe’s and Petco as
the future of customer engagement and the evolution of loyalty programs. As our
Zimbabwean colleague Hilton often reminds us with this classic African saying
“If you want to go fast, go alone. If you want to go far, go together”
In our opinion, the programs destined to go the furthest are
always going to be the ones built on strong collaborations and strong insights.
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