Topic 2: Loyalty and Distribution Methods
loyalty programs more likely to be successful for certain kinds of
products and service than for others?
the proliferation of loyalty programs, how can you differentiate your
program from competitors programs?
are your thoughts on using a franchise as a method of distribution for a
the pros and cons referenced with examples to support your thoughts.
Loyalty programs are basically a marketing strategy a
retailer, or other type of business come up with in hopes to keep the consumer
coming back. I believe it’s easier to sometimes keep a customer than to
gain new ones. However, when having a loyalty program and a current
customer speaks highly of the store and another customer is curious, they will
also shop at that store and become a part of the loyalty program.
I have so many of these wonderful loyalty cards, that
it’s difficult to keep up with them and I’m quite glad most of them had
resorted to using your phone number, so I just need to remember which stores I
shop at. I currently hold cards for Ralph’s, Food 4 less, Big lots,
PetSmart and I can’t even remember the rest of them.
I believe a loyalty program could work for my company
if I know what the competitor’s programs are; I can have a program that
supports a point system as to where if you spend so much money you can use
those points as a credit towards your bill or be able to save the points for a
larger discount towards a purchase. I would make it to the points either never
expire or expire after three to six months or make it a roll over program.
The most profitable loyalty program I had was probably
Mazda. I would always take my car to them for service and at one point I
didn’t have to pay much for a service because I had $300 in loyalty cash that I
was able to put towards that service which cut my bill down tremendously.
I can see the pros as there are so many of them, yet I
can also see the cons of possibly losing money or if there is a fee based
program. Hence Barnes & Noble they sucker you in to their loyalty
program, but it’s like $50 a year if not a little more, I can’t remember.
That may be a great thing if I were to shop there all the time and spend tons
of money in there, but I generally only shop there once or twice a year and to
me it’s not worth it. Most times I can get the same book at Walmart or
Target for a cheaper price and not need a rewards program.
Dhar, R. R. (2013). Marketing Management, VitalSource
for Kaplan University, 4th Edition. [VitalSource Bookshelf Online]. Retrieved
Toporeki, Adam. (Jun 2012). What is a Loyalty
Program? Retrieve from http://customersthatstick.com/blog/what-is/what-is-a-loyalty-program/
A purely point based loyalty systems are successful
because they encourage consumers to buy new products instead of used ones, and
also offers exclusive products that can only be accessed through the rewards
system, extra purchases so the customers can reach their reward goals. The most
common loyalty program is the tier based affinity program. Tier based affinity
program is the same as the points systems, and these programs create an entire
strategy out of their loyal customers. Tier Based Affinity programs give
customers something in the beginning then over more as they progress.
I can make my loyalty programs different by being
creative how the customers can earn their loyalty points (McEachern, 2014). An
example of creative is giving away points for their birthday. Be creative on
how a customer can spend their points. An example of this is having a website
where the loyalty customers can go spend their points on products.
I believe that owning a franchise, as a method of
distribution will be great because it will help the company get out their
products faster. The pros of owning a franchise with an investor are that you
will receive more financial help and you will have more control without having
a full partner. The cons of owning a franchise with an investor are a partner
can put you in a delicate position and you may still have to be on your own
when making business decisions (Wilson, 2013). People should think before
opening a franchise for distribution.
McEachern, A. (2014, November 10). 6 Strategies
For A Creative Loyalty Program [Web log post]. Retrieved from
Wilson, S. (2013). Pros and Cons of Franchise
Partnerships | AllBusiness.com. Retrieved from
Winer, R. S., & Dhar, R. (2011). Marketing
management (4th ed.)