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Consumer Weekly: Leveraging Loyalty Programs

Humberto Rocha | August 31, 2022

When I saw what our audience had clicked on and engaged the most with during the second week of August, I thought it was going to be quite the task to find a unifying theme. I mean, what’s the common denominator between a brand like fitness program Weight Watchers (WW), burger joint Shake Shack (SHAK), and athletic behemoth Nike (NKE) There’s obviously something to them. Turns out that our most popular transcripts boil down to a few simple concepts: data, personalization and loyalty programs.

Our top three transcripts for the week included beverage company Keurig Dr. Pepper (KDP),e-commerce giant Amazon (AMZN) and WW. Even among different companies like these, the experts we interviewed tell us about the role that data collection and personalization can do for a brand – if done right, that is. 

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Establishing a brand leads to an established consumer base

Take for example, this former community outreach and employment engagement project manager from KDP. He says that: 

People are very loyal with their brands. When I was working with categories and market segmentation, you have- I’m giving an example – your top 15% are your super loyal brand consumers. It doesn’t matter what you do, you can raise prices by $5 and they’re always going to support you and have your back. While they’re only 10%-15% of your total sales, they also make up a volume base. If things go bad, they’re going to take that volume low.”

Community Outreach and Employment Engagement Project Manager, KDP (Prior)

That’s something WW has developed, at the very least since its founding in 1963. The program still reaps benefits from its brand recognition among its weight loss programs but while it’s been around as long as the Boomers, it hasn’t quite kept in touch with the younger generations, leading it to close one of its franchises in Ireland by the end of 2021. 

A former marketing manager says that WW failed to adapt and personalize its products despite its huge presence. 

I think the shift from the perspective of just weight loss to the holistic approach of becoming healthier, developing healthier habits, and the general conversation around depression, positive thinking, nutrition, support, that type of language that was becoming more of today was well-marketed… which resonated more with different generations.

The corporate bodies, be they WW or anybody else, corporate bodies without an identifying face I think are at disadvantage…  There’s an Irish girl… she started out as a solo operator. She has coaches working for her and all qualified people in their fields and she’s serving up the same content. If I sign up, it’s Derval I’m signing up with. I think the difference for big company-named operations is they have to have that individual on the front, the connectivity, and then the operation can thrive for the Gen Z and the millennials.

– Marketing Manager, WW (Prior)

To be fair, the weight loss program blossomed at a time when your aunt probably still ordered products from a catalog book via mail and figuring out trends and purchase habits from an individual still seemed like a data scientist’s dream. 

Make data and direct-to-consumer your favorite tools 

And yet, NKE – which was founded only a year after WW has invested heavily in its direct-to-consumer operations in recent years, figuring out what exactly each customer wants, buys and browses for. 

“They’ve made a lot of progress there and have really doubled down in the pandemic to further that strategy. What really hasn’t happened yet but is well underway is the investments that they’re making to digitize the entire back end and everything in the supply chain. Supply chain has certainly been a tricky part of the business during the pandemic. I think they’re going to be seeing some real benefits of the investments that they’re making on that side of the business in years to come.

The work that Nike has done to really transform itself a bit into a technology company and to really take full advantage of the benefits of the digital world, both in going direct-to-consumer and being able to cut out the middlemen and cut out the extra margin that’s being eaten away then by selling into primarily a wholesale business, but also in really better understanding the consumer and what they’re wanting directly, I think they’ve made tremendous strides from even a couple of years ago. 

If you talk about the omni-channel presence that Nike has in their stores, it’s dramatically better and leading-edge where they’re creating a direct relationship with Nike members. You would have your phone with your Nike app on it. You walk across the threshold of a Nike store. They would know, ‘Oh, and here’s what you’ve looked at. These are the shoes that you want. This is your shoe size and all of the above.’ Your physical experience of being in the store is directly connected to your digital experience then online.

– Global Vice President of Strategic Enterprise Capabilities and Integrated Value, NKE (Prior)

Loyalty programs are key 

With this digitalization of the physical experience comes data and with data comes the potential for loyalty programs, a way that NKE is essentially using through its app. Companies like SHAK and Best Buy (BBY) are currently looking into this in order to capitalize on their brands. 

I know they’re still trying to establish an actual loyalty program, etc. almost like a Starbucks Star system or something that’s the gold standard, I’d say, of loyalty programs. The app definitely gave us a lot more insight to our guests, whether they’re ordering ahead or doing the delivery through us. I think delivery through us, I would say we weren’t prepared for the margin side of it. We still have some work to do on that. .. Is it worth driving a little bit of margin just to get insights on our guests? Potentially, I would say, just depends.

Although the app’s in the infancy stages, I think there’s a huge potential to be able to read our guests and then start doing the analytics behind it. What can we increase here and there on price to increase margin that people won’t feel? What are the guests ordering? How can we make that more effective in our labor by two weeks?

Financial Planning and Analysis Manager, SHAK (Prior)

A former senior marketing manager for the electronic retailer thinks that Best Buy Canada is dropping the ball on a huge opportunity. 

Lastly, I think Best Buy’s biggest risk right now is a lack of a loyalty program. They have no loyalty program. They decommissioned their loyalty program so their identifiable audience and their being able to reach that identifiable audience was significantly decreasing over time… In the U.S. it’s quite different, they have a much stronger loyalty. Here in Canada, that was their greatest risk.

You need to be able to identify a user and the main way to do that is I need somebody to log in and the moment that you log in, I do a match with you and now I can identify you moving forward. .. That’s one of the main advantages and main opportunities within a loyalty program. With Best Buy moving away from that, they lost this huge opportunity to get customers to log in. As it stands right now, if I’m a customer, why do I want to log into bestbuy.ca to check my account? I didn’t order anything. As a result of that, the vast majority of the Best Buy audience right now is anonymous. They don’t know who they are.

– Senior Marketing Manager, BBY (Prior)

With great data comes great responsibility to capitalize – something that AMZN is notoriously good at. Here’s an expert on the company’s recent acquisition of Roomba, a company known for its automatic vacuum cleaners. 

A lot of people are getting freaked out thinking that Amazon is going to try to map your home and all that. The funniest part to me about all this is they already have Alexa algorithms that can map your home with echolocation. 

In fact, they’re buying it to optimize their warehouse side of the operation, which uses a lot of robots very similar to Roomba with lighter movement and similar style locomotion. I think it’s going to be a really big improvement for that side, especially speaking as somebody who worked on inventory management.”

– Manager, AMZN (Prior)

Nature may abhor a vacuum but even a vacuum cleaner can provide an enormous amount of data. In the meantime, keep an eye out for a Roomba loyalty program and read more on our transcripts here with 14 days on us. 

Top Six Transcripts of Last Week

Top transcripts by unique users

  1. KDP (Keurig Dr Pepper): Former Competitor Believes KDP Will Continue to Have Pricing Power With Respect to Single-Serve Coffee
  2. AMZN (Amazon): Former Manager Thinks AMZN Has the Advantage in Customer Support Scale
  3. WW (Weight Watchers): WW Former Marketing Manager Believes WW Will Reinvent Itself and Thrive

Top transcripts by engagement per unique user

  1. SHAK (Shake Shack): Former Financial Planning and Analysis Manager Believes Restaurant Margins Could Return to the Low-20s 
  2. BBY (Best Buy): Former Sr. Manager Believes GOOGL  META  and CRTO Are Still the Most Relevant Platforms for BBY’s Marketing Efforts
  3. NKE (Nike): Former Global VP Thinks NKE’s Key Area of Growth Lies in DTC Digital Transformation

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