Is there Loyalty among Bibliophiles?
filed in Communications, Customer Experience, Loyalty Models, Participatory Marketing, Retail on Jun.09, 2009
Three men walk into a bar. Sorry, that’s the lead-in to an old Irish joke. In this case, three practitioners of Loyalty Marketing (people who actually create brand loyalty for a living) are on their way to a Florida Marlins game after the conclusion of Loyalty Expo 2009.
Having no idea of the conversation that would ensue, I commented that I did something surprising the weekend before, pay a $25 membership fee to join the Barnes & Noble Member Program. “I got half the annual fee back in one purchase” was my justification. I also knew that with purchases pending to buy the kid’s summer reading books, it wouldn’t be long before I recovered the entire fee. Add to that the convenient location of B&N to my house and it was an easy decision.
My friend riding shotgun retorted, “I’d never pay a fee because Borders lets you register for free and I can wait for those 40% off coupons they send by email”.
Not to be left out, our backseat companion added “I always buy my books from Amazon because they have the best prices, but I always wait until my order is big enough to get the free shipping“.
Suddenly we had a mini-focus group at work in a car full of Bibliophiles. Who knew that Loyalty Marketers were such avid readers? More importantly, I realized just how challenging it is to create a value proposition that attracts a wide enough audience to make inroads into competitive offers. We had three examples right before us, each with an instructive lesson about consumer purchase behavior:
- The straightforward “pay now and recover as you shop” approach from B&N is sure to attract a self-selecting crowd, but does it shift share once the fee is earned back?
- Borders makes it easy for anyone to play, but numbs its membership with a repetitive cycle of discounts and sales that train customers to wait for the one they like best.
- Amazon builds on a low-price model with benefits like free shipping, but will share shift occur when these perks aren’t available?
Each of these strategies has its limitations and there is one common element missing from each program – Participation. My quick take on the Participatory Marketing value chain leads off with Awareness, creates Engagement, and leverages Word of Mouth and Viral effects to create Community and ultimately long term Loyalty.
I may not have these elements in just the right order and possibly abused some buzzwords, but its clear that each of the booksellers that were the talk of the evening needs to take a step beyond promotion and introduce mechanisms for customers to stay with them in between purchases and when the optimal deal is not front and center.
How do you buy books and from whom? Do any of these programs stand out for you, and why?
H. Leigh Steves on 
Bill Hanifin on
June 10th, 2009 on 9:35 am
Hi Bill
I was happy to be one of those bibliophiles in your car on the way to the Marlins game! I think loyalty programs and incentives are a big part of where you buy your books, or anything for that matter. Free shipping is definitely a plus and if it is not offered on Amazon, I think people would tend to navigate to Borders or Barnes & Noble to get the best deal. I also found that doing a Google search for promotional codes has value and often times can give you additional discounts or free shipping when it is not offered.
June 10th, 2009 on 2:49 pm
I believe these revelations you had (ie, different ways loyalty marketers may buy their respective reading materials), and your subsequent question, “is loyalty a trait among a population of readers” are as follows:
1) loyalty marketers themselves, may have separate and distinct purchase habits, attributable to their professional understanding of these programs, and so, have need to justify their spending vehicles (this may be the ‘doctors make the worst patients’ theory, I mean, who ever heard of ’saving up’ book purchases to save a nickel on postage; a good read shouldn’t have to wait, seriously);
2) a worthwhile conversation leading to a breakthrough of understanding and information, can be generated by the most irreverent of topics (ie, it all depends on what you do with an idea);
3) you can learn something new and discover interesting personal facts, by just the mention of a book.
That expressed, my take on the different styles of program marketing prescribed by these merchants, is mostly attributable to the factor of convenience. I, myself, buy books out of great respect for either the subject, the author, or the tool (as dictated by the need to acquire some sort of knowledge base), so only buy on rare occasions, and buy upon impulse, so immediacy is a huge factor. Amazon is quick, inexpensive, and consistent; Barnes & Noble allows you to peruse, allows a guided tour by an experienced professional; Borders offers purchasables beyond those craved by any population of readers, so doesn’t exude respect for the written word, in my opinion. Readers and those who truly desire word excellence, are a unique lot and likely not easily bound by purchase decision ‘law’…
Happy reading.
June 10th, 2009 on 4:12 pm
Love the topic, Bill — my peer Bob Konsewicz and I have had this very discussion many times ourselves, with slightly different takes than your car crew. We both frequent Borders AND Amazon, but in different ways. I use Amazon to research almost every book purchase — I want to read professional and consumer reviews and excerpts before making my decision to buy. But once I do decide, I want that book NOW so I go make my purchase that day at Borders (because I’m a program member there). Bob, on the other hand, will go to Borders to discover the book he wants and to peruse its contents, but eventually makes his actual purchase on Amazon because he feels he will get a better price there.
So, my purchase is ultimately driven by the desire for immediate gratification (via Borders); Bob’s is driven by frugality (Amazon). I think there are ways for both brands to play on each of our respective personas, but it would take a much more refined and targeted communications/offer approach (as you have so effectively pointed out in the past in your evaluation of the Borders loyalty program).
June 10th, 2009 on 6:14 pm
Bill, I wonder if you shouldn’t, in this economy, evaluate the cost of stolen customer service, as detailed in the description above, with respect to using a merchant’s good service and available merchandise, as store and shelf-space, as well as professionalism through direct consumer interface, in calculating a metric and measurement plan for your clients, as previously described in another of your blog entries with reference to the following:
“Over the next few weeks, I plan to break down key elements of Measurement plans and share insight into how to better manage the financial liability for unredeemed promotional currency”
My thought in my comment response on that blog post, was that your loyalty programs should have redemptive staying power, and if not valued and completely used, would be deemed a financial loss when calculating a program’s value to a business’ bottom line. I think this idea of using a merchant’s service, but buying from a cheaper ‘do-it-yourself’ supplier, is another area of great concern.
June 10th, 2009 on 9:06 pm
Hi Bill,
Good post. It is interesting to see how many loyalty programs get stuck into “rebates” of one kind or another. I think your point about the one critical element missing from each being participation is key. If you are going to focus on a rebate/discount offer get everyone involved and take it to the next level like Amazon did with its Ready, Set, Go program last year – http://sn.im/jvgvx
More importantly if loyalty members are suppose to be your best customers then leading brands really need to figure out how to market with these customers rather than at them. This means creating a program with truly unique benefits that create a dialogue and build an army of brand advocates.
June 16th, 2009 on 10:39 am
I’m curious… I’ve heard this phrase a couple of times now, & have no clue what it means, “to market AT people, rather than to them?” (in the comment above, he uses the term “with”… ) Would you mind giving a description of the differences between these? I’m confused…
June 16th, 2009 on 2:17 pm
Bill,
Quality discussion and very fine work on your part, as always. The loyalty program variations discussed, and the corresponding book buying behaviors debated during the car ride (were you guys lost on the way to the Marlins game or just plain bored?)merely indicate a solid understanding of what each brand truly stands for. Matching the loyalty value prop to the brand’s core and highest value customer audience is underscored by the variations and preferences outlined by your in-car debate. If each has aligned the value prop to brand juxtaposition properly, and the segments are right-sized, then each will profit from their loyalty strategy. As we have been discussing all spring long, its nice to see when one size doesn’t fit all.
On a lighter note, to heck with the book sellers. Does anyone still sell a Racing Form?