I’ve been studying the Millennials for the past 5 years to see what makes them tick. My selfish motive is to better understand the Millennials in my own family, but apart from that, I am fascinated with how their perspective on and love for technology will change the way marketers construct loyalty marketing value propositions.

At the very least, we have to embrace digital channels to deliver offers and to support program servicing needs. Going a little farther, we should be delivering offers, promotions and triggering incremental purchase behavior in a way that benefits merchants and program sponsors without adding a “creep” factor to the lives of Generation Y. As we’ve come to learn, this group might be the quickest to disconnect upon noticing incoming creepiness.

At some point, I concluded that “studying” might be the wrong approach. Why not skip the removed, third party observations and take the bold step of talking with them. After all, everyone wants to be listened to and human beings, regardless of generation, love to talk about themselves.

I am lucky to have a Mystery Millennial who has agreed to share her experiences with brands, retail and otherwise, and to share her candid experiences with Loyalty Truth from as the mood strikes.

Here is a short tale of interaction with Urban Outfitters that makes a very clear point. Read it and let me know what lesson you take away.

Mystery Millennial Goes Urban Outfitter

I have a large purse, I do, and I love my oversized bag. It has been very useful for collecting the small pieces of my daily life that don’t have a specific home, like receipts. It sounds crazy, but I’m toting around hundreds of little papers recording my retail history over the last month or so, a persistent reminder that I have not been diligent with my record keeping.

The other day I had a shopping experience that left me particularly happy at the checkout counter. I was updating my fall wardrobe at Urban Outfitters and, while making my purchase, was asked if I wanted to receive my receipt by email! I believe my response was a bit generous for the situation, but my enthusiasm was genuine. I was more than happy to hand over my email address for the sake of not adding to my already embarrassing collection of paper waste in my possession.

To top off my delight I had my receipt easily accessible right where I record my budget- on my computer. There was no digging through the infinite abyss (my purse), organizing by date, trying to read crumpled receipts, etc.

In a day and age of marketers pursuing the pocketbook of Millennials, I would say this is a positive step by a big retailer. They might have been motivated by “green” causes or just have been mercenary in pursing my email address. Either way, they made a positive impression by not wasting paper, and saved me time as well as space in my purse.

Editor’s note: I’ve got to ask our Mystery Millennial if she shops at CVS Pharmacy and is a member of ExtraCare. The program has taken a lot of heat for its long paper receipts, only one or two of which would choke Ms. Millennial’s purse.

Rewards comes in all shapes and sizes. Some small, some large, some that you save for over a long period of time, but not too many that are delivered in the same moment that your transaction takes place and that can be cashed in almost immediately.

When I made a quick stop at CVS today, two nice surprises took place.

1. Yes, there was a $12 CVS Extrabucks coupon appended to the bottom of my receipt. It had a few restrictions and was good for 45 days. A bounceback visit was not required and I could have returned down the aisle for a few more items and cashed in.
2. Almost a better surprise was that the cashier alerted me to the award, telling me to be sure not to throw away my receipt as it carried evidence of my twelve bucks. I’ve advocated for better training of store associates to ensure that the value of rewards programs is delivered to each customer and for some reason, brands don’t hear the message. CVS clearly gets it.

Interesting also was that as I checked my email later that morning, the notice of my $12 “quarterly earnings” was sent to me around the noon hour. I had three options to enable my reward and printing from the email or at the Extracare coupon center in-store were the two most obvious.

The fact that CVS is apparently printing the rewards on receipts for purchases made in April is an improvement. I don’t know if the reward will print out on the receipt for EVERY purchase I make during the month or if it generates only on the first purchase. Either way, its an enhancement to the customer experience and, better than telling me that their loyalty program is “going green”, is evidence that green rewards are a reality at CVS.

There are some aspects of CVS ExtraCare mentioned in a previous post that I still do not understand and maybe never will.

1. I have absolutely no idea how the $12 was calculated. The receipt did say it was issued based on my winter spending, meaning I have to guess about my spend during previous months to figure out the amount of return I am getting for my patronage. Since the award printed on April 1, I imagine the rewards are calculated with one quarter delay and are issued on the first day of the ensuing quarter.
2. My receipt tells me the amount of my “Spring” spending. I am guessing that CVS does not adhere to the Farmer’s Almanac definition of Spring and instead equates Spring to a calendar first quarter, i.e. Jan 1 – Mar 31. I don’t really care how they delineate the time, just wish they would make the message more clear.

Overall, twelve bucks is twelve bucks – a pretty solid reward given the average amount of purchase made in the store per visit. While some brands fret over 1 or 2 percent give back or generate 10% off coupons on next visit that only amount to $2-3 maximum, CVS delivers hard dollars of a more significant amount.

Maybe the mystery they create is intentional. If so, I give them credit for prescribing their own version of “surprise and delight”.

Yesterday was April 1. To my surprise, I received these fantastic offers from three of my favorite loyalty programs.

American Airlines AAdvantage sent me an email offering discounts on fares between some of my favorite and most traveled cities. They even distinguished between those cities which I frequent for business and those for personal or vacation travel. Talk about relevancy, a great deal, and a call to action that I could not resist!

Best Buy Reward Zone sent me a snail-mail offer for a Blue Shirt guided shopping experience to help me select the right HD digital camera just like I told them I was in-market for through a recent survey. They piqued my interest and launched me into action to finally make that purchase to create the video content I plan to post on Loyalty Truth.

CVS delivered on my purchase data they have been collecting through CVS ExtraCare for the past 2 years. Instead of offering me discounts on products that I have not bought and in categories which I don’t shop (cosmetics), they gave me a break on that contact lens solution that regularly costs an arm and a leg. I’ll bet they had Bausch & Lomb reallocate some co-op money based on their recognition of my spend in that category. Whatever the reason, I was delighted to receive the discounts right on my purchase receipt.

Alas, yesterday was also April Fool’s day and none of these offers really took place.

With Good Friday in mind, today would be a good day to think good thoughts and imagine a few ways in which loyalty sponsors could charge up their programs and create the win-win of increased sales and customer engagement.

The best starting point would be using their data to deliver the types of personalized offers I fantasized about on April Fool’s day.

Next would be pledging to never provide incentive for any consumer behavior that is not in the best interest of the customer. Rewarding on debit card use with the quiet aspiration to generate increased overdraft fees would be top on the list. Fortunately this temptation will largely be taken off the table as banks are required to invite debit cardholders to opt-in or out for overdraft protection. Bank of America is ahead of the curve and has already announced that it will curtail overdraft fees on debit as of June 19.

Third would be to understand that higher redemption rates mean higher customer engagement, program satisfaction, and translates to higher customer lifetime values. Seeking higher breakage rates is antithesis to a win-win with customers. The fear of increased costs driven by higher redemption rates can be moderated through disciplined financial measurement of a loyalty program and balancing rewards with little or no financial leverage (cash back) with those that have it (experiences).

All of these Good Friday dreams are well within the power of loyalty sponsors to put into motion. The data is there, the ability to communicate exists, and customers have spoken that they are just waiting for their favorite brand to engage in a relationship with more value and relevancy.

Spring hopes eternal!

I need to do some consumer research. Do minor consumer revolts against good sense constitute a leading indicator of good times returning, or confirm that the economy is still struggling with frustration leading people to make irrational choices?

Whatever the answer, it seems a minor groundswell is taking place in the restaurant business with new chains opening that advocate consuming lots of calories in the form of “food to die for”.  A local eatery known as Heart Stoppers Sports Grill has attracted quite a following for its “Chili Chest Pain Fries“, “Heart Stopper 3 lb. Killer” burger and “Heart Dogs“. I guess waitress’ dressed as nurses with fishnets aren’t hurting business either.

Heart Stoppers attracted more than my attention as the Fort Lauderdale Sun Sentinel reported today that the Heart Attack Grill, an Arizona chain claiming to have ownership of  “Taste Worth Dying For” and all other things related to pumping out “fat food”  is asking Heart Stoppers to cease and desist the operation of its business model.

Heart Attack Grill touts its own brand of greasy aspirations including an array of “Bypass Burgers” and “Flatliner Fries”. If you visit their website, you’ll notice that the burgers are complemented by “No filter” Lucky Strike cigarettes and Jolt Cola. I have to wonder if both of those brands are comfortable with being thrown into the “bad health” food bin, but maybe I just think too much.

I scoured both web sites for any signs of rewards programs but didn’t see even a punch card or similar offers. One thing I did see is that the Heart Attack Grill promises that if you’re over 350 lbs., you eat for free. Apparently Heart Stoppers makes the same offer, one of many alleged copycat violations in the litigation between the two companies.

In direct marketing-speak, does this translate to an aspirational loyalty program tightly focused on a target market? Or, is crossing the threshold of 350 like being crowned a Platinum cardholder with your new tier offering soft benefits (perks) that others can’t have? I’ll leave it to you to sort out that debate. Meanwhile, I’m just worried that customers aspiring to reach the magic number that qualifies them for free food may not fare well thereafter!

I know we’re all “dying” to build customer loyalty and that many consumers are “dying” to earn enough points for that big freebie, but watching those that attain the highest tier in a program drop like flies isn’t my idea of achieving an acceptable return on investment.

Enough said, I’m going to pick up some Rolaids at CVS and earn a few more ExtraCare points! I think it’s safer.

Editor’s note: Opinions expressed by the author are influenced by his 40 mile bike ride earlier in the day and are not those of the target audience of these two restaurant chains!

Now and then, it’s good to know you’re ahead of the game.

A few months ago, I had written about CVS ExtraCare and, along with an overview of their program, made note that I had measured one receipt in excess of 36″. If receipts were as much fun to catch as Tarpon and Bonefish, this one would have been a World Record.

Yesterday’s front page article in the Wall Street Journal, has brought the subject of the increasing size of retailer receipts front and center. Supporting this WSJ story is another take from MSNBC that you might want to read.

From my point of view, messaging on purchase receipts should be evaluated on the relevancy of the message. In CVS, there are a series of specific product offers as well as CVS ExtraCare Bucks offered to consumers. The “Bucks” are always welcome and drive bounce back to the store.

The accompanying product offers are relevant in theory, though as I noted previously, CVS has some distance to travel before it connects purchase behavior with offer. To date, I receive offers for products that I have not purchased previously and would never be on my list. In short, my hope is that CVS will do better with its data in the future.

In another example in the WSJ story, Home Depot was chided for devoting 4″ at the bottom of their receipts for survey invitation. The Home Depot spokesperson quoted said that 500,000 responses are received each month and that this medium drew much higher response rates than in-store customer comment cards used in the past.

If customers want their voices heard, I am not sure why they complain about being asked for their opinion. Yes, there is a paper-waste issue, but at least Home Depot cares enough to ask and is willing to put a $5,000 gift card on the line for participants each month.

There are two issues at work here: store operations and customer identification. I would encourage the operations people at all retailers to review the layout of their receipts and do their best to minimize the footprint. The customer identification issue is an old one that has plagued many retailers and can be addressed in large part by a customer loyalty program.

Whether you like points, miles or widgets, you should understand that by introducing any form of membership club with benefits allows the retailer to identify customers and lay the foundation for more personalized and relevant communications. If Home Depot knew who I was, they might not have to print their survey offer on my receipt, but could send me an invitation by email instead.

By using customer data in a positive and proactive manner, there is cost savings, environmental impact, and better customer experience at the register. In the longer run, there is the opportunity for delivery of relevant offers that will lead to higher share of wallet and incremental profitability.