The real power of a “club” is the sense of identity and community it creates. Most retail “clubs” are just pricing programs with no real tie to an individual. A piece of plastic isn’t the same thing as a sense of identity. That’s why many customers carry pockets full of club cards with them wherever they go.

There is so much more that retailers could do with their club programs, but most of them require more than the mass, automated distribution of discounts. Club programs give discounts because they are easy. But if you want to build loyalty, real loyalty and not a mere addiction to discounts, then you might try: – Having a tiered loyalty program, where the tiers are transparent and progress toward the next tier is communicated with every purchase. If consumers have goals, and can see the rewards that come with the next level (which must then be differentiated from the current level), then they will think of you first when it comes time to shop. – As the article states, a VIP club can be valuable, or a sample club. But the real point is to make your most valuable customers feel special. That might mean a different colored card that gets access to gift bag handouts during the week, or a special voice of the customer line, or coupons to hand out to employees for excellent… Read more »

Through club cards, retailers have a mountain of data about their consumers. When will they begin to really mine that data and to offer consumers custom-tailored promotions? Right now, consumers equate club cards to discounts. What would it take to make club cards the center of better, more customized shopping experiences? Then they would truly become more valuable.

I like the tiered idea for club cards. If you look at Costco’s membership structure with Goldstar, Business and Executive, they really do market differently to each member and I think you will see different spending habits with each level and you can optimize marketing to each of those groups. Groceries and pharmacies should look at spending levels and perhaps offer better discounts or different types of bonuses to upper level members. Honestly though, I think most customers like the idea of cash back at at some point in time, hence the continued success of the Executive level of membership at Costco. and Shoppers Drug Mart’s Optimium program.

Service is the differentiator. Anyone can be matched on price or product. My wife has the “loyalty” cards of all three grocers in town. How loyal is that?! She just knows, like every other shopper, that she’ll get ripped off if she doesn’t use the cards. Priority check out lanes for top-tier customers, personal shopping assistants, etc, are the things that set your stores apart. Especially if the people performing the services have personalities to generate compelling reasons to come back to the store.

I think the key is making sure that the club provides value and a sense of intimacy. And, the more personalized the benefits (based on shopping patterns) the better.