How Would You Build a Loyalty Program?

Oct 11, 2004

By John Hennessy

According to, number two consumer electronics chain Circuit City is planning to launch a loyalty program.

Rival Best Buy recently celebrated the first anniversary of its Rewards Zone loyalty program. That program has signed up some four million members.

Moderator’s Comments: The details of Circuit City’s new customer loyalty program may already be public but I haven’t heard what they are. Given this
whiteboard, what are the dos and don’ts of a new loyalty program based on what you’ve seen work and what you’ve cringed about?

I’ll start.

Do – Listen before you launch: take the time to understand what your shoppers want before considering any elements of your program. The hard work will be
crafting a program that satisfies both your shopper’s needs and your business objectives.

If I can take two (and I can)…

Do – Think of your program as a reward for your shoppers, rather than as a means of securing shopper loyalty. As has been stated in comments to prior articles,
shoppers are not seeking loyalty; they just want to shop where their patronage is appreciated and where they feel they are being treated well. Framing your program in terms of
rewarding your shoppers will serve you well and help you develop a program with concrete benefits for your shoppers. The result will be shoppers who spend more with you. You can
call it whatever you want at that point.

John Hennessy – Moderator

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