Retail Management Ch. 18 Case Study
Case Study 18: Nordstrom
1. Design characteristics of an effective loyalty program are offering perks and deals to valued customers, rewarding them for shopping at your store, and doing so at a low cost and increasing the company’s share of wallet. Mark Johnson, CEO of Loyalty 360, said this about loyalty programs: “Loyalty marketing is and should always be much bigger than points, thresholds or incentives. It is about changing and influencing behavior in a proactive manner that creates long-term brand advocates who, in turn, enter into a dialogue with the brand.”
2. I think that Nordstrom’s new program is slightly more productive than the old program. They have made it more important that the customer shop at Nordstrom with their loyalty card rather than just shopping anywhere. This will boost Nordstrom’s share of wallet. Also they have added an effective tier system that may push customers to buy more than they would have originally.
3. Nordstrom will have its most success if they target the upper class for their loyalty program. In order to really benefit from the program, the customer needs to be able to have a lot of disposable income. They should also target their regular customers.
4. I believe it is worth it. Obviously Nordstrom is having tremendous success, and a lot of it is due to the loyalty program. There are people that enjoy spending ridiculous amounts of money on overpriced clothing with no benefit to them at all, so a program that gives them back a little will only entice them to spend more.
5. I think that the wealthy are less drawn to a loyalty program normally. Those that are middle class and are frugal (the couponers) would be more drawn to a loyalty program that gives them rewards back on things they already plan to purchase. I think the only time that the wealthy class would be drawn to the loyalty program is for a status issue. Some may find it important to them to belong to a high class business loyalty program.
6. A strength of
1. Design characteristics of an effective loyalty program are offering perks and deals to valued customers, rewarding them for shopping at your store, and doing so at a low cost and increasing the company’s share of wallet. Mark Johnson, CEO of Loyalty 360, said this about loyalty programs: “Loyalty marketing is and should always be much bigger than points, thresholds or incentives. It is about changing and influencing behavior in a proactive manner that creates long-term brand advocates who, in turn, enter into a dialogue with the brand.”
2. I think that Nordstrom’s new program is slightly more productive than the old program. They have made it more important that the customer shop at Nordstrom with their loyalty card rather than just shopping anywhere. This will boost Nordstrom’s share of wallet. Also they have added an effective tier system that may push customers to buy more than they would have originally.
3. Nordstrom will have its most success if they target the upper class for their loyalty program. In order to really benefit from the program, the customer needs to be able to have a lot of disposable income. They should also target their regular customers.
4. I believe it is worth it. Obviously Nordstrom is having tremendous success, and a lot of it is due to the loyalty program. There are people that enjoy spending ridiculous amounts of money on overpriced clothing with no benefit to them at all, so a program that gives them back a little will only entice them to spend more.
5. I think that the wealthy are less drawn to a loyalty program normally. Those that are middle class and are frugal (the couponers) would be more drawn to a loyalty program that gives them rewards back on things they already plan to purchase. I think the only time that the wealthy class would be drawn to the loyalty program is for a status issue. Some may find it important to them to belong to a high class business loyalty program.
6. A strength of