Why do loyalty program rewards come with an expiration date?

Research tells us the easiest sale to make is to get your current customers to buy more; and it's less expensive to keep the customers you have than it is to get new ones.  

Loyalty programs are designed to help do this. By offering specials and rewards, they not only bring in more money and keep customers longer, they also can generate good word-of-mouth, social proof and customer referrals.

Like many people I belong to several rewards programs, one of which is Staples.  Staples has reduced their rewards significantly since I joined.  Duane Reade has too, especially since they were bought by Walgreens. 

The reduction in rewards from Duane Reade, which effectively translated into a price increase, was directly responsible for my moving most of my purchases to jet.com.

As for Staples, while I maintain my membership I have shifted many purchases to lower cost suppliers for the same reason.  But I do still recycle my ink there so I get a coupon from time to time. 

A few months ago, Staples combined two of my coupons in one email and led with the newest one.  As a result I missed the fact that the bigger coupon was expiring earlier, and had no opportunity to use it.

It may have only been for $8, but it made me mad.  I know that it's not a lot of money in the scheme of things.  But it was enough that loss aversion set in.  So a gesture that was supposed to make me feel good about being a customer instead made me angry. 

But it also made me wonder.  Why do loyalty coupons even have expiration dates?  If someone is a loyal customer why would a company care when they used their rewards, just as long as they did?

In August United Airlines announced that they would no longer impose a deadline to redeem frequent flier miles.  They join Delta and JetBlue.  But American Airlines is still requiring customers to earn or redeem miles every 18 months.  (Gazdik, 2019)

So, what do you think?  Why do companies do this?  Have you experienced the frustration of expiring rewards?  How does it make you feel about the company?  Have you shared your feelings with others?  Have you shifted your purchase patterns as a result?  Will you now favor United and Jet Blue over American?

Gazdik, T. (2019, August 29)  United Airlines Loyalty Miles Will No Longer Expire.  mediapost.com.  Retrieved October 8, 2019, from https://www.mediapost.com/publications/article/339941/united-airlines-loyalty-miles-will-no-longer-expir.html

Note to Century 21 - daily emails? Unsubscribe me.

I know that marketers are very excited by email marketing, but daily emails?  Really? 

I guess there may be some people who want them, but I'm not sure who they would be.  According to a 2015 survey 53% of consumers report that getting too many emails is the reason they unsubscribe - so I guess the other 47% are ok with how many they are getting.  Or not.  I think it's far more likely that they are dumping them into an email account that they have created for just that purpose and are ignoring them. (Schiff, 2015)

I read somewhere that you should send the most emails to your newest customers and oldest.  Perhaps that explains the daily emails to new customers.  But since you have no idea what a new customer wants you can't personalize the emails in any way so they simply become more spam filling my inbox. 

Not that Staples, who I have been doing business with for over a decade, is doing any better.  Saying that an offer is "Just for You" and including items I have never bought is ridiculous.  And sending me coupons that aren't good for my preferred brand of ink are insulting.  I've been a part of your loyalty program for years.  Why aren't you looking at my past purchases properly? 

When I tried to manage my subscription the choices were limited to reducing frequency to two times a week.  Not good enough.  What I really want is an email once a month for something I actually might buy.  Is that too much to ask? 

And as far as Century 21 is concerned, I will be unsubscribing as soon as I finish writing this blog.  I hope they haven't already sold my email address to a million other people so that they too can annoy me with emails I don't want.  But I imagine that ship has sailed.

Quick follow-up: When I tried to unsubscribe from C21 they would not allow me to!  Instead the best option I could find was reducing frequency to once a week.  What are they thinking?  The reason I joined the program in the first place was that I intended to do more shopping with them in the future.  Pissing me off is not a good way to start a new relationship.  I may need to reconsider.

Schiff, J. (2015, March 24)  Top 7 reasons people unsubscribe from your email list.  cio.com.  retrieved April 29, 2016, from

http://www.cio.com/article/2901255/email-marketing/top-7-reasons-people-unsubscribe-from-your-email-list.html

Retail isn't being forced out of business, it's committing suicide.

My home cordless answering machine broke last week.  Yes, I know that wanting to replace it makes me a dinosaur, but I work from home, and call quality on smart phones still leaves much to be desired. 

The last time I bought one it was fairly simple.  I went to J&R, they had about a dozen to choose from, I picked one, paid and walked out of the store with it.  End of story.  Of course J&R is no longer in business.  So I looked online and it appeared that Staples carries them.  Lots of them.  At least 50 different kinds.  (I got tired of reloading at that point.)  So, I figured that I would head to a store and pick one up.

I arrived at a huge store to find three people just waiting to help me, and no other shoppers.  When I told them what I wanted, their response was "We can order it for you."  What?  After some more questions they admitted that they had none in the store. 

Since I live in Manhattan, I thought I'd try a different store the next day.  This one had about six models in a locked case.  When a person asked if they could help me, I pointed to the simple one and asked if it had an answering machine.  He said "No," I responded in kind and left the store.

Now, I will need to go through all those options online and pick one.  Something that will take me more time than picking one up in a store did.  And I have found that I make more mistakes when I buy online which forces me to have more do-overs, something I really hate.

So what's the solution?  Stores that only display samples so that people can see them, feel them, touch them, and ask questions about them.  Once the selection is made the customer orders online and the item is shipped directly to them.  In other words, if people are show rooming, then make it work for you! 

Blue Nile and Bonobos are pioneering the new approach and proving that it works.  Macy's is giving it a try -- just in the nick of time apparently, as they just announced flat earnings projections for the year. (Kapner, 2015)

Staples are you listening?  I still need a new answering machine.

Kapner, S. (2015, August 12)  Web Retailers Teach In-Store Tricks.  Wall Street Journal.  pB1

Overwhelming your customers with emails is not a good sales strategy.

The other day I received 22 emails from Staples.  Granted they only meant to send me two.  But as far as I am concerned two emails a day from Staples is two too many.  I discussed the fact that I find their emails overwhelming and annoying with another small business customer and he agreed.  This was last spring.  Then I noticed that they started coming even more often.  Not surprisingly soon after I read that sales were soft.

It’s true that most of the emails they sent included coupons.  But they all had strings attached – good for purchases over $100 – excluding these items, good in-store or online only, limited timeframes etc.  Even the coupon they sent me to apologize for the 22 emails came with caveats. 

I was never too keen on Staples’ emails to begin with because they are not customized based on my purchases.  Instead they tell me what they have on sale that week even if I have never bought anything like those items before.  What’s the point of having a database if you don’t intend to use it?  On the other hand when they have tried to use my data for outreach it is clear that they are not coordinating my offline and online purchases properly even though I always use my rewards number. 

I have canceled every opt-in newsletter I have ever received due to the same issue with overkill.  I noticed recently that when I canceled one I was given the option of selecting a lesser frequency.  Perhaps Staples offers the same option, but given their database dysfunction I am afraid that if I do try to cancel their promotional emails they will stop sending my rewards as well.  So I just ignore them.

According to the Direct Marketing Association, these days only 22% of emails are opened, and just 1.5% result in a purchase.  (Holmes, 2012)  That’s comparable to direct mail rates; and, much lower than the online rates used to be. 

Perhaps if companies gave a bit more thought to both the frequency and the content of their emails they might become an effective marketing tool again.  At the very least they’ll stop alienating their customers.

 
Holmes, E. (2102, December 19)  Dark Art of Store Emails.  Wall Street Journal.  pD1

“Nah, we don’t got that.”

June 10, 2010

For several years Staples used the tagline: “Yeah, we got that,” and they actually did. When I needed paper and ink and blank CDs, I could pretty much pop into any store around town and pick up what I needed. But, recently I noticed that more often or not, the item I was looking for was out-of-stock. My first thought was that they were simply seeking to move traffic to their website, so I looked for the items there. No luck.

Now comes word from the CEO that they are transforming their business, selling more private label products, and focusing on services, where inventory needs are low and margins are better. (Mahoney, 2010).

Great. So where do I go now to get staples when I need them?

But perhaps more importantly, does it make sense to jettison a brand positioning that led to so much success?

Mahoney, S. (2010, June 2). Staples Focuses On Growing Tech, Services. mediapost.com. Retrieved June 9, 2010, from
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=129338&nid=115028