Monday, November 19, 2012

Orchestra Loyalty Program

As some of you may know, I am on my way to embrace fatherhood. This may explain the reason why I don't spend much time on this blog anymore, even though I still have the will to get back on track, and to blog as much as I can. 

As I am preparing the arrival of my child, I spend a lot of time in baby stores. And last week I went to Orchestra, a French retailer of baby clothes. Orchestra has invented a very smart loyalty reward programs.

As most of loyalty reward programs, you have a loyalty cards, which allows you to benefit from discounts. 
But there are several aspects that makes Orchestra's card remarkable:
  • You need to pay for it: Some people may think it is awkward  but actually, I don't understand why not so many loyalty programs are payable ones. Indeed, for a customer to enter a loyalty reward programs, it needs to engage with the brand, and therefore, if it is accessible to anyone, the relationship is weaker. Paying a membership fee is a great way to engage, because it is a tangible sign the customers makes to enter into the club
  • You also need to pay every year a fee, 10 € (to compare with the 30 € you need to get in), in order to  keep the benefits. This is also a good idea, because the customers who really wants to be in the club needs to renew its "vows".
  • It offers you 50% off all your purchases years around. Of course, the prices of Orchestra are very expensive. They are far more expensive than the competition. But thanks to the discount, it becomes affordable.
Thanks to this system, Orchestra:
  • Has a loyalty reward programs including people that are really loyal to the brand. I would like to know how much is the average budget of one customer in terms of baby clothings, but paying 30 € simply to get the card is not miscellaneous. That means it is worth getting it if you buy at least 60 € of clothings.
  • The facial value of the benefits (50% off all year around) is so high that it pushes the shopper to get it at the first place, but also to purchase at least for 60 € the first time to benefit from the advantages right away. It improves the probability of a big shopping right from the beginning.
  • They must have a high % of customers that use their card. This is important when you want to make data mining, or simply to target specific customer groups for a campaign, because your transformation rates will be high
  • Because of the investment the customer make, he will tend more to make it profitable, so you will have a higher probability he will come back to your store.
I believe this is a very smart, and I believe that it is very innovative.