Acquiring and breeding loyal customers is one of the toughest challenges that every retailer faces. Companies battle that issue through the creation of customer loyalty programs. Those who frequently make purchases are rewarded. They can receive free merchandise, monetary rewards, or even advanced release products.
But are these loyalty programs truly effective or are they just distractions from creating real relationships with your customers?
David Segal, Co-Founder of DAVIDsTEA, will explore that today’s programs don’t breed the results companies are looking for. True customer loyalty—mad loyalty—is about making your customers fall in love. In the digital age, customers value products and services far more than points and freebies. They crave loyalty to businesses who speak to who they are, and this is often where most companies are found lacking.
“The best brands don’t always have loyalty programs,” says Segal. “With companies like Apple and Nike, consumers place a high value on the innovation of their products.”
Segal grew the company from a single store on Toronto’s Queen Street West to a $200 million retail giant. In June 2015, the company become publicly traded on NASDAQ, and since its launch, the brand has been featured in the Wall Street Journal, Women’s Wear Daily, The Globe and Mail, and Fast Company. When Segal left the company last year in March to pursue new entrepreneurial endeavours, DAVIDsTEA was number seven on the list of Canada’s most trusted brands.
“The tea market was a stagnated experience,” explains Segal. “DAVIDsTEA was successful because it did a great job at redefining and creating a sensory experience for the customer.”
When you’re in business for a while, you start to think about how you could have done things differently. But if given the choice, one thing Segal would do differently would be to avoid the loyalty program trap. Instead, he would choose to work on enhancing the customer experience in-store and create a genuine sense of loyalty that keeps customers coming back for more.