The Customer Loyalty Solution : What Works (and What Doesnt) in Customer Loyalty Programs

Overview

Catalogs are the fastest-growing and most profitable direct marketing method in use today. The old Sears Roebuck and Montgomery Ward big books are gone forever. But what has replaced them are 16 billion small specialized catalogs that are mailed each year to millions of U.S. households. Why are catalogers succeeding today?

• Lightning-fast fulfillment. Remember “allow 6 to 8 weeks for delivery”? Who can stay in business today saying that? Many catalogers today even offer next-day service. That means that they have streamlined their warehouses and have UPS and FedEx trucks constantly backed up to their doors.

• Massive exchange of names. North America is about the only place in the world where you can rent the names of mail-order buyers. In almost every other country in the world, marketers hold customer names in an Al Gore “lock box.” Helena, my wife, is an avid catalog shopper. She gets from six to ten catalogs a day, all year long. She loves them—she reads every page of every catalog as if they were novels. As soon as she places an order, the cataloger immediately rents her name to dozens of other catalogers, who rush to fill our mailbox. Without this universal name exchange, the U.S. catalog industry as we know it would soon die.

• Universally available credit cards. Not only do all catalogers depend on them, but all consumers have them. Just about every American family receives at least two credit card solicitations per week. What does this mean for the catalogers? Financial success. The problem of getting paid for products has almost disappeared.

• No-hassle return policy. Modern catalogers make it very easy to return merchandise—and the best ones pay the return postage. Customers may exchange or get a credit or a full refund with no questions asked! Such service was unheard of a decade ago, but it has become standard; 20 percent of all items ordered are returned.