nordstrom rewards
Loyalty Strategy

Smart tiering brings new life to Nordstrom rewards

We saw the same press releases and news bits that you did last week when Nordstrom rewards announced their revamped program, now named “The Nordy Club”.  The news was accompanied by the requisite gushing & genuflecting from the retail press but we wanted to get a peek behind the program curtain, if you will, before joining the chorus of praise.

What we found is a program that appears to be very well thought out in many respects.

  • Smart Tiers
  • Attainable & Valuable Rewards
  • Solid Earning Velocity
  • No Visible “Trap Doors”
  • Smart Assimilation of Existing Members into the Program

Smart Program Tiering

Nordstrom’s new club offers customers 4 distinct levels of spend-based membership, each with its own set of benefits.  Each tier automatically ladders up into the next once spend thresholds have been achieved.

“Member”                   $0-$499 / year

“Insider”                      $500+ / year

“Influencer”                $2000+ / year

“Ambassador”             $5000+ / year

Rewarding

We’ve talked a lot recently about how loyalty program managers have a tendency to focus on those moments on the customer continuum that involve spending while essentially ignoring those moments that don’t.  So it’s particularly refreshing to see that Nordstrom has assembled a series of reward packages that are designed to convey customer value outside of spend. Rewards include such expected benefits as “first-to-shop” opportunities and free alterations, but also go further by layering in things like “double points days” and invitation-only events.

Earning Velocity

For the basic program, 1 dollar spent equals 1 spendable point.  That’s a very typical point value in the retail world.  Credit cardmembers earn rewards 3X faster—3 points per dollar—versus 1 point per dollar using another form of payment. Debit cardmembers will earn rewards 2X faster (2 points per dollar).

And, as noted above, Nordstrom has structured their program tiers in such a way as to encourage continued participation by making each subsequent level reasonably achievable.  It is very conceivable that Nordstrom loyalists could move up through multiple levels in the same year.

Trap Doors

Companies have any number of ways to manage program liability and/or contain unbridled point accumulation.  Cursory evaluation of The Nordy Club, though, reveals a straightforward approach to earning & spending with no apparent trap doors or unreasonable asks of members.  To be sure, Nordstrom retains the authority to change program parameters at their discretion but the company has a long-standing reputation for a high degree of customer love. Thus, we see this as a good bet.

Assimilation of Existing Members into the Program

At or near the top of Nordstrom’s rollout criteria had to be the integration of their existing program members and cardholders.  After all, if you can’t efficiently assimilate your most valuable customers into the new program, you’re starting from a huge deficit position.  The good news for existing Nordstom loyalists is that they’ve been automatically enrolled in the new program and if you are a cardholder, you were automatically enrolled at the “Insider” level giving you immediate access to a slew of new benefits.  We would call that smart assimilation.

The Nordy Club doesn’t necessarily break new ground but it is, in our opinion, a very well-considered program run by a company that has a long history of doing right by its customers.  So if you’re already a fan of Nordstrom and the way they do business, you’ll likely appreciate the new program and its new benefits.  If you’re not, it might be time to go see what you’ve been missing.

Mike Giambattista is Editor in Chief at The Wise Marketer and is a Certified Loyalty Marketing Professional (CLMP).

Smart tiering brings new life to Nordstrom rewards
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