black friday rewards
Retail - Consumer Goods (CPG)

Black Friday Fueled by Customer Loyalty

Photo by Jantine Doornbos

(Updated: December 11th, 2019, 3:00 PM) Editor’s note: One of the most valuable services we provide our readers is to stimulate what I call “Continuity Thinking”. It’s easy today to become overwhelmed by just keeping up with news, information, and trends. And, since most of us have financial objectives tied to our business, we are always looking forward, sometimes not pausing to take stock of changes over time.

Continuity Thinking, the way we define it, is linking together specific points-of-view on topics and trends using reporting that we’ve done weeks, months, or even years apart in order to validate a theory or identify a new trend. In this Black Friday article we noted the frequency of loyalty-related offers populating our inbox. This was surprising during a season focused on deep-discounts and we cited several examples of offers being circulated. We wondered if retailers were slightly shifting from a run and gun discount approach to provide more attention to existing customers.

In 2019, the theory that retailers and brands were attentive not just to snagging new customers with a price-driven offer but to connecting with customers to develop longer-term relationships was validated. You can read our current article on how Black Friday is evolving into a Golden Quarter of retail activity that encompasses Thanksgiving, Black Friday, Cyber Monday through Christmas and Boxing Day. Enjoy reading both articles and see what additional linkages you create as your own Continuity Thinking evolves.

While most of you were focusing on snagging a deeply discounted offer on Black Friday, I was distracted by something different in my inbox. As I scrolled through (also looking for a few deals) I could not help but notice the plethora of loyalty related offers. Although an unscientific calculation, I think the number of subject lines in emails I received on Black Friday and the ensuing weekend had more references to customer loyalty than ever before.

What’s going on and were any of the “loyalty” offers compelling?

Ride share company Lyft, has made an announcement that it would launch a customer loyalty program sometime in December. The announcement was made near the time that Uber had gone public with its new loyalty program, so the structure of Lyft’s program is highly anticipated. The email from Lyft promoting its partnership with Delta Airlines initially had me thinking this was a precursor to their broader offer. Reading more closely, I remembered that Lyft had been in partnership with Delta since mid-2017 and the email I received was simply a promotional reminder.

Thinking about how Lyft might structure its new program, I also remembered the company has been testing various levels of a subscription model. Designed to attract consumers leaning away from the traditional car ownership model, Lyft’s All-Access plan includes 30 rides (limit $15 each) for a monthly cost of $299. Subscribers can pay the difference for any rides exceeding $15 and receive 5 percent discount on any rides beyond the package of 30. Loosely related was an email received that offered “50% off 10 weekday rides until December 5”. This message could have been purely promotional or a subtle test of engagement with customers interested in buying packaged rides, a precursor to a subscriber plan.

For Lyft to go beyond a response on par with Uber’s point-based program, it needs to get creative. Building its program around subscriber products would be one way to take a stand and try to capture the market of people interested in ride share as a way of life. They could also build on the Delta partnership to expand into other related categories and create an offer for their “members” to add value that intuitively makes sense and is attractive to their core traveling customer.

Also Read: How to Manage Customer Loyalty During the Holiday Shopping Season

Speaking of partnership, Chase floated an offer with Shell to let customers enjoy complimentary Gold Status at Shell through the Fuel Rewards® loyalty program. With this status, customers save at least 5¢ per gallon (up to 20 gallons) on every fill-up at Shell stations through the end of calendar 2018. The offer is predicated on becoming a member of Fuel Rewards Network, a program powered by Excentus. If you missed it, we posted a great interview with former Excentus President and now SVP Marketing Services PDI Brandon Logsdon in the past week. You can find that interview here. Chase is busy with several partnership offers, with a separate offer extending discounts on financing of a new Jaguar or Land Rover through this holiday season.

Less well-known brands were drumming up loyalty noise as well. Kayak, Canoe, and Outdoor e-tailer Paddling.com promoted its subscription-based program, Paddling Perks, during the weekend. There are 3 levels of membership available with annual fees ranging between $25 – $60. The membership fee is nearly offset by a package of SWAG including free shirts, hats, keychains, and stickers, but the real value that differentiates the levels are store coupon codes, free shipping, classified listings (lots of trading of used equipment takes place in this world) and 10%-member discounts. Stack up the value and Paddling.com touts that as a Premium member, you can receive” $120 in instant value for just $60″.

Probably because this is a niche product site, the e-tailer smartly is taking time to understand the wishes and spending power of different groups of customers and has designed the member levels to meet specific needs. The casual shopper may not see the value in joining a subscription-based program, but that’s ok. By nature, the subscriber model is meant to engage, retain and grow wallet share of the most avid customers in a particular category. One footnote on an otherwise good impression of Paddling Perks, visit the site’s home page and you won’t see any mention of the program. At the least, the program is not receiving significant reinforcement for home page visitors.

I also noticed a few trends during this Black Friday holiday:

1. There was a significant increase in offers designed to build a relationship with the customer, not just push out product for 30/40/50% off. All retailers would be smart to ponder this subtle shift. Why put all the marketing marbles on what has traditionally been a weekend promotional period using price-based incentives? Why not use the opportunity to sell now, while setting the stage to keep that customer around in the future?

2. Partnerships continue to be recognized as an effective tool to attract customers. I coined the term “Smart Partnership” a few years ago to describe how compatible brands can link up to create offers as a new avenue for customer acquisition, increased spending, and longer-term relationship building. The tactic is being seen more frequently and for good reason. In addition to customer related benefits, the brands which partner can deliver an effective marketing campaign without the complexity of what some would call “coalition loyalty”.

3. Overall, it seems the concept of Black Friday is changing. Originally Black Friday was the domain of brick and mortar retailers while Cyber Monday was the e-commerce response. Now, with Black Friday delivering offers through multiple channels and extending into a full weekend of activity, the holiday discount stream never seems to stop. “Up to 25% off”, $39 off with BOGO storewide”, “Cyber Week Flash Sale”, “1 day left” were just some of the subject lines jumping off my screen today. As retailers continue to embrace a multi-channel approach to serve customers, the line between Black Friday and Cyber Monday will become less relevant. The two could easily blend and come to mean more than anything that the holiday season is here!

Bill Hanifin is CEO of The Wise Marketer and is a Certified Loyalty Marketing Professional (CLMP).

Black Friday Fueled by Customer Loyalty
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