5 Ways to Earn Retail Loyalty – Lessons from Kohl’s

I’m a Kohl’s customer and have been for a long time. For me, they offer quality merchandise at an affordable price – – especially when I use one of their many savings options (coupons, reward dollars, etc). I think I’m like many Americans today – the Great Recession is still in our rear view mirror, we lack confidence in the economy’s future and we have become “savers”. When gas prices fell earlier in the year, the hope was that Americans would put that extra money back into the economy, but that hasn’t happened. This is bad news for retailers. In order to feel okay about spending money today, consumers have to believe that they are getting a good deal, which is one of the reasons I shop at Kohl’s. The other reason I shop at Kohl’s is because they have earned my loyalty. They have several different marketing programs in place that help drive loyalty. Here are a few that may provide some ideas to help you drive loyalty as well:

Marketing ideas that help drive loyalty

Offer consistent savings programs

Kohl’s is infamous for sending out their 15-20-30% scratch off/peel off coupons, as well as other steady promotions. These types of offers arrive in the mail on a regular basis and customers have come to expect them. The double-edge sword here is that customers will wait for them before heading to the store, but they are a reliable method in driving sales. By offering customers an incentive to save money on a regular basis, they will begin to form a habit of visiting your store on a regular basis as well, ensuring loyalty.

Create an exclusive club

For years I resisted signing up for a store credit card from Kohl’s. But time after time, I would witness other customers using coupons that I did not have. How did they get them? They were Kohl’s credit card customers. Soon after signing up for their card, I earned MVC (Most Valuable Customer) status (which happens whenever you spend more than $600 per year). With MVC status, you earn savings rewards that other customers do not. For example, those 15-20-30% off deals – they come your way a lot more often when you have MVC status. By offering customers a membership to an exclusive club, you elevate the sense of value and prompt customers to join, activating loyalty.

Give customers cash.

Many times throughout the year Kohl’s will giveaway Kohl’s cash, usually in conjunction with their 15-20-30% off sales. When a customer purchases $50 in merchandise, they receive $10 in Kohl’s Cash that can be used, typically, a week later. The cash is actually store credit and is only available for use for just a few days, however, it drives customers back into their store just a week after they made a purchase. On top of that, customers typically spend beyond the Cash that they earned, which further increases sales. By offering customers a reason to return to the store, YOU will be the one cashing in on sales.

Create a loyalty program

Kohl’s was late to the loyalty game with their Yes2You Rewards Program, which they launched in October 2014 after testing for 18 months. However, the program reaches beyond their private label cardholders and is expected to net 35 million members by the end of 2015. The program is simple (members earn one point for every dollar spent and 100 points gets you a $5 reward) and, unlike a credit card, it does not require any approval to join. Customers simply provide their Yes2You loyalty card or mobile app at the checkout to rack up points. By offering a loyalty program that is open to your entire customer base, you multiply the opportunity to win more loyal customers.

Update product offering.

Being loyal to a brand isn’t always about the savings – it’s about the merchandise too. If your customers are not happy with your merchandise, they are not going to pay for something they don’t like, regardless of how cheap they can get it. In 2014, Kohl’s began to shift away from their private label brands to focus on recruiting several national brands, such as Madden Girl, Columbia, Samsung and more. It’s the well-known brands that attract customers and drive traffic into the stores. This shift helped to reinvigorate customers who had strayed due to meager merchandise selections.   By offering merchandise that is in-line with today’s trends, you give customers a reason to return to your store if they have strayed – and you may just make them a loyal fan again.

These are only a few of the tactics that Kohl’s employs to increase customer loyalty and revenue. In 2014 they launched a strategic initiative dubbed the “Greatness Agenda” that is helping the company drive top-line growth by focusing on five key pillars: amazing product, incredible savings, easy experience, personalized connections and winning teams. They have a great ominchannel approach to marketing that continues to help drive sales, even when customers are holding on tight to the purse strings.