Members only? Or “Members Only” jacket?

A powerful component of customer engagement is providing scarce, exclusive and relevant experiences that reinforce your brand positioning.

“Members Only” or “By Invitation Only” marketing programs can be compelling messages that tell your customer that you truly appreciate their business.   For years leading luxury retailers such as Bergdorf Goodman and Barney’s have feted their best customers with private lunches, exclusive parties or access to fashion designer “meet and greets.”  More accessible retailers like J. Crew and Nordstrom use their loyalty programs to reward members with unique privileges such as free alterations, early notice of new merchandise arrivals or special shopping hours.  In all cases, the customer is granted access based upon some meaningful qualification, typically spending level or loyalty.

But another kind of marketing seems to be gaining momentum, and it’s best illustrated by the flash-sales sites such as GiltGroupe, HauteLook and BeyondTheRack.  These businesses are growing dramatically–RueLaLa recently reported that their sales doubled year over year–and one of their hooks is that their low prices are for “members only.”   So what does one have to do to qualify to be a member?  Having a legitimate e-mail address is just about all it takes.

In the early 1980′s “Members Only” jackets quickly became all the rage.  If you wanted the world to know how cool you were, a “Members Only” jacket gave you quick access to an exclusive club.  But it wasn’t long before just about everybody had one and what propelled the brand soon eviscerated it.

There is ample evidence that, for a while, you can get away with hooking customers with faux exclusivity.  But just because you can, doesn’t mean you should.  Deep levels of engagement and loyalty are not built on smoke and mirrors; rather they are built on forging relationships rooted in respect and trust.

Authenticity matters.

Does your marketing look more Members Only or more “Members Only” Jacket?

It’s the Experience Stupid! Why Retailers Need to Move Away From Product-Centricity

As I approach my 20th anniversary in the retail industry I continue to be amazed at the number of senior retail executives who go on and on about how “it’s all about the product.”  Nonsense.

Don’t get me wrong, product is anywhere from pretty important to very important depending upon the particular retail concept and the consumers they target.   But the total customer experience is the most important driver of success in retail.   Think about the last thing you bought.  Chances are there were multiple places you could have gone to buy that product.  Why did you end up buying where you did?  Price?  Convenient location?  Great customer service?  Compelling environment?  Easy returns?  Informative web-site?  One-stop shopping?  Loyalty program points?

At Neiman Marcus one of the things we looked at is why customers, when faced with identical product and identical prices from multiple retailers in the same mall, ended up buying an item at a particular retailer.  With rare exception it was some aspect of the customer experience–customer service or store environment–that was the differentiating factor.

It’s easy to understand why most retailers are product-centric.  They are run by merchants, and merchants spend their life picking product, allocating it and monitoring sales, margin and turnover.  Few have any background or experience with marketing or customer insight.   Retailers are organized by product category, not customer segments.

More and more we see retailers that emphasize customer-centricity over product- centricity–whether it’s Zappo’s, Nordstrom, Best Buy or Coach–leading the way.

How’s your company doing?