Merchant-Funded Malls Are Better Than Ever
I often speak with companies whose merchant-funded malls have not worked as well as they would have hoped.
They are at a loss as to why that is. They tell me things like people just don’t want to use these types of programs anymore or that their customers tell them it is too hard to find what they want. Others complain about lost tracking or members clicking out to one store and then just moving on to others without coming back.
The next thing companies talk to me about are in-store offers and how those are all that their members really want. The complaint they have here is that there are not enough good offers out there. And the final thing they tell me is that it costs them too much to run the program. When you talk about merchant-funded malls and in-store offers, you have to realize three groups are involved here. The first group is the company running the program. Second, is the member. Third, are the merchants paying the rewards.
Each of these three groups is looking for something here. The program wants loyal members, the members want their rewards, and the merchants want more business. The goal is then to make sure all three groups get what they are looking for without too much cost to them.
When I talk about the cost for the program and the merchants, then we are talking about money. And when we talk about members, we are talking about convince. Now, the million dollar question is how we do this for all three? The reason that it costs too much for the program is simple: there is not enough engagement to pay for itself. What you want to do is get more engagement and take the program from a cost center to a profit center.
For the merchants, they need more engagement as well to make it worth their while. The reason that they prefer online malls to in-store is because it is cheaper. When I say cheaper, I mean both in cost of goods sold and in the amount they have to pay. It is always cheaper for them to sell online than in a brick and mortar store. This is because of both cost of space and the cost of employees.
Engagement From Everyone
So how do we get more engagement and make everyone happy? Easy … make it easier on the member to use the program.
The design of the mall and the way that they get information about the things they are interested in will make all the difference in the world. The idea should never be to get rid of the mall when if you would just make it better then it would become a game changer for all three groups.
DBG Loyalty is a leading innovator in loyalty and rewards marketing. DBG was founded in 2002 because the industry was looking for a trusted technology leader who could develop and establish consumer loyalty programs. DBG has customer relationships which span from the time of inception.
Latest posts by DBG Loyalty (see all)
- Are You Watering Your Merchant-Funded Loyalty Program? - February 5, 2016
- Casinos and the Loyalty Experience - November 4, 2015
- Thank You, Loyal Patient – The Doctor Will See You Now - September 2, 2015