Undressing an Online Loyalty Trend


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Flash-sales online retailer Gilt recently announced that it would be offering discounts based on users’ Klout scores. It’s all very sexy, using online media to rank customers and their Word-of-Mouth reach and influence, then reward them based on that ability. Combine that with Gilt’s business model of online flash sales, and you’re in the white-hot center of Trendy Marketing.

But let’s undress this sexy little marketing maven and see it for what it truly is. Once you strip off the cute names and trendy concepts, this play reveals itself as one that any retailer can make. The flirty terminology may catch your eye, but stay with your loyalty fundamentals for three reliable ways to reward your most influential customers:

1. Know your best-value customers: They may be those with the highest lifetime purchasing potential, or those with the most immediate lift potential. Gilt has decided that those who will drive business growth are the customers who are most influential online, so the company found a simple metric for identifying and segmenting that group.

2. Reward for Word-of-Mouth: COLLOQUY found that about 33% of the general population are Word-of-Mouth Champions – those most likely to recommend brands, and with the network in place to share that news across an average of 4.8 communication channels. Loyalty program members are three times more likely to be WOM Champions than those who don’t belong to a program. Gilt appreciates, and recognizes, the power that these consumers have.

3. Make it easy for customers to engage: You may want to offer discounts, rewards tracking and redemption online, but do your customers? Make sure they have options, and that those options are easy to implement, and to change from one to the other if customers so desire. Gilt’s best option is obvious – flash sales demands that buyers be online, so that’s the best channel for engaging with and tracking customers.

The Klout partnership may look attractive, but it’s just good old loyalty fundamentals wearing a different dress. You don’t need fancy clothes to get the job done, the rewards hiding underneath these basic loyalty rules are plenty sexy.

Phaedra Hise
As Senior Editor, COLLOQUY, Phaedra leads the creation of new editorial pieces for multiple distinct content platforms in the COLLOQUY media enterprise: COLLOQUY magazine, the Enterprise Loyalty in Practice journal, COLLOQUY web site, COLLOQUY social media blog, COLLOQUY Network Partner content commitments as well as other LoyaltyOne vehicles.


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