Bring ‘Em Back for More

Q. How much do you think a cataloger should spend on a loyalty program?
A. The merchant has to decide what it can afford to give up in order to get someone to participate in the loyalty program. If customers are going to participate, it’s because they get something. The cataloger probably will need to review some profit-and-loss statements. If you have a membership fee, how much do you need to charge to offset the cost of what you’re giving up? You don’t want to give things to your best customers who already are spending money with you in a big way and then not actually increase the value of your average customers.