eDM offers result in 'bad loyalty', says Bookworld CEO

Online book retailer says it's putting the emphasis on engagement with 'citizenship' customer loyalty program

Prompted action via eDMs is a “vicious circle” that only encourages “bad loyalty”, according to Bookworld CEO, James Webber.

During a presentation at the Ad:Tech 2015 conference, Webber described how Bookworld’s customer engagement strategy draws from the failings of the now defunct Borders book shop loyalty program.

Following the closure of Borders in 2011, the company was bought out by media conglomerate, Pearson, which rebranded the Borders website as Bookworld, an online-only book retailer.

The company has since worked on developing a new loyalty strategy focused on interaction and engagement, rather than just prompted action based on special offers and one-off discounts.

“Engaged consumers are 23 per cent more profitable than the average consumer, so we knew the time and effort into making customers more engaged was going to pay off,” Webber said.

“We had the loyalty programs and we had promotions [with Borders], which drove traffic, but they don't drive the same emotional connection to a brand than some other forms of engagement. It's that emotional connection that’s probably the biggest indicator of long-term profitability and growth.”

Bookworld’s answer to this is ‘citizenship’, a loyalty program where users sign up for free to receive 10 per cent off all listed prices.

The new program has been responsible for a huge amount of Bookworld’s growth, accounting for 80 per cent of overall sales and 60 per cent higher sign-ups to marketing. According to Webber, ‘active’ citizens purchase 20 per cent more than the average citizen, and revisit the store 70 per cent more than the average consumer.

Bookworld is also using eDMs and social marketing to invite ‘citizens’ to vote for which products they want to receive special offers on, or where to set up the company’s next pop-up campaign.

Related: 4 brands making customer loyalty programs work
Why Fitness First is dropping its customer loyalty program and turning to data

Webber explained how, prior to its closure, Borders relied heavily on “prompted activity” through emailed promotions, which he saw as an ineffective loyalty tool.

“That leaves the consumer sitting and waiting for an email… and over time, they become addicted to these emails, and they won't come into your store until you send an email,” Webber said. “Why? Because they know another one is coming soon.”

What’s worse, management also becomes addicted to the eDM system, relying on this cycle to pull through if sales are low, Webber claimed.

“What’s happened, of course, is you over use this, and the more you over use it the more you create a diluted experience. I call this a 'vicious circle'... a 'prompted action' circle,” he said.

The next challenge for Bookworld is how to continue providing value to its ‘citizens’ following a hiccup with Google Shopping. As the new tool doesn’t list products with membership pricing, Bookworld was forced to make ‘citizen’ prices universal.

“The problem was what happens to our citizens? They used to get 10 per cent off,” Webber said. “The answer to that, unfortunately, is they get emails and promotions, which means we're now back into the [vicious cycle]... we won't be staying there. We will change that.”

CMO Australia conversation on LinkedIn: CMO Australia, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

More Videos

Google collects as much data as it can about you. It would be foolish to believe Google cares about your privacy. I did cut off Google fr...

Phil Davis

ACCC launches fresh legal challenge against Google's consumer data practices for advertising

Read more

“This new logo has been noticed and it replaces a logo no one really knew existed so I’d say it’s abided by the ‘rule’ of brand equity - ...

Lawrence

Brand Australia misses the mark

Read more

IMHO a logo that needs to be explained really doesn't achieve it's purpose.I admit coming to the debate a little late, but has anyone els...

JV_at_lAttitude_in_Cairns

Brand Australia misses the mark

Read more

Hi everyone! Hope you are doing well. I just came across your website and I have to say that your work is really appreciative. Your conte...

Rochie Grey

Will 3D printing be good for retail?

Read more

Very insightful. Executive leaders can let middle managers decide on the best course of action for the business and once these plans are ...

Abi TCA

CMOs: Let middle managers lead radical innovation

Read more

Blog Posts

The obvious reason Covidsafe failed to get majority takeup

Online identity is a hot topic as more consumers are waking up to how their data is being used. So what does the marketing industry need to do to avoid a complete loss of public trust, in instances such as the COVID-19 tracing app?

Dan Richardson

Head of data, Verizon Media

Brand or product placement?

CMOs are looking to ensure investment decisions in marketing initiatives are good value for money. Yet they are frustrated in understanding the value of product placements within this mix for a very simple reason: Product placements are broadly defined and as a result, mean very different things to different people.

Michael Neale and Dr David Corkindale

University of Adelaide Business School and University of South Australia

Why CMOs need a clear voice strategy to connect with their customers

Now more than ever, voice presents a clear opportunity to add value to an organisation in many ways. Where operational efficiencies are scrutinised, budgets are tighter and discretionary consumer spend at a low, engaging with an audience is difficult.

Guy Munro

Head of innovation and technology, Paper + Spark

Sign in