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Barbara Farfan

Birthday Clubs Loyalty Programs Grow With Retailers and Restaurants Even Though Birthday Freebies Arenít Effective In Buying Customer Loyalty (DNKN, FB)

By March 31, 2013

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I'm always reminded to do an annual survey of customer loyalty programs this time of year because this is when every retail and restaurant chain in America becomes my best friend, sending me well wishes and free gifts for my birthday. Happy Birthday to everyone who is willing to exchange personal information for discount coupons and more junk food than is advisable to consume if you want to live to see another birthday. for th

Birthday Clubs used to be considered an effective marketing tool for building customer loyalty. Today, there are more U.S. retailers and restaurant chains than ever that are willing to give you products and services in exchange for knowing the date of your birth. Birthday clubs are definitely a nice goodwill gesture, but do they really have any effect on customer loyalty?

More and more customers are demonstrating that they are loyal to themselves more than they are loyal to any one company. That's the conclusion of a study released this month by Harris Interactive which surveyed people over the age of 18 about how they make their buying decisions. More than half of the survey respondents said they would be willing to switch to another brand or company if it offered more options, more channels of communication, more personalization, or more accessibility.

In other words I want what I want when I want it the way I want it, and I don't really care who gives me what I want in the way I want it when I want it as long as I get it.

There's no surprise that this attitude was expressed mostly by consumers under the age of 44 who are well aware of the wide range of options that are available to them, and have no hesitation about taking advantage of the best option available to them at any given time.

So now we have research to confirm what ever shifting consumer behavior has caused us to suspect. The question is, what's a savvy loyalty marketing retailer to do?

The answer to that question is the same as it ever was and not really a mystery. There's a lot of difference between earning customer loyalty and buying repeat customers. The first requires meaningful customer engagement which has long-term effects. The second requires capital outlay and will last only until a better offer comes along.

Starbucks builds real and lasting customer loyalty with its "My Starbucks Ideas" program. Costco builds customer loyalty with the counterintuitive retailing practices it employs 365 days of the year.

Dozens of retailers try to compete with each other for a customer's attention one day a year with birthday greetings, freebies, and special offers. It's kind of like a personal Black Friday, and we all know how easy it is to capture consumer attention before, during, and after that shopping event.

This is probably not good news to the newest additions to the Retail and Restaurant Birthday Clubs list since this time last year. Bonefish Grill, Ruby Tuesday, Aerie, and Einstein Brothers were probably hoping for something more in return for its birthday marketing program efforts.

Retailers do have the opportunity to engage birthday customers in a meaningful way once those birthday customers get inside their doors. But, you had better be in alignment with the belief that it's better to give than to receive if your complete birthday club marketing plan is the giving away of free stuff.

I do have to give a specific shoutout to Baskin Robbins (DNKN) for their birthday club marketing. It is the only company that I can think of that has been engaging customers with birthday freebies all the way back to my childhood. I can remember getting my free Baskin Robbins birthday scoop postcard in the mail and riding my bike to the neighborhood Baskin Robbins in Wildwood Plaza to claim my single scoop of lime sherbet in a sugar cone. It's a fond memory that still gives me a warm, fuzzy feeling and an annual birthday memory. That feeling of nostalgia is probably why so many of the birthday clubs that are active today are targeted at children.

But as much goodwill as Baskin Robbins has extended to me over the umpteen years that it sent me birthday greetings, I have to admit that i am not a raving Baksin Robbins fan. Well, I'm not really a raving ice cream fan to begin with. But when I do decide to indulge, BR's 31 flavors are not top of mind.

Much more interesting to me these days are the shops like Red Mango that sell probiotic frozen yogurts where I am allowed to serve myself as much or as little as I want in any combination that I want with any combination of toppings that I want. Which takes us back to the survey results cited at the beginning of this blog.

These days customers are demonstrating that they are not so inclined to be loyal customers as much as as they are inclined to be serially monogamous shoppers. Which means if consumers are convinced that a retailer will give them what they want in the way they want it when they want it, then they will be willing to put that retailer at the top of a preferred list. But be warned... if you fail to deliver even once, or if a competitor provides more of what your customers want in more of the way they want it, consumers won't hesitate to bump you off the preferred list and get their retail fix somewhere else.

That said, are birthday club marketing programs even worth the effort any more? Birthday Clubs can certainly generate positive good will, which is always a plus for any retail brand. If the birthday marketing offer is designed with a condition that will yield more sales from additional diners or additional purchases, it's worth the effort to the retailer, although probably not as often redeemed by the recipient. If you use your birth date data acquisition for effective targeted marketing programs throughout the year, then the Birthday Clubs data acquisition smoke screen is definitely worth the effort.

If retailers are wanting to buy some kind of future long-term loyalty with an annual free scoop of ice cream, though, they will probably get the best results targeting only customers born before 1969.

I have to admit that one company does buy my loyalty each year on my birthday. That company is Facebook (FB). Admittedly, I am not a big fan of Facebook 364 days of the year. But when birthday greetings come rolling in from a collection of people that I have connected with over an entire lifetime, I think Facebook is the most brilliant invention for modern man. I'll start scorning you again tomorrow, Mark Zuckerberg, but just for today you can count me among your loyal Facebook fans.

Even though I end up redeeming very few birthday offers sent to me by retailers who want to be my BFF for the day, I do appreciate receiving them. It's the computer generated thought that counts, right? I think I will go look for my lime sherbet coupon, however, because after revealing my despicable lack of BR loyalty, chances are good that I will be kicked out of the BR birthday club by this time next year.

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April 1, 2013 at 1:39 pm
(1) Erik says:

People interested in birthday freebies can also use a search engine for national and local freebies related to birthdays which aggregates all of the relevant birthday deals and offers together in one location.

April 1, 2013 at 2:31 pm
(2) Shelley says:

I’d love to see the Harris Interactive survey report you refer to, but when I clicked your link I was unable to find it. Can you provide the link to the actual report?

April 3, 2013 at 2:50 am
(3) retailindustry says:

Hi Shelley! You can Google Harris Interactive US Consumers Ditch Brand Loyalty Personalized Service. It’s a survey conducted in February, 2013 and released in March, 2013. Interesting research!

April 5, 2013 at 8:19 pm
(4) Art says:

I think you’re right about restaurant birthday clubs waning appeal to build brand loyalty, especially with the 44 and under crowd.

So what explains the growth in restaurant chains that are using them? Though loyalty programs might fall short of building legacy style loyalty they do promote brand awareness and profits. Getting you to come in for your birthday is a rare opportunity to do both. People dine with larger groups on their birthday and the average spend per person is considerably higher. The celebrant’s companions are also exposed to a venue they may not have otherwise visited.

A restaurant loyalty club now requires a chain to have an actively managed email list, Facebook page and Twitter feed. Birthday benefits provide strong ROI with the “under 44″ crowd when the marketer integrates them with their social media strategy.

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