Is The Anti-Loyalty Program A Fun Way To Get Competitor Intelligence?

Written by Evan Schuman
April 15th, 2010

A UK coffee retailer had an unusual idea, something he called a Dis-Loyalty Card. It was designed to take customers coming into his shop and to reward them for leaving and visiting that shop’s direct rivals. Crazy? Brilliant? Perhaps both?

The idea was for the retailer to give customers an actual Dis-Loyalty Card, with the names, addresses and some of the logos of 10 rivals. The consumer would be sent to those 10 locations, where the rival would be expected to stamp the card and send the consumer back to the original shop and be rewarded with a free coffee. Setting aside the cheapness of it (You want me to travel all around London, paying for 10 cups of coffee, and my reward is that you’ll give me a single cup of coffee for free?), there’s a powerful element of confidence in the program. Why would a retailer launch such an effort if she wasn’t remarkably certain that her product blew the others away?

This program provoked some insightful arguments on both sides over at RetailWire. Some of the comments focused on the practical aspects, such as the belief that few rivals would cooperate by stamping the disloyalty card. But that misses the point.

To break through the clutter of marketing messages today, a contrarian approach often works wonders. But if you add some mobile technology and a bit of fun to this idea, it has even more intriguing possibilities.

What if instead of a disloyalty cardboard card, this approach became a disloyalty mobile app? Perhaps an iPhone app? Instead of forcing the rival store to do anything, the phone’s GPS (geolocation) kicks in and confirms that consumers are where they claim to be when they click an icon for that rival retailer.

To prove a purchase, the customer would use the app and take a photo of what was purchased, the current menu on the wall and of the receipt. The app then transmits those images, neatly time-stamped and associated with that rival. And in each rival location, the customer is told to shake his phone—another mobile-only feature—and it will display his reward for that visit. It would be chosen randomly, just as the iPod might do during a Shuffle.

Now sit back and look at what you have. Your customers—especially the younger ones—are actively engaged in a fun treasure hunt, one that always ends back at your shop. And you’re getting a steady flow of intelligence reports about your rivals’ pricing and product presentations.

Talk about engaging the customer. Yes, you certainly could take this approach and limit it to other parts of your own chain. But you’d lose the competitor intelligence aspects as well as the message underlying the program: We really know our product is superior.


4 Comments | Read Is The Anti-Loyalty Program A Fun Way To Get Competitor Intelligence?

  1. cestmoi Says:

    What a smart way to find out how much your competitor’s are doing in terms of pricing and new offerings! Very smart indeed.

  2. JeremyNYC Says:

    Um…couldn’t you just walk into your competitors’ stores yourself?

    Showing off your confidence: valuable. Engaging your customers: valuable. Paying a whole slew of your customers to gather information that you could pay one intern to gather: big ‘ole waste of money.

  3. Evan Schuman Says:

    Not so sure. First, you’re not PAYING your customers per se, other than offering them discounts and coupons that you’d likely be offering to your customers anyway. The intern presumably has to be paid. But there are a lot more customers and if you have many rivals and lots of stores with each one, this could make some large-scale efforts practical. The app could organize this constantly updated information, to allow you to consistently keep your prices lower (but only a little lower) and get you an instant heads up to some new offering or change that they’re pushing. And it includes pictures and possibly video of new offerings.
    Perhaps even more importantly, you’ve made your customers into an army of loyalists. Talk about a loyalty program!

  4. Joel Says:

    I’m not sure about the long term benefits of this program for each customer. I don’t know if I want to lose another 10 customer visits for each time this is completed… I think it should be blended into a comprehensive loyalty program. Phase one, drink 10 cups here; phase two, drink 10 cups at competitors; phase three drink 10 here; phase four, buy coffee and pastry here…
    The value of this particular visit concept cost too much over time. the idea is to show your strength in product and pricing in the market to you customers, not to continually shove business out the door. Once each customer completes this task, then it no longer serves the purpose of showing your brand and product excellence, it’s just losing business. But it is certainly a innovative idea that needs to be supported by other concepts.


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.