Office Depot recently launched a new "points" rewards program that it hopes will keep customers coming back to its office-supply stores.
The program began in July so there are no significant metrics, but early results are encouraging, said Steven Rado, senior vice president of customer strategy.
"Loyalty is critical today in business," Rado said.
Like its previous rewards program, Boca Raton-based Office Depot gives a 10 percent discount on ink, toner, paper and print services when a customer spends $100 during a quarter. But members also receive rewards certificates for every 1,000 points they earn through purchases, connecting with Office Depot by completing an online profile, or recycling ink and toner cartridges. One thousand points equals $10 in rewards certificates.
If customers reach $200 in purchases during a quarter, they get another 5 percent on five additional product categories of their choice.
Boca Raton-based retention expert JoAnna Brandi said with small business owners and consumers watching their pennies, Office Depot has a good idea for a program that makes a dent in everyday expenses.
"But if I don't get treated well, I don't care about a loyalty program," Brandi said. "In order for a rewards program to work, you still have to deliver a fabulous experience."
To achieve that, store employees have to know its their job to build loyalty, she said. "The bonus is, I get points too. If employees think it's the program's job to build loyalty, you're giving away money."
Rado said the company did extensive research to improve its rewards program, looking at the best programs used by airlines and credit card companies, and getting customer feedback.
Consumers on average are enrolled in more than seven loyalty programs but every year more than half of those members stop participating in at least one program, according to the 2013 Maritz Loyalty Report. Those that leave programs cite irrelevant reward offerings and slow reward accumulation.
"Engaging customers through points was more valuable. Customers like to be consistently rewarded," he said.
Office Depot, which has proposed a merger with Naperville, Ill.-based rival OfficeMax in an all-stock deal valued at $976 million, has been ramping up its interactive strategies to attract a younger demographic to its 1,100 retail stores across the nation.
Rado said Office Depot's rewards program is different from those offered at OfficeMax and Staples, which provide straight discounts.
OfficeMax's "MaxPerks" rewards provides a 5 percent discount on supplies, furniture, technology and services for return customers who sign up.
Massachusetts-based Staples said it began a new rewards program in March that gives members 5 percent back on everything, including technology and services, and provides free shipping on Staples.com.
The new Staples program also gives escalated awards as customers spend more.
Office Depot said its new rewards program is more flexible than its previous one, allowing the retailer to target promotions specifically to loyal consumers, small businesses and teachers.
A recent "Back to School" promotion invited teachers to Office Depot for a Saturday breakfast, giving them a 20 percent discount on their purchases during that week.
Customers sign up for rewards as "loyal customers, small businesses or star teachers," which helps Office Depot target those groups for additional promotions, Rado said.
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