Loyalty Case Study: Loblaws’ PC Plus
President’s Choice is arguably Canada’s most well known line of store brand products. The brand was started by the food retailer Loblaw Companies Limited but has spread into about a dozen different grocery stores. (If you haven’t tried their Decadent Chocolate Chip Cookies, you’re definitely missing out.)
Loblaws decided to leverage this outstanding reputation with a rewards program in an effort to keep their best customers happy and attract new ones in the process. In the 90s they started a customer loyalty program called PC Points, a straightforward points system available at a few Loblaw’s grocery stores. Over the years, this program continued to grow and evolve into what is now known as PC Plus – a reward system that still uses points as currency, albeit a little more skillfully.
Though grocery store loyalty programs are their own particular beast, PC Plus is a great example of how a company can delight customers with customer loyalty. That being said, not everything is chocolate chip cookies and grocery savings. While PC Plus provides an amazing (and delicious) experience for their customers in many ways, they also have the potential to annoy those same customers with other aspects.
PC Plus’ Recipe for Customer Delight
When you’re cooking or baking, it’s fairly standard practice to follow a recipe. Let’s see what ingredients PC Plus requires to whip up an amazing customer experience.
1. Rewarding for Routine Purchases
This, more than any other elements, is what truly sets the PC Plus program apart. Loblaws has designed their program to record each customer’s individual purchasing data each time they swipe their rewards card. Since customer purchase groceries so regularly, PC Plus has the ability to customize their points program week by week.
They do this by providing tailored “offers” that look something like coupons but are accessed on a mobile device or through the PC Plus website. At least half of these offers are for products the customer is already likely to buy based on their previous purchase activity. This makes being rewarded, and experiencing the resulting positive associations with the PC brand, very easy for the customer. They don’t have to go out of their way to to rack up points.
These custom weekly offers are also extremely useful for Loblaw’s. For one thing they encourage customers to buy more products at each visit. When the customer sees an item on offer that they already like (say chocolate or fancy coffee) and recognize that they’ll get bonus points for buying it, it’s suddenly very easy to grab that item and put it in the cart.
Secondly, these regular offers allow Loblaw’s to easily align with the customer’s tastes and values. They build an individualized relationship by acknowledging products that are important to that customer. This relationship is what causes customers to trust the Loblaw’s brand, creating a switching cost that will keep them from shopping with competitors in the future. After all, if a store is able to anticipate your every need, why would you need to shop anywhere else?
2. Simple and Effective Mobile Functions
In a world where people are practically glued to their devices, a strong mobile app goes a long way. This is especially true in the food and beverage industry, where Starbucks has set the new standard for efficiency and excellent customer service with their My Starbucks Rewards app.
The PC Plus mobile app works well because it’s straightforward and provides only the functionality the customer needs. You get weekly offers, a history of your transactions (including how many points you earned), a map to help you find nearby stores, and a barcode that works in place of a physical card. See? Uncomplicated and functional.
With pocket and wallet space being so limited these days, going mobile is the most obvious and convenient option for the PC Plus consumer. With everything you need at your fingertips, grocery shopping just got a whole lot simpler. Just check your phone for deals and have the checkout person scan the barcode in the app when you pay. No planning required.
3. Linked to PC Financial Cards
Quality food isn’t the only thing people go to Loblaw’s for. President’s Choice offers a very popular banking service that is known for having low fees. For those customers who are looking to take their PC Plus experience to the next level, there is an option to sign up for either the PC debit or credit card and collect more points by using these cards to pay for groceries.
This is yet another example of Loblaw’s effectively improving their business while enhancing the customer experience. Since collecting points is all about redeeming them for discounted groceries, PC’s low-fee banking service lines up well with their customers’ money-saving mentality. This perfectly coincides with the company benefitting from higher customer engagement, giving both parties what they want and need from each card.
PC Plus’ Missing Ingredients
No matter how prepared you are, sometimes you forget to pick up an ingredient. While PC Plus has many outstanding benefits, there are still a couple of things missing.
1. Pre-Loaded Offers
This is one of the most baffling elements of the PC Plus program, and frankly, I can’t see it lasting much longer. As it stands, the customer must remember to “load” their offers each week in order to add them permanently to their account in order to cash in on them later. That means you could shop at their store, spend lots of money on products that had high points offerings, but ultimately lose out if you forgot to load your offers for the week.
This breaks all the rules for a successful loyalty program. First off, loyalty programs should be as straightforward as possible. Customers don’t have the time or desire to figure out the details of a complicated loyalty program. They will only put in so much effort before simply giving up.
Second, customer rewards programs are about creating delightful experiences for the customer. Realizing that you’ve lost out on points because you didn’t “load” offers is a supremely annoying experience, resulting in the opposite of the intended effect.
2. Post-Dated Points
Here again we see PC Plus penalizing customers when the goal should be to delight. It’s not uncommon that a customer might intend to swipe their rewards card (or scan the barcode on their phone) then forget to at the store and remember later on the way home. Unfortunately, the program currently doesn’t allow customers to have the points added in order to rectify this oversight. Instead, you’re straight out of luck.
The fact that PC Plus gives their customers access to their transaction history makes this program hiccup surprising. Why not let them collect the points after the purchase? With the high level of purchase data being collected, the capability to add those points after the transaction should definitely be possible. Even if they gave the customer a limited window to go online, or open the app, and collect those points they would be providing a tremendously better customer experience. This sort of approach would remind the customer that PC cares more about them having a good shopping experience than about keeping strict program rules.
3. Points for Every Purchase
As we discussed earlier, when you make a purchase in a Loblaw’s or partnered store with a PC debit or credit card you get points for every dollar spent. This is fantastic, right?
Sadly, this is not the case for customers who pay with other cards or with cash. That means that if you aren’t willing to switch to their banking service, you only get points when you purchase items included in your personalized weekly offers. That means that on the customer’s receipt, or when they review their transaction history in the PC Plus app, they see “0 pts” for many of their visits. The resulting feeling is that they aren’t progressing in the program, and this demotivating feeling can prevent customers from wanting to engage in the future.
This, again, runs contrary to the intention of creating a good customer experience. It’s a small annoyance that reduces the affection a customer has for the brand. Sure, offering more points to PC Financial customers makes sense, but even a token 100 points per store visit (the equivalent of ten cents) would be better than that frustrating zero. Giving every customer the opportunity to earn with every purchase should be at the root of every great loyalty program.
PC’s Satisfying Takeaway
PC Plus has an extremely powerful tool in their customer loyalty arsenal. With the ability to record regular purchases and customize offers, they are able to delight customers by making it easy and satisfying to accumulate rewards points. But the PC Plus program has some annoying rules that take some of the fun out of the experience and in this way they are not optimizing their advantage. Forcing customers to remember to load offers decreases the convenience of the program, and being unable to earn points retroactively can make earning points seem difficult.
In spite of theses issues, however, PC Plus is still an excellent example of how to use customer data to build a satisfying customer experience. By listening to their customers and incorporating their feedback, PC Plus is only a couple of tweaks away from offering a rewards experience that’s tasty, satisfying, and always at the top of the shopping list.
About the author: Clay Pearn is a writer and editor living in Hamilton, Ontario. He received his MFA in creative writing from the University of Michigan in 2015. Check out more of his writing at http://www.claypearn.com.