NEW YORK upscale apparel retailer Bergdorf Goodman has begun its first rewards program.
The program is based on customer spending levels. Invitations to join were mailed in early January to all customers holding the store’s charge card. Some 120,000 pieces were sent, split evenly between Bergdorf Goodman cardholders and third-party cardholders. Just 10 percent of the mailing went to lapsed customers. “We wanted to speak to current customers,” says director of marketing Kathleen Manning.
The program is designed to maximize use of the store card; each third-party card a customer wants to use must be registered separately.
Award levels start at 5,000 reward dollars, accumulated on the basis of one for each dollar spent, if the purchase is not made on a Bergdorf Goodman card. Charges made on the card are credited at two-for-one, but participants must spend a minimum of $5,000 (in actual dollars) to be eligible for a reward. Award levels peak at a quarter-million reward dollars.
The retailer will issue quarterly account statements throughout the year, in conjunction with newsletters that feature a new fashion trend or new desire. But, says senior vice president of marketing Michael Calman, “the bottom line will be shop, shop, shop.”
While the business goals for the program include increasing customers’ share of wallet and stemming customer attrition, Manning anticipates building a more complete picture of the store’s customers in its database, especially on the household level.
“That’s probably the gem-family information,” she says. “I think throughout the year we will get a variety of information-customer expectations and feedback-that will give us better psychographic information.”
The program cuts through the clutter of loyalty programs in industries such as airlines and retail through its high-end, exclusive offerings. Several rewards are New York-oriented, such as a free Saturday night stay at the Plaza Hotel. Others offer convenience, such as “turnkey” trips to Venice. For customers who collect airline miles, the store offers American Airlines AAdvantage miles as reward choices at several levels.
The “year” for point accumulation runs from March to March. But while customers will have to claim a reward trip before that year ends, they will have up to 12 months to actually take the trip.
The store will also offer events intermittently to program participants. A launch party last month offered the chance to mingle with designers and earn gift certificates.
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