Jun 8, 2009

Loyalty cards score pointsBy Chuck SoderCrainsCleveland.com

The number of gift card purchases buzzing through the computer servers at SparkBase has decreased with the recession, but not by as much as loyalty card transactions have increased.

What at first might seem contradictory makes sense to Doug Hardman, CEO of SparkBase, a Cleveland company that processes gift and loyalty card transactions.

“People want to go where they’re being rewarded for things,” Mr. Hardman said.

Several Northeast Ohio retailers are responding to that trend by ramping up loyalty and rewards programs to grab and hold on to elusive customers looking for deals in a down economy.

Among them is InkStop of Warrensville Heights. The chain of office supply stores six months ago expanded its loyalty program to include deals on digital cameras, printers and computer accessories. Before, customers with an InkStop key fob could receive discounts only on ink and toner cartridges, in addition to a $5 rebate for every $100 spent.

The expansion of InkStop’s loyalty program was in direct response to the recession, said CEO Dirk Kettlewell. Customers are looking for deals, as evidenced by a sharp increase in sales within InkStop’s loyalty program over the past six months, while overall sales are up only slightly.

“The response has been excellent,” Mr. Kettlewell said.

Some retailers, such as Carter Lumber in Kent, are doing more to promote the programs they already have.

Driven in part by the recession, the chain of building materials stores lately has been telling its sales force to talk up the company’s Yard Rewards program, through which customers earn points toward paid vacations.

Carter Lumber has been promoting the program more through e-mail blasts and online videos, said David McCafferty, vice president of marketing.

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