State of the Industry

As we wish Bert Tansky, chief executive of Neiman Marcus, best of luck in his upcoming retirement, it’s a great opportunity to take a look at the retailer’s InCircle customer loyalty program --- what many call the gem of the industry.

So, why is this program so successful? Complete commitment from the C-Suite drives the success of any customer loyalty program --- and InCircle has benefitted from that commitment (and blessing) since its inception. Further, InCircle program is a universal program across all of Neiman Marcus brands and channels. It is understood, supported and embrace by all employees --- from assistant buyers to sales associates to the executive team.

Much of its success can also be attributed to the fact that InCircle is not as much about the award or the discount as it is about the experience and service. Loyalty is NOT about the discount or the reward in all cases. It is about the comprehensive understanding you can attain of (for) your customer. Service, support, and high touch still have their places, and we have this strategy rebound in the performance of several high-end companies. Not every brand can (or should) compete on price. The development of an effective loyalty program --- and the deep, rich behavioral insight you will glean from the program --- is tantamount to success.

Yes, it’s true that InCircle members can earn points on virtually every purchase made within a Neiman Marcus Group brand which allows members to accumulate points quickly. But, these customers are going to spend no matter what. They did have a slight down turn during the recession, but I would argue that Neiman Marcus knows more about its customers than most brands.

They push InCircle hard (in store) and the ability to get the customer engaged and active with the card can not be understated. Getting the rich insight (that other companies often do not have) gives Neiman Marcus the ability (since they have the commitment) to be very targeted in every facet of the program --- which makes the program work.

We always hear of relevance, timeliness and channel. Neiman Marcus’s data mining allows the retailer to communicate effectively in the form, factor, and with the right message at the right time to create an iterative dialogue that drives customer engagement. This is the secret sauce. I would assume that if you survey this customer group they would have high affinity for and to the brand, card, program and --- most importantly --- the individual who has helped them with their make up purchases for 10 years. This is huge commitment and the value is immeasurable.

Lastly, the added benefits of tiered rewards works to maintain customer’s interest in the program. Although the base InCircle membership has enough value to stand on its own, the program goes one step further by offering additional benefits to members reaching higher spending levels. The ability to add tiered rewards in this challenging economic time is key. The wealth factor has declined for some within this customer group, so brands need to use the data/insight to tailor the program in the short - (and long-) term to ensure success. Programs that remain static during tough economic times do not succeed. InCircle is a best-practice example of a loyalty program that is adaptive, responsive and is listening to its customers.