WEST SENECA, N.Y.—"If you were to ask merchants what their most important asset is, they are probably going to say their customers."
Graham Farrell, president of Lift & Shift Inc., said this is why loyalty and rewards programs can be so important to a retailer or anyone in business—especially the tire business.
He said the reality is "the tire industry is a very competitive industry. You have a lot of people selling the same product.... They are all pushing the same brands, so they've got to fight for a share."
Businesses try to win over customers with either better service than their competitors, Mr. Farrell said, or with better pricing—and that can get "a bit tricky because you start to erode margins too much."
He said this is the basic theory behind Lift & Shift—to "lift" to get more spending from existing customers and to "shift" consumers from other stores into yours.
"If you look at the retail tire industry today, you go into any tire retailer's website, they all have the same exact promotional features right now," Mr. Farrell told Tire Business.
He explained that offering different tire manufacturer rebates and Visa gift cards for a specific purchase are common trends on tire dealers' websites.
"That's not a loyalty program; that's a mail-in rebate," he explained. "And that's not loyalty because everybody's got the same thing."
Lift & Shift offers a different type of program. Instead of promoting a customer royalty program that offers points toward services or discounts in the store, the customer would instead get points toward reward currencies such as frequent flyer miles—like American, United, US Airways or Alaska Airways—or to other popular reward programs such as Holiday Inn's Priority Club, Best Buy Rewards and Gift Card Points, where customers accumulate points that can be redeemed for various retailer gift cards.
A good loyalty program will do two things, he said: increase the value of the average customer by getting them to spend more in the store, and bring in new customers.
"As a retailer, you want to hang on to that customer, and also, if you can, get them to come back more frequently," Mr. Farrell said.
He said some people ask him why they would want to give rewards to the customers they already have, and that way of thinking is the biggest mistake a retailer can make.
Everyone agrees that customers are important. So Mr. Farrell said he generally will ask a company how much business it lost last year. Most do not have a good idea.
"The average merchant loses 10 percent of their customers every year," he added, which is for a variety of reasons.
"Any time a merchant can introduce a program that will help make customers happy, make them feel appreciated, tell their friends about you, anything like that, it's a very, very, very important marketing tactic."
Mr. Farrell said that even loyal customers can be spending money at the competition.
Some clients have their own in-house loyalty program, but he said that might not be the best route for the tire industry because "it does very little to bring in a new customer."
When a company introduces popular currencies—such as the frequent flyer miles that Lift & Shift offers—the business will have "the added benefit of not just retaining your existing customers (but) the ability to lure the members of those big programs in to your store."
Mr. Farrell said this program can work for a tire dealer—or manufacturer or wholesaler—of any size because Lift & Shift is able to facilitate with pre-existing programs.
"It can be used by anybody quite effectively," he continued, "because whether you are big or small, one of the main reasons a company doesn't introduce a rewards program is because they fear the cost to create a program from scratch. And they also worry about how much time it'll take."
He said there is some hesitation to start from scratch because a smaller company would probably have to go to a vendor who could possibly say it's going to cost thousands of dollars. That can be intimidating, especially since it is a new program and no one is sure if it even will be successful. This can often lead to a company deciding not to follow through with any kind of royalty program.
"With our program, there's really nothing to build," Mr. Farrell said.
"All the programs we present are well-established programs. They have their own websites. The customers, you know, use these websites to use their points."
He said Lift & Shift equips merchants with the access to the currencies. All merchants need to do is send a file of information with the points earned from customers, along with the customer's name, email, phone and member number.
Mr. Farrell added that "there's no upfront cost" and a merchant pays only the miles or points they gift out. He said Lift & Shift typically charges five cents per mile or point.
Lift & Shift will walk companies through the process of getting started, including providing support and demonstrating how to run the program, along with promotion tips.
"We show them how to use the currencies to make money," he said. "The only cost that they have is tied to a sale."
According to Lift & Shift, 76 percent of members of these programs will switch merchants to earn miles/points, and the average customer also will spend about 40 percent more with a retailer that offers a loyalty program they collect vs. a retailer who does not.
Lift & Shift was conceptualized last fall and launched at the New England Tire & Service Association tradeshow in Connecticut in April.
The company will be making its first appearance at the Specialty Equipment Market Association (SEMA) Show Nov. 5-8 in Las Vegas and will be at Booth #32232.
More information about Lift & Shift is available on the company's website, www.lift-and-shift.com.
To reach this reporter: [email protected]; 330-865-6143.