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Why is Ace Hardware trying to buy my loyalty?

Jim Tincher Jim Tincher 04/15/2015

Settergren'sNo neighborhood is complete without the local hardware store. Ours is Settergren’s, an Ace Hardware that’s been in business for over a hundred years.

Like most of it’s compatriots, it’s the anti-Home Depot. You get a good selection at a decent price. But what really matters is the convenience and the really good advice from people with dirt under their fingernails who know what kind of nail to use and can recommend the best caulk for your situation. We stop by there not just to get tools, but to ask for advice on a job or to look for a contractor.

Settergren’s is a neighborhood institution. On a Saturday afternoon it’s crowed with people coming for paint, nails, mulch or a shovel. They’re active in the community and neighbors regularly talk about how much they love Settergren’s.

So it surprised me when they came out with a loyalty program. You earn points by spending money with them which comes back in the form of a card good for $5 in purchases.

Who thought THAT was a good idea?

Why Them?

I understand why hotels and big box retailers create loyalty programs. Marriott hotels look remarkably like Hiltons. I dare you – kidnap a friend, put them in a hotel chain and take down the signs. What are the odds they can recognize the owner? Zero.

So hotels need a “loyalty” program to buy your future stays. Giving away free hotel stays is actually a good way to change behavior. Customers aren’t really loyal to the brand, but they will go there to earn points for future stays.

This is clearly not the case for an Ace Hardware. I’m not going to drive to the next neighborhood hardware store to save $5. The only reason I’ll go there is if they offer better advice or different services. And $5 won’t impact that.

Somebody at Ace is confused about what loyalty is really all about. Your local hardware store doesn’t need a new loyalty program. They’ve had one in place for over a hundred years.

Their loyalty program is their staff who tells you what product you need when you accidentally put non-paintable brown caulk on all of your fence posts (don’t ask). Or who can give advice on what to do when you spill yellow paint all over your rust-colored shingles (Really don’t ask!).

Look, I’ll take the $5. But you’re better off using it to retain your staff. Because they’re the ones earning true loyalty.

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