Why English Gardens Charges For Its Customer Loyalty Program
While most garden centers have adapted the grocery-store model of loyalty cards (free membership, special prices and accumulated points), English Gardens in the Detroit area has found its paid-membership model continues to work for them. We spoke with English Gardens’ president, John Darin, about his Garden Club.
Greenhouse Grower RETAILING: What are advantages of having your Garden Club over the grocery-store model of a loyalty card system?
John Darin: When we started Garden Club in the mid 1990s, we didn’t have the POS system to gather the data or track customer’s purchases. So we put this program in place: 10 percent off most regular priced purchases; special sale days for Garden Club members only, including our advance Christmas sale; and great advice on how to grow just about anything from our hotline: 1.800.335.GROW
In the last several years, we’ve added other benefits
- 2- year warranty on trees, shrubs and evergreens (we usually offer a 1-year warranty)
- New for 2013: 1-year warranty on perennials and rose bushes (we usually offer a warranty until Oct 31 of the year of purchase).
- Subscription to English Gardens Inspirations magazine
We looked at the revenue we generated from the membership fee and didn’t want to give that up when we moved to a POS system. We did learn with our new POS that purchases from Garden Club members had a higher gross margin than our average customer. It’s totally contrary to conventional wisdom, considering we are offering the 10 percent discount on most everything that’s purchased. We believe that our most frequent customers purchase the membership card, and they are probably not just waiting for sales to purchase products. Upscale customers don’t shop sales or clip coupons, but they can get a good deal everyday with Garden Club.
Greenhouse Grower RETAILING: How do you recruit for your Garden Club?
John Darin: We take several steps:
- We have signage throughout the store, promoting the Club and its benefits. On products that have a season-long regular price, we will include the Garden Club price on the sign. This works particularly well for trees and shrubs, as well as our life-like Christmas trees.
- At the registers, at the end of the sale, there is a message that cashier can see that shows how much the customer would save if they joined Garden Club. If that savings is $10 or more on that transaction, it’s a fairly easy sell. Plus, with nursery stock purchases, the two-year warranty is a big benefit.
- We also promote Garden Club in our advertising, particularly when we are promoting trees, shrubs and life-like trees.
- Garden Club is not valid on patio, grills, custom work, delivery, labor or gift cards.
- Twice a year we offer a half off Garden Club coupon. The coupon appears for the month of March in our wall calendar (50,000 are distributed in November and December); and we include a coupon in our first ad of the spring season in early April. We also donate free Garden Club memberships to non-profit and charitable organizations, instead of gift cards or store merchandise.
Greenhouse Grower RETAILING: How did you arrive at the $20 fee? I’m looking for both the strategy of the price level (why is it not higher or lower) as well as why you decided to charge.
John Darin: It felt right. A customer would need to spend about $200 each year to break even.
Greenhouse Grower RETAILING: How has the program changed since you first launched it? And when did you launch it?
John Darin: It’s changed in a few ways since we launched it in 1997:
- We’ve added more benefits (see above)
- When we installed our new POS system in late 2004, we modified the program for new members who joined, restricting the 10 percent discount to non-sale items. We have grandfathered those members into our new program and still give them a 10 percent discount on regular and sale priced merchandise. They can continue to renew every year for $20 and receive that discount. Those “grandfathered” members make up about 8 to 10 percent of our membership.
- We also have several sale events throughout the year and Garden Club members save more during those events.
- In April, during our Garden Party Weekend, Garden Club members receive 20 percent off
- During our Christmas Open House on the first Sunday of November, Garden Club members save 20 percent off instead of 10 percent.
- During our three-day Sunrise to Sunset Sale, where nearly everything in the store is on sale, Garden Club members get 10 percent off sale prices as well.