“Loyalty schemes are,” says Robin Davies, “paid for through incremental …price increases” (MW November 15). He calls the concept “a failure” yet immediately contradicts himself when he goes on to say that the schemes deprive customers of their ability or will to change retailers, which I suggest – if it were true – would be a pretty good result.
Poor, confused Mr Davies. As a marketing executive you really should be familiar with loyalty concepts. Get your existing customers to spend more and buy more often and attract new customers. These should always be the primary objectives of a loyalty scheme – nothing to do with “unnoticeable price increases” or alternatives to “everyday low prices” – a concept Mr Davies seems to suggest he has invented.
It is intelligent use of the information derived from loyalty programmes that should typify loyalty marketing. Powerful customer profiles can be derived which can steer the strategy. One NCH client realised that eight per cent of its customers accounted for 50 per cent of sales, for example. Communications can be directed to a customer’s interests, rather than just demographic profiles.
Tesco is offering extra points on selected products. These are loyalty card-based promotions that drive customers around the store. Sainsbury’s has rolled out a TV-supported campaign offering 300 extra points on selected coffee purchases, again using the card as a driver.
A belated welcome to the world of database marketing, Mr Davies!
Manager – marketing and analysis
NCH Promotional Services