Loyalty schemes need direction

Having read your Cover Story on loyalty (MW June 22), I would like to add the following points.

Loyalty may have had its day but the same can be said of most management principles, such as downsizing and outsourcing, and most enjoy a Phoenix-like return under a different name at some stage.

It’s probably not wise to write off the principle yet but it should be considered that loyalty is rarely practised to the letter. Its obvious commercial derivative rarely meets its business objectives, the consequences of which are the actions taken by the likes of Safeway.

Surely the question we should really be addressing is what loyalty schemes are meant to achieve. If loyalty is the desire to counteract promiscuity, shouldn’t we be asking what makes the customer promiscuous in the first place? And shouldn’t these be the areas that loyalty schemes address?

People are loyal for many reasons and a one or two per cent discount is not a huge incentive, although the cost to the corporation can be extremely high.

That money could, arguably, be better spent on other areas, such as improving the buying environment, raising staff service standards and training, and generating a better understanding of what customers want (which could be more practical than price led, such as parking or baby changing facilities). What companies need to appreciate is that what makes customers loyal is never just one aspect of the brand.

Matthew Hooper

Managing director


London W8

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