There are more loyalty schemes than ever, but consumers aren’t actually feeling more loyal to these brands – so claims new research by Ipsos Mori and The Logic Group.
To me this highlights several factors. Firstly, the need for loyalty schemes to act as relevant, and reasonably frequent, point of contact and add value to the customer. I think the days of spending a lot to get very little back in the way of points and rewards should be over, and that loyalty schemes should be more about encouraging you to visit the store more often and making you feel valued as a customer.
For example, I have both a Boots Advantage card (more of this later) and a Tesco Clubcard, and every few months I get some very useful vouchers in the post from them – the other week Tesco sent me a series of £5 discount vouchers to use over a six week period, followed up by a letter from Boots including vouchers for bonus points on particular products. These are very useful, as it has me conjuring up reasons to go back to these stores and purchase things to take advantage of these little treats.
Such is the beauty and genius of loyalty schemes, not to mention the wealth of customer data that a retailer has at hand. Someone like Tesco surely must be able to pick up that my household consists of a man and a woman in their 20s, based on the kinds of things we buy, and that to me is pretty valuable knowledge in terms of being able to tailor loyalty offers.
The next factor to consider is one that’s been in the news this week – the importance of partnerships, as demonstrated by Boots opening up its Advantage scheme to 50 other brands, including Asos, eBay and Thomas Cook. As the study in our trends feature indicates that convenience (or lack of it) can reduce the effect of a loyalty scheme, partnering with online brands negates the problem of physical convenience.
And on first glance, you might think that Boots has nothing on the mammoth size of Nectar – there are hundreds of outlets where you can collect Nectar points. You would think then, that there is no way Boots’ scheme can compete with this. But as my colleague Rosie Baker points out in her recent column, Boots’ scheme is slightly more straightforward in that you can only spend your points in Boots. This might seem restrictive, but as someone has commented on Rosie’s column, Nectar can come across as confusing in terms of where you can spend your points.
Loyalty schemes have to be clear in what they offer, so perhaps a small selection of partnerships can be more rewarding than a giant web of retailers that can make things confusing for consumers. And surely this defeats the point of something that is meant to make the consumer relationship with the retailer stronger and more efficient.