Retailers need to convert latent loyalty

Loyalty and loyalty schemes – a perennial topic but one that has importance in an economic climate where high street competition for every consumer pound is fierce and we’re constantly told shoppers are more promiscuous than ever in the hunt for a good deal.

Branwell Johnson

There’s a new survey just out from Accenture that scrutinises loyalty programmes and says such schemes are failing to completely engender loyalty. Out of the 70% of those consumer polled who say they subscribe to a loyalty programme, only 52% cite it as a reason to stay loyal to the brand.

And yet we keep signing up to them – or at least I do. My wallet is already bulging with loyalty cards for a well-known high street chemist, two supermarkets and the local leisure centre. And I have just added another card for Holland & Barrett’s new scheme? Why? Although I like the products on offer I only visit the store once a week at most and signing up to a programme will neither add nor subtract to that number.

Even stranger, thanks to my particular job I am acutely aware of the value transaction when signing up to a loyalty programme. I know I am handing over data to be crunched and interrogated and my information will be put into several buckets to be made use of.

And yet I still do it because it’s quite an easy process to do so at the till and somehow I still think I’ll benefit. I’m still sold on the concept of “extra” or “free” stuff if I collect enough points.

So, initial indications are of blind loyalty from me but actually I have not even checked out the actual benefits or rewards of being a H&B cardholder because, well, I’m busy and life gets in the way. You could say I have “latent loyalty”.

It will take a lot of nudging to convert my initial sign up into increased spend or frequency of visit and that’s the challenge for H&B or anyone else running a loyalty scheme. They have to be able to use my data in an effective way that cuts through the host of loyalty tactics, ranging from personalised email messages and online voucher promotions to back of till receipt offers, with which I am besieged. They have to persuade me to put the brand top of mind and act on my latent loyalty.

It’s a tough job and Accenture reveals that more than three quarters of those polled in its survey said they get very frustrated when their information is not used well. The Holy Grail is to offer the right reward at the right time to those enrolled in a programme. Retailers that can achieve this should reap the benefits.

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