Data merits a mention as the key to retention

Countless retailers across the UK have spent huge amounts of time and money trying to understand and harness the concept of loyalty, with varying degrees of success, (Special report, MW August 4).

In order to be successful, loyalty programs must be developed with a true understanding of what drives and maintains loyalty.

Our own research has found that only 35 per cent of individuals think that the rewards offered for loyalty actually generate loyalty. For retail organisations, the biggest factor that generates loyalty is price – with 67 per cent of respondents choosing it as a key factor.

Despite many differences, the common thread linking the UK’s most successful loyalty schemes is that they are meticulous about data collection and analysis. On the other hand, many organisations continue to apply inaccurate data, wasting thousands of pounds of their marketing budgets and using up customer contact opportunities on ineffective campaigns.

The key to generating loyalty is for organisations to combine loyalty data with transactional analysis in order to really understand the different types of customer within their database. Only then can they provide products, services and marketing offers that are targeted specifically at each discrete segment.

As you point out, Tesco is ahead of the game with this understanding and will continue to take market share if other retailers don’t grasp that loyalty is a two-way relationship.

Jason Goodwin

Head of customer intelligence

SAS UK

Marlow, Bucks

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