‘Loyalty is about customers not data’

Loyalty schemes have lost sight of customers and “migrated into a world of jargon and clichés”, according to the European chairman of Nectar owner Aimia, Richard Baker.

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Speaking at the Loyalty World event in London, Baker said it was a “dangerous thought” for a business to set up a loyalty programme for the purpose of gathering data. He added: “It is not about the data. It is about serving customers.”

The former CEO of Boots and COO of Asda said that the business rewards of getting these schemes right and the dangers of getting them wrong have never been greater, as customer loyalty becomes more important to businesses. The economy can no longer rely on past drivers of growth, such as consumer spending, immigration or a financial services boom, he added.

There is currently “enormous waste in the marketing system” as businesses spend excessively on attracting new customers rather than taking care of existing ones, Baker argued, suggesting instead that the UK has the potential to become a “nation of customer experts” and a “net exporter of the technology of satisfying customers”.

Aimia has also launched new research suggesting that 74% of 19 – to 29-year-olds in the UK are likely to choose a brand with a loyalty programme over a brand without one. British consumers of this age are more concerned about privacy than US or Canadian counterparts, the study found, although 58% are also willing to promote products or brands through social media in exchange for rewards.

Canadian-owned Aimia reported record third-quarter results last week, making £15m in net earnings, with revenues up 8.6% year-on-year to £309m. Aimia’s performances in Canada and EMEA were credited with the boost. In the UK, there was a 17% increase in Nectar points and a 7.2% increase in redemption compared with the same period last year.

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