A piece of research from customer experience company Satmetrix revealed last week that fewer than 2% of consumers trust advertising as the best source of information when choosing a product or service and yet most brands still shell out a good deal of their marketing budget on ATL advertising.
A sizeable chunk of what Nectar’s own activity, along with its partners, is DM. The simple reason is that it’s the best way the loyalty programme can engage directly with its members.
While Nectar does invest in brand campaigns and is preparing to launch one later this year, it is its direct marketing that builds its relationship with cardholders, whether the purpose is to increase sales from existing cardholders, increase customer loyalty or reestablish relationships with lapsed customers.
Nectar has been criticised in the past for lagging behind the Tesco Clubcard in terms of customer data, but for the past two years Nectar’s insights business LMG has been bringing the programme up to speed with its competitor.
Now its vast database of customer information plays a vital role in supermarket partner Sainsbury’s decision-making and promotional activity.
The data also helps Nectar to target offers at cardholders through segmentation, and is increasingly informing Nectar’s trigger marketing activity.
Jan Pieter says trigger marketing is becoming more common as part of the loyalty programme’s direct marketing activity.
Trigger marketing is direct marketing, either by email or by post, that is directly triggered by the customer’s actions.
Depending on the exact set of circumstances of each cardholder, Nectar can engage with individuals, be they lapsed or inactive members, or encourage cardholders to become regular users, or introduce them to a new partner offer.
An example of the kind of trigger marketing Nectar Card undertakes could be if a cardholder moves house.
The cardholder informs Nectar that they have moved house so the scheme sends out a personalised offer either to incentivise them to continue shopping in Sainsbury’s, even though it may now be further away, or it tells them where the nearest Sainsbury’s is to the new address.
It might be that a customer uses their Nectar Card in a BP petrol forecourt for the first time. In this case, Nectar will send a personalised welcome offer to incentivise the customer to become a regular visitor to BP and so increase the frequency of interactions with both Nectar and its partner brand BP.
While I’ve steered clear of loyalty schemes in the past, based on the principle that I didn’t want a retail organisation knowing more about my shopping habits than I did. Leaving the meeting with Jan Pieter and Nectar’s marketing director James Frost, I found myself wondering why I was doing myself out of personalised offers and rewards. I went straight online and registered myself for a Nectar Card. Will I regret it? We’ll see.