Should loyalty schemes be looking for new consumer triggers?

Loyalty schemes reasserted their importance last year as cash-strapped consumers looked to find added value and ways of supplementing their household budgets.

Branwell Johnson

The reward for retailers or other brands partnering such initiatives is an avalanche of data about their customers that can be used for better segmentation and targeting of both online and offline messages.

But while the precariousness of recovery means that canny shoppers are still keeping an eye out for discounts and bargains, there is a risk that consumers could eventually succumb to “loyalty scheme fatigue”, especially when the real upturn begins.

While one of the long-term consumer trends predicted to emerge from the recession is frugality, it’s also well known that the UK consumer is a restless soul driven by novelty and innovation.

That’s why new flagship stores, layout overhauls, pop up shops and new products excite and grab attention. What can loyalty schemes do to stay innovative and incentivise beyond offering money off coupons, two for one tickets to attractions, free DVD rental or discounts for big ticket items and hotels?

The AirMiles scheme in its original incarnation addressed this issue by offering an aspirational reward in the days when air travel was still relatively expensive and slightly glamorous, unlike the commoditised, tedious and exhaustive experience it can now be.

But what other triggers can be found to prompt consumers to join loyalty schemes and deliver some very useful data? Nectar seems to have come up with a good idea that taps into the traditional New Year wish to adopt a healthier lifestyle and the general feeling among swathes of the populace that they should be exercising, now driven beyond the traditional January guilt-trip by social change campaigns such as Change4Life.

Nectar has teamed up with Fitbug, a health and well being company that provides a pocket-sized device to hook up to PCs for online tabulation of exercise and diet. Users get points for walking and meal content.

It’s an interesting initiative that piggy-backs the growing trend for self-improvement and fitness, though I’m not sure one Nectar point, for instance, for making between 6,000 to 9,999 steps per day, is sufficient reward. I must find out how much effort that takes.

But levity aside, the challenge is on for loyalty schemes to come up with new ways to engage with consumer behaviour, attitudes and motivators. I look forward to exciting ideas once the recession is well and truly behind us.

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I write in response to your recent article “Why I’m regaining my faith in the loyalty programme” by Richard Madden (MW 10 December 2009).

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