Stay loyal to loyalty
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).
Contrary to his suggestion that loyalty programmes require a “huge investment”, if structured properly from the outset, they should in fact be self-financing and, usually, can give a return on investment.
For example, we can predict the performance of programmes, typically yielding a sales uplift of between 4% and 5%. With a sale or return policy, we increase sales without sacrificing margins; all this while protecting a retailer’s brand image.
This brings me to my second point. Any loyalty programme needs to be sympathetic to the brand, mirroring the culture of the retail outlet, and be appropriate to its audience. It should not be a bolt-on, but be used strategically as part of a wider sales and marketing campaign.
The power of nationwide retail promotions should not be underestimated and should not be seen erroneously as a costly luxury. Which other way can retailers create positive reasons for shoppers to shop and repeat shop at their stores, attracting higher spend and new customers, while creating a point of difference that protects and promotes their brand?
It is not about “blind luck”. It is about knowing your market, understanding the issues and creating a proposition that works for consumers rather than assuming that price is the only consideration.
David Ringer, General manager, UK & Ireland, The Continuity Company
