Opinion: There’s a problem with loyalty programmes

By: Mark Eglington, Simply Thank You, home of the onecode 

“Customer retention is a huge concern for 61% of merchants, as we’ve just seen in the Retail Systems Research. In fact, it’s been predicted that retaining only 5% more of a company’s clients may boost profitability by over 50%. Loyalty matters.

Yet according to the Edgell Knowledge Network’s research, we might be getting loyalty all wrong.

Take a look at some of these stats.

  • 81% of loyalty members are unaware of the benefits of their programmes or how to obtain their rewards.
  • Being a member of their present loyalty scheme is seen as having little or no value by 32% of consumers.
  • Only 40% of respondents are satisfied with the prizes on offer.

This shows a huge disconnect between what brands think they are doing, and what consumers actually want!  With 81% of customers not knowing how to redeem a reward, that’s not a benefit – it’s a challenge!

 

With 81% of customers not knowing how to redeem a reward, that’s not a benefit – it’s a challenge!

Loyalty programmes typically feature the following methods: 

1. Amount of points

This is where  purchases are rewarded with points. The consumer then exchanges those points for prizes. They aren’t the most fascinating or innovative, but they are simple to implement and build around.

2. A multi-tiered system

Tiered loyalty refers to when specific features, awards, or access are only available to customers who spend a certain amount. These programmes are commonly used by brands with loyal consumers and focus around exclusivity.

3. Money-back guarantee

Similar to the points-mean-prizes schemes- except instead of receiving incentives, the consumer receives shop credit

4. Stamps / Purchase based rewards

The stamp card, or loyalty card, is recognisable to anybody who has a favourite coffee shop or sandwich restaurant.

There are many other alternatives, but the issue isn’t often in the method itself – but the presentation / delivery and the actual reward.

Marketers who are astute understand that keeping a satisfied customer is easier than finding a new one. But, in order to establish client loyalty, brands must deliver on their promise of sending the appropriate message at the right time through the right channels. Loyalty programmes must generate individualised encounters between the brand and the customer in order to have an impact. According to a Capgemini survey, 75% of respondents who classified as extremely devoted to a store anticipated that brand to provide a unique shopping experience. Is your loyalty programme doing that?

Choice matters

In loyalty programmes, choice has always been important. Consumers could select the sort of programme they wanted to join, as well as how they wanted to obtain programme information and redeem reward points. With the advent of smartphones, users should have more options for accessing their programmes than ever before. However, many businesses do not provide this level of customisation. Some loyalty programmes have halted in their development and have stopped progressing. Most loyalty programmes do not provide the variety and flexibility that consumers need from a modern reward programme.

That’s why with the onecode we are offering something different – a way for consumers to select from physical gifts, gift cards and digital gift cards, all from one code.

They can shop on mobile, web, tablet – anywhere and any time, and brands can have their own loyalty platforms set up to offer their choice of rewards.

It’s a better way of rewarding.

So my final advise is to focus on how you can tackle that 81% of people who you think are being recognised as loyal – and see if there’s a better way to engage them and see the benefits.”

 

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