Loyalty schemes have been one of the huge marketing successes of British commerce in the last decade. In fact, a recent research study from 3radical has found that 93% of Brits have at some point signed up to be a member of a loyalty programme. Alongside this, where they find a scheme they like, three quarters of respondents (75%) reported being an active member for more than 12 months.
However, many schemes are not as actively used as brands would like. Despite almost a third of all UK consumers having five or more loyalty cards, almost two-thirds of those surveyed (61%) will stick to using only one or two of their favourite schemes on a regular basis.
Multi-brand programmes such as Avios seem to break the mould and have gained some respectable ownership figures. However, beyond this, schemes within sectors most would expect to position strongly – such as fashion, cinema and restaurants – often struggle to create a sustained interest in their loyalty programmes.
When the nationwide survey dug deeper to ask Brits what would encourage them to use the schemes more often, respondents were clear in their feedback: they want more personalised and interactive loyalty schemes that encompass more of their relationship with the brand – e.g. the brand must understand their customers better and know their likes and dislikes. Brands that fail to follow this rule will ultimately lose their custom.
Three quarters (76%) of respondents said that loyalty programmes would be more attractive to them if they provided individuals with more relevant rewards based on their purchase history. Over half (59%) said that including the ability for them to earn rewards for activities leading up to a purchase, such as researching the brands products, and providing more information to help the brand be more relevant, would make the scheme more attractive.
David Eldridge, CEO at 3radical, commented: “Organisations nowadays are struggling to capture and bottle loyalty and retaining customers is consistently cited as a number one challenge for today’s marketers. The brutal truth is that consumer behaviour has changed. Today it’s quite easy for a customer to ignore brand messaging, and once they no longer care what you have to say, re-engaging them with marketing can be nigh on impossible.
He continued: “Loyalty schemes work extremely well in principal. However, they must they evolve to become a richer, more individual customer experience across the entire customer journey if they are to continue attracting and retaining the attention of their customers. The most successful programmes are those that help to develop more of an emotional connection with the brand rather than a transactional one, by creating interesting ways to interact across the customer journey and therefore offering plenty of ways to re-engage with them multiple times.”
Emily Collins, Senior Analyst at Forrester, wrote: “Traditional approaches to loyalty don’t cut it anymore… It should be treated as one of several tools — alongside customer experience, brand and customer service — that helps foster customer loyalty wherever customers interact. Truly great loyalty strategies create a meaningful exchange of value between the company and the customer. This exchange encourages customers to share all kinds of profile, preference and behavioral data.”
“The insights gleaned from loyalty data — encompassing transactions, preferences and profiles, help identify the “right” kind of new customer to attract and the types of marketing initiatives that retain existing customers.”