A loyalty programme is more than a piece of plastic

Written by on April 10, 2015 in Opinion with 0 Comments

Disconts cards and giftcards isolated on white backgroundThe number of loyalty programmes is expanding at an alarming pace. According to a survey by Bond Loyalty in the US, they have grown from an impressive 10 programmes per person in 2014 to 13 per person now. Unfortunately, the number of programmes that customers are actively engaging in is going the other way. The problem is, according to Scott Robinson, senior director of loyalty consulting and solutions for Bond Brand Loyalty, “while points and discounts drive behaviors, companies need to engage with consumers at a deeper level if they want to extend program loyalty into genuine brand loyalty.”

Almost half of consumers now want to engage via their mobile device but the reality is that brands are not getting this piece right. Not surprisingly, the top rated loyalty programme is that offered by Amazon Prime – purveyor of Dash, the truly one click ordering mechanism.

It seems that too many companies think they should offer a loyalty programme and, by default, produce a card which is good for nebulous discounts and special offers. There seems to be a lack of flair amongst companies when it comes to loyalty, and yet loyalty is the goal of every company. There are also data concerns with loyalty cards, and Aimia, the company behind the Nectar card in the UK has found that 20 percent of shoppers have closed accounts because of privacy concerns and the belief that they will be bombarded with irrelevant offers.

The BBC recently discovered that loyalty cards can have unintended consequences. Waitrose, the UK chain owned by John Lewis, offers a loyalty card which offers either a newspaper or a cup of coffee if customers produce a card. Many customers do not have time for a coffee when it comes to shopping and will either have bought a newspaper elsewhere or digest their news online. Some customers go as far as claiming a coffee on their card, wander round the store and leave having bought nothing.

The conclusion must be that loyalty schemes need to mature and need to better cater to customers’ wishes, and not focus on the data that cards clearly produce, however clever the analytics technology behind them.

Loyalty programmes are not new of course. Green shield stamps, which customers would collect depending on how much they spent would allow you save for a specific item, such a food mixer. And they were in the 1950s.

Perhaps it is time, particularly as we move towards getting services right to the handset and allow customers to manage their services though self-service techniques, to go back to the drawing board when it comes to loyalty.

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About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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