Loyalty schemes may now be able to slice and dice their members into ever finer segments and use increasingly sophisticated data techniques, but one fact has not changed since the Green Shield Stamps days – points for cash are still king.
This year’s Imperatives for Customer Loyalty study finds three-quarters (77%) of British consumers are members of one or more loyalty schemes. Among these members, seven-in-ten (69%) are satisfied with their schemes and only one-in-twenty are dissatisfied.
When asked in more detail about why they were satisfied, members of loyalty schemes in comment that ‘points’ (and, more specifically, being able to use points in lieu of cash) were the main reason for satisfaction (35%), with ‘discounts’ (25%) and ‘rewards’ (24%) following some way behind that.
Supermarkets enjoy the highest loyalty scheme take up of all sectors in the study:
68% of British consumers are members of any supermarket loyalty schemes compared to 28% for petrol stations – the nearest rival.
On average consumers in Great Britain are members of two supermarket schemes.
Women are more likely to be a member of any supermarket scheme than men (75% vs 62% respectively).
More consumers aged 35+ have scheme membership (77%) than their younger counterparts (55%).
However, supermarkets also illustrate an interesting point in loyalty scheme behaviour. Some 68% of British consumers said they are members of supermarket loyalty schemes, yet only 47% are members and feel loyal to their supermarket.
This means that 21% of consumers are members of supermarket loyalty schemes for reasons other than emotional attachment. Perhaps this is where the pull of points, discounts and rewards incentivises consumers to belong to schemes (and repeat shop at supermarkets) for purely transactional/financial benefit.
Antony Jones, chief executive of customer interactions specialist Logic Group, said: “Transactional loyalty is evident in consumers that join loyalty schemes for discounts, rewards, vouchers and money off, but don’t have a real affinity to the brand.
It’s a case of getting something for nothing – which the supermarkets in particular excel at – especially against a backdrop of uncertainty over personal finances and spending power. However, given the apparent lack of emotional attachment within the sector, supermarket loyalty schemes must find a way to foster attachment to their brand as well as driving repeat business.”
When consumers were asked about specific ways in which they could interact with, and benefit from, loyalty schemes, the research showed that:
Consumers want better offers and services for their loyalty: scheme members want special treatment in exchange for their loyalty. Seven-in-ten (71%) say they prefer loyalty schemes where they can earn better offers or services for being more loyal. This is echoed by their desire to receive better customer service than normal shoppers (48%).
Beware of anything too tailored: Two-in-five (38%) say that they prefer general offers to more individually tailored ones; only 21% said they prefer tailored offers.
Consumers need to believe that the data held about them will be safe: in focus groups, while a few consumers had reservations about ‘big brother’ watching, none cited data security as a reason not to have a loyalty card. Overall, just under half of British consumers (48%) trust loyalty schemes to keep their personal information safe, and only 14% do not trust them.
Ipsos MORI assistant chief executive Simon Atkinson said: “From the research we can see that loyalty schemes are, on the whole, seen to be delivering satisfaction to members; particularly those schemes offering points and discounts.
“The findings do, however, highlight a fine line between providing relevant rewards and over-tailoring the offer. Consumers want to benefit from better service, over and above that received by their non-member counterparts – this can be achieved by improvements in simplicity, immediacy and accessibility of offers and information.”
