The Importance of Rewarding and Leveraging Loyalty

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Pamela Bath

shutterstock_195702008v2_miniConsumers need to feel they’ve got the best deals, that they’re ‘savvy shoppers’, and most of all, that they’re recognised and valued as a customer. Boots are great at this; their Advantage Card scheme is the most generous on the high street, frequently offering their customers double or triple points on purchases.

There are several reasons why the Advantage Card scheme works so well; it’s easy to use, everything is contained on your card, it’s great value and you can see how many points you have. But more than that, Boots genuinely protect their customers and their relationship with the Advantage Card, whereas other brands will plunder the relationship for everything it’s worth and constantly try to sell you everything.

But loyalty schemes don’t have to follow the ‘points win prizes’ concept; Waitrose, for example, don’t offer a collectables programme, but they reward their customers with a free coffee and paper if they’re signed up to the My Waitrose scheme, while luxury online gift emporium The Handpicked Collection sent their customers chocolate at Christmas. These gestures are about the ‘surprise and delight’ element, which makes customers feel great about their shopping choices.

Brands must, however, be constantly aware of the barriers to the success of their schemes; if a scheme is too complicated to use or understand, doesn’t have any personal benefits to the consumer, neglects to acknowledge them as an individual, or takes too long to collect rewards, the scheme will fail. It takes real commitment over both the short and the long term to deliver something of value to both parties.

But it isn’t just loyalty schemes where brands are failing to leverage their customer’s attention. Look at airlines and travel companies; they have the greatest opportunity by far to drive loyalty. Their customers aren’t transient, they’re in the hands of their holiday company for days, weeks or even months. Whilst these companies might run a single customer satisfaction survey when their customers are on their way back from a holiday, they miss the opportunity to develop a relationship with their customers.

So what’s the solution? If your customers have given you their data, use it to communicate and build trust, rather than just perpetually selling to them; having big data serves no purpose at all unless you actually use it, no matter how sophisticated your data is.

When you offer a reward scheme, make it relevant to your audience. A great shopping experience is all about people feeling good about the decisions they’ve made and again that comes back to personalisation, and recognising that everyone is unique.

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