To understand the difference between ‘loyalty’ and a ‘loyalty scheme’, brands must clearly distinguish the gap between a consumer’s emotional loyalty, and their purchasing experience. If true loyalty is about a customer buying into a relationship over and above a transaction, then loyalty schemes are about purchase loyalty rather than brand loyalty.
Purchase Loyalty rather than brand loyalty
Marketing Managers may look at the number of ‘likes’ for their scheme on Facebook and think they’ve achieved brand loyalty, but in most cases, consumers will ‘unlike’ you when the deal or incentive is over, because they have never had an attachment to your brand.
But loyalty schemes do have a clear role to play, and that role is fundamentally about recognition and rewards. A busy young mum might save up her Tesco Clubcard points and take her kids to Legoland for the day; but as we’ve learned, that doesn’t mean she’s loyal to Tesco – she’s loyal to the Clubcard scheme, because it has delivered something of value to her personally – a reward – and this has created a pleasurable experience.
And that’s what a great loyalty scheme is about; recognition and reward. Consumers 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.
As well as rewarding custom, loyalty schemes also have a role to play with more ‘risk averse’ consumers who are inclined to stay with a par!cular brand because it’s safe and they’re not adventurous in their buying habits; in these cases, incentivisation and purchase offers could be a powerful way to break these habits.
“When you offer a reward scheme, make it relevant to your audience”
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 thank you girls of chocolate. These gestures are about the ‘surprise and delight’ element, which makes customers feel great about their shopping choices.
Whatever method brands use to create rewards, many are repeatedly failing to leverage their reward schemes in order to forge a real bond with their consumers; instead, they are defaulting to a ‘transactional loyalty’. Once they have the consumer’s attention, brands must think sufficiently far ahead to ascertain how they’re going to translate these short-term rewards into an overall experience; build a trusting and lasting relationship.
Brands must also 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 brand 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.
That’s why personalisation is so important. How many times have we experienced giving a company our information, only to be spammed with offers or products that are totally irrelevant? Marketing is still done in segments and trends rather than by individuals, and that seems a tremendous waste of personal information. What’s the purpose in collecting information about your customer if you’re not going to leverage it?
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. Brands could better increase their loyalty scheme take-up by actually asking consumers what would make them loyal, whether it’s a collectable points scheme, treats and experiences or discount vouchers.
Increasingly, brands are seeking specialist support from companies like Blueberry Wave who can act as anthropologists and actually interpret their consumer’s behaviours, needs and desires, enabling brands to think over and above the virtual parapet of in-aisle discounts and short-term points schemes, and ultimately forge a better relationship with the people who buy their products. Loyalty, in the true meaning of the word – loyalty to your partner, to your kids, to the people and places and things that mean the most to you – are deeply ingrained into your psyche, and it’s the same with brands; you pop into the supermarket and automatically put a box of Twinings Tea into your trolley without even thinking about it. Real loyalty is loyalty that’s working at an unconscious level; and when brands achieve that, they’ll have your custom for life.