The five ways to deploy a successful loyalty programme

We’re becoming smarter shoppers. Whether it’s because we want the best deal for a restricted budget, or because we’re more confident about what we want from the retail experience, our loyalty isn’t easily earned.

While our parents and grandparents generations often ‘stuck with’ brands and companies for decades, most of us see things differently now. Loyalty isn’t guaranteed for life. It’s constantly being built and shaped through our relationships the brands and those who represent them.

Any successful loyalty programme has to focus on these five factors.

1. Creating a customer centric experience

Loyalty programmes must be customer centric. That means using data to target the right offers to the right people, rather than offering the same generic rewards to all members of the programme.

People want to know that the brand cares about what they want. I’ve shopped with you for twenty years, why are you giving me a discount on beef when I’m a vegetarian?

Loyalty programmes are supposed to reward and encourage loyalty, not alienate people. Yet this is exactly what a poorly thought-out programme can do. Comarch’s Future of Retail survey found that almost half (45%) of UK consumers are interested in personal offers based on personal data. This rises to 62% among 18-24 year olds.

We love discounts and deals, but more importantly we want offers and experiences that are designed specifically for us.

2. Blending convenience and emotion

Petrol stations and supermarkets are driven by loyalty via convenience. The more you spend at some supermarkets, the more points you earn, the more money you save. It keeps you coming back for more.

But what about retailers that rely on purchases that are driven by emotion? Once you’ve gone out and bought the expensive car, is that it? How can the car manufacturer keep itself at the front of the customer’s mind when they only see them every few years?

These loyalty programmes need to make people feel like they are part of an exclusive club. A club they want to stay a member of, outside of the buying cycle.

3. Know that loyalty is complex

Loyalty isn’t a simple concept. You can feel loyal to a brand, but practical factors mean that you’ll shop elsewhere whenever the need dictates. You might adore the coffee shop that’s on the way to work, but if your office moves, would you go out of your way to get coffee from the same place?

Our own research (The Future of Retail) shows that if you sell household equipment, people want accurate, individualised promotions and offers. Electronics retailers should focus more on great service in-store. If you sell clothes or home furnishings, people want to touch and try the products, so your reward programme might focus on driving them into stores. The trick is to know what will trigger your customers into buying from you with their hearts and their heads.

4. Create engaging, sharable rewards

Create loyalty experiences that people want to share and engage with. Give them rewards that satisfy their need for instant gratification, and those that help them find long-term success.

Talking to people as individuals, rather than making assumptions based on what segment they’re in, is also important. You may have a lot of 30 year-old women that like your Facebook page, that doesn’t mean they’re all aspiring wives and mothers. Get to know your customers and incorporate this knowledge into the loyalty scheme.

5. Focus on the data

What benefit do customers get from allowing retailers to collect and use their data? If they aren’t getting offers tailored to their shopping habits, how do they benefit from this exchange?

How is feedback tracked? If a customer has a conversation with a representative on Twitter, do they need to repeat their problem to the in-store representative? Data lets retailers create an experience that fits each customer’s needs and wants but only the best loyalty programmes make full use of data analysis.

Our Future of Retail survey showed that consumers want something in return for the data. In the UK, 88% of respondents said it was important to be rewarded if they allow the company to use their personal data for marketing. Even more important is transparency, 92% of UK consumers want to know how a retailer will use their personal data.

Retailers that create successful, long-term loyalty programmes are those that consider all these factors, blending reward, engagement, personalisation and data.

This article is based on a white paper from Comarch on customer loyalty programmes, which is available to download.