Loyalty schemes attract young shoppers

13 January 2012

LONDON: Brand owners in the UK should consider using loyalty programmes as a way to engage young consumers, results from a new study suggest.

Marketing Week, the trade title, partnered with Promise and Lightspeed, the research firms, to survey 1,000 adults, and found that 100% respondents had joined at least one loyalty scheme in the past.

Within the group, 30% had signed up to three of the initiatives, 13% belonged to four and 7% were members of five.

Younger participants more generally believed these programmes made them "feel closer" to brands, and 62% of 18–34 year olds wanted more loyalty schemes to be available. Just 37% of 55–64 year olds said the same.

Securing rewards and making savings were the main reasons to take part in loyalty initiatives, but 29% of the panel cited being "part of a community" and 24% liked helping the firm in question.

A further 22% of contributors mentioned receiving exclusive updates and information, and 16% thought showing their affiliations in this way "says something about me".

British Airways, the airline, has formed a tie-up with American Express to rolled out a joint credit card, which is linked to the Avios air miles programme, as it seeks to engage shoppers.

"Transparency and what points are really worth is going to be an increasing challenge. Consumers will want to know if earning two points on one scheme is better than earning one point on another, as that might not always be the case," Richard Harris, VP, acquisition, American Express, said.

Some behaviours vary by category, with the promise of special deals and events afforded a high importance by 45% of people when discussing mobile loyalty offerings, versus 34% overall.

Vodafone, the telecoms operator, has launched "Freebeez", providing rewards like free text messages, and a VIP programme giving early access to fashion events and music festivals, for pay-as-you-go customers.

"We're still figuring out in this industry what people want, whereas many other typical points schemes have been around a while," said Danielle Crook, UK brand director at Vodafone. "There is a lot to be learned from other industries."

Data sourced from Marketing Week; additional content by Warc staff