Warc Blog

Loyalty schemes fall short

15 April 2013
NEW YORK: Almost-three quarters of US consumers are enrolled in one or more loyalty schemes, but most of these programmes are never used, a new report has argued.

As part of its Consumer and Shopper Insights series, McKinsey, the consultancy, found that the average household was signed up to 18.3 loyalty programmes but active in less than half, despite the fact they collected "points" worth an average of $622 per year.

Even when these schemes are used, just one third of customers felt that the programmes were addressing their needs, the report stated. Less than one fifth said they influenced purchasing decisions.

The most widely owned cards were for financial services, airlines and specialty retail, this last being the fastest-growing sector.

Marketers need to develop a clear sense of purpose for their loyalty initatives, stated McKinsey, noting that the ineffective ones lacked this "basic discipline".

The consultancy then outlined six ways that marketers can keep these efforts "engaging and relevant".

These include the use of data to personalise customer offers, keeping offers fresh, creating a multi-channel experience, developing partnerships, analysing which offers are really working and giving enhanced offerings to the best customers.

Warc has published a number of case studies on how brands revitalised a loyalty programme, such as an American Express campaign in Argentina that successfully ran time-limited offers encouraging people 'hoarding' points to redeem them.

Loyalty schemes are an important tool in connecting with customers, McKinsey stated. "Yet like all marketing efforts, they require a good deal of creativity and innovation to make sure they stay relevant and in sync with consumers and the market."

Data sourced from McKinsey; additional content by Warc staff

 
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