The reward from loyalty schemes
A new study shows that loyalty schemes with redeemable reward points are insufficient to keep customers loyal. Consumers now expect money-off vouchers and personalised offers. And many retailers are failing to use personal data they collect to benefit consumers, writes Andy Wood of GI Insight.
Loyalty schemes have become well entrenched as a must-have for most retailers and many other businesses. Even diehards that have long held off jumping on the loyalty scheme bandwagon have relented over the past couple of years and more recent converts among UK retailers have included John Lewis, Waitrose, Morrisons, Pets At Home and ASOS. But even as more firms in more sectors have picked up on the value of loyalty programmes, many are realising that they need more than just a vanilla scheme with a few rewards.
According to a research report commissioned by GI Insight last year, Loyalty Frequency: Who's Tuning In?, the vast majority of UK consumers (94%) belong to at least one loyalty programme, with many belonging to multiple schemes across varying sectors. The benchmark survey of more than 1,000 consumers – representative of the UK by gender, age, region and social class – confirmed that supermarkets remain by far the most popular loyalty scheme providers, with more than three-quarters of respondents acknowledging that they belonged to one of these programmes.