Loyalty cards? Proliferation or Reward?
Whilst my other half, our 1 year old and I innocently watched our 3 year old, cruise around on a pink Disney princess airplane at our local town fair. I was unfortunate enough to have had my purse stolen! Whilst coo-ing, and snapping away on my phone, in a blink of an eye my purse was snatched, from my little girls pushchair. My first instinct was to rush home to stop my bank cards, call the police, all whilst pacifying my two little girls who were eager to play with the mountain of plastic treasure obtained from said fair.
It occurred to me, that the most inconvenient thing about loosing your wallet wasn’t the bank cards, or my wallet now in the bottom of a bin somewhere, but the cache of loyalty cards, with the impending rewards waiting to be spent. I didn’t realise how many I had until I started the unenviable task of cancelling and getting them reissued. It started me thinking. If I have a dozen, how many does the average person possess? And indeed if the average person holds 12 cards, how loyal are these cards? Who is in control of our loyalty? The retailer or card holder? It’s becoming a battle ground. I would therefore like to question, are these loyalty cards now more like bonus schemes, no longer conducive to loyalty? But a savvy shopper tool, to make the most of rewards, benefits and offers. Jumping about whenever one offer is more appealing than the other? Or are they a tool for retailers to understand more about our shopping habits, in the quest to make us splash more cash? Pervasive marketing? Or an aid for retailers to understand their core consumer?
The high street through Nectar, ( the countries largest scheme with 16.8m members) and Boots advantage card were two of the first big players to reignite the loyalty phenomena. Started decades previously (1891) with the green shield institution which your Gran would have subscribed to. The global coffee shop community joined the party shortly after Boots and Nectar, with varying levels of payback for the caffeine crazed coffee lover. This loyal Costa loving consumer would have to spend £76.05 at Costa to obtain a “free” cup in return. I think they should be issuing you with shares in the company for this degree of payback. Nero’s offer a free cup after 10 cups. (Marginally better) And Starbucks, my brand of choice, I have been enjoying coffee there for 10 years, and happily flash my phone at the handset to pay for my fix. Starbucks have reported that 15% of their sales are generated via the app and that 12million customers use it.
But the question is even though the Starbucks transaction is quick, I get points, and it’s the closest to my office. Would I walk past a Nero, Costa or new Artisan coffee shop to get to a Starbucks? Hell yeah! I’m loyal to Starbucks!!!! There lies the premise. I am loyal to Starbucks because they do the best tasting Skinny, one shot, extra hot, wet, Latte; A true marketers coffee choice! (What does your coffee say about you? I feel another blog coming along!) They know my name, they greet me every morning on my way to work, write my name on my cup, and get me started for the day ahead. This is what makes me loyal. Now I know I should be joining the army of Star-buccaneer’s, to boycott my temple of coffee, due to their shameful tax avoidance tactics but I just can’t help it, I’m loyal. Customer retention is therefore an amalgamation of great service, great coffee, comfortable ambience, and a simple transaction process. Coupled with a heavy sprinkling of points.
Another community charging ahead with loyalty schemes, Supermarkets. Now, I live in Supermarket Town, otherwise know as Hoddesdon. We have a population of 20,000 and we have an Aldi, Iceland, Asda, Tesco Express x 2, Sainsbury’s and a shinny new Morrison’s, which landed at the end of the high street last year. But I always find my way back to my supermarket home, Sainsbury’s, our families supermarket of choice. Is it Nectar that create’s the loyalty? Well, it helps, but it isn’t the driving force, I’m loyal because of the brand, the offering, the environment, the quality and freshness of the food and the fair and reasonable prices. Lets face it, if it was about points and prices then Tesco and Asda would win hands down? I must admit I am a curious defector from said loyal supermarket. I have my food delivered and every two weeks, dependant on the offer I will be hypnotised by the promise of £20 off your next internet shop ( yes I have my food delivered. All I will say is; I have two toddlers, say no more) or come back to us Charlotte, we will give you our first born in return for your weekly shop. But, like a homing pigeon I always come back to Sainsbury’s.
So if it’s not the cards that create loyalty why do I have them? Because we all like rewards, we all like getting something for nothing. However shoppers need to become aware of how the data on their cards is being used. After each shop our baskets are being analysed and manipulated to understand our shopping habits. Some find this intrusive or pervasive. But the positive effects are that through understanding your basket, frequency, location they can serve up individual consumer centred offers.
So are loyalty programs hitting saturation, and are they worth the plastic they’re printed on? I think their role has altered, they form a degree of loyalty, but it’s not the primary motivator in all industry’s. It is part of the consumer experience that has now become multifaceted. As the consumer demands more, they want, location, environment, assortment, price, service and a heavy dose of “points mean prizes”. The key is for retailers to maximise the opportunity to serve up the right offerings for our tastes. And to not step over the line of becoming too intrusive. I will continue to play loyalty card snap… after all it’s something for nothing.