Customer loyalty schemes

Published on 20 November 2014 by in Latest News

Customer loyalty schemes have always been an effective way to improve retention levels. As the festive period approaches more and more businesses will be offering extra incentives to loyal and valued customers to prevent them from switching suppliers.

In a recent ICM study, research showed that 86 percent of adults are signed up to at least one loyalty programme and 40 percent of adults are signed up to three or more. In a competitive market where consumers easily switch between suppliers and brands, loyalty schemes can be an effective way to increase retention levels and improve customer satisfaction. The fact that consumers are satisfied with a brand experience doesn’t stop them from taking their business to a competitor that can offer them something extra.

boots 300x157 Customer loyalty schemesConsumer trust is a key component in many loyalty schemes failing to hit the mark, with recent research from WorldPay stating one in three believed loyalty programmes hadn’t saved them a penny. A loyalty scheme needs to offer customers something they will appreciate, as they like to feel that they are being rewarded for giving you their business. A Grass Roots Group survey of over 2,700 UK consumers found that 49 percent of 18-24 year olds cite offers and rewards as the most compelling reason to buy from a brand. Although over half of 18-24 year olds reported being targeted with irrelevant loyalty schemes from businesses.

Lots of brands offer points schemes, with the big hitters of the loyalty card world including Tesco Clubcard, Sainsburys Nectar points and the Boots Advantage card. They give points for in-store or online spending which can then be used to buy products or trade for rewards. Boots Advantage cardholders can shop via Boot’s Treat Street and earn points at a number of online retailers. Nectar eShops is a similar site which also has an app, where Nectar points can be collected for more than 500 brands online. Throughout the festive season, Tesco’s, Boots and Sainsbury’s offer increased point schemes to encourage higher value purchases, with Boots promoting rewards such as triple advantage card points if spending over a set value.

nectar 300x185 Customer loyalty schemesApple Pay are rumoured to be launching a loyalty scheme in time for Christmas alongside its Apple Pay technology. The loyalty system is expected to use Apple’s iBeacon technology to deliver targeted location-based content to iPhone users through a combination of Bluetooth and Wi-Fi. iBeacon will allow Apple to provide more data to users, which is used to initiate Apple Pay at supporting kiosks. Apple’s loyalty program would be tied to the Apple Pay system, providing exclusive offers or discounts to users in exchange for them using their iPhone to make a payment. One example rumoured, is that a user in store would receive a push notification via the store’s app, initiated through iBeacon, informing them that an item is available for buy one, get one free. The customer could then go to checkout with said items and earn the reward by using Apple Pay.

numero believe knowing what your customers want from a loyalty scheme and what will appeal to them is the key to success in such a loud market. Focusing on specific goals, for instance wanting your customers to spend more or looking for repeat business, is the key to creating targeted incentives that will increase customer satisfaction.

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