You've set up a loyalty scheme and your customers like it, but how do you maintain its success in the long term? Aimia's Nectar scheme has been running for more than a decade and has more than 19 million collectors under the hood, I spoke with Jan-Pieter Lips, Regional President EMEA, Aimia to find out just how they made it so successful.
Jan-Pieter likes to think in threes. Three ways to better do this, three things to consider when doing that, etc. Far from a quirk, it's actually a tactic some business leaders use to aid strategic thinking – an essential attribute when you're a boss of a loyalty programme that has 19 million points collectors and is used by retail giants including Sainsbury's, BP and eBay.
Unsurprisingly, when he's asked about the challenges of creating a lasting customer loyalty his answer is about strategy. "I think it is really important, particularly if a company gets into a loyalty programme or initiative designed to generate loyalty, that it takes a slightly different philosophy and approach – you have to take a long term perspective. A lot of companies are quite short term in their outlook and nature."
And to do this, argues Jan-Pieter, there must be strong support for the scheme from the top down. Certainly his strategy has worked with Nectar, Â£2 billion has been given back to customers in rewards since it started. Jan-Pieter says innovation is the key to keeping the programme's momentum, "It is really important to keep any programme or initiative fresh."
However, he argues the real impact of any loyalty programme will come from creating offers and solutions that have real customer benefit. Far from being another piece of plastic in someone's wallet, he argues the fact that so many retailers use Nectar ensures its long term relevance.
"Data itself is nothing, turning data into insight is interesting, turning insight into action makes it relevant to the customer," said Jan-Pieter. "It is really about going all the way from data to customer benefit. That's a long learning curve."
So, his three tips for generating lasting loyalty are:
1. Give rewards:
"It really still works. Customers like getting points. It gives them a reason to go to one store versus another."
2. Make communication much more relevant:
"Don't send everyone the same offer and message. It makes promotions much more targeted and effective and the waste goes down."
3. Use data and your communications to create a better customer experience:
"Grocery companies use data to make sure they're putting the right products on the shelves. Customers go online and the list of products they regularly buy is there. It gives customers a reason not to want to switch."
However a specific loyalty scheme isn't a cure-all solution particularly when it comes to emotional loyalty. "If you want emotional loyalty, you need to look at fundamental customer needs and those haven't changed for a long time," he said. "We help big companies do things that were natural when they were a smaller company – when they might know the customer's name and know what they like. It would be a very personal relationship. We help companies get some of that back."
When asked who or what he's most loyal to, Jan-Pieter throws in a curveball, stating "I'm loyal to Fulham Football Club – it's always a better conversation starter than the more obvious things to be loyal to!" A clear example of gaining the much-touted emotional loyalty in action.
Alongside the old adage of knowing your customer, in an increasingly digital age Jan-Pieter believes there are new opportunities to engage customers. Customer data is much more easily available and this gives retailers an opportunity to engage with customers in different points of the purchase cycle – before purchasing, during purchase and after purchase.
In particular Jan-Pieter says social media is providing an opportunity to have more personal interaction with customers.
His three tips on using social media to generate loyalty are:
1. Create more interaction and personal interaction:
"In the best examples brands are communicating with customers in a tone and style that fits the channel, not necessarily that of the customer service department. You have to make sure you have the capacity to respond and react."
"Whether people go to the Nectar website, Facebook, it doesn't matter where they interact, be available where the customer wants to be."
3. Stay true to your brand and what customers would expect of you on social media:
Clearly, this thinking in threes works.
At this year's Europe's Customer Festival, Aimia's Jan-Pieter will be holding a keynote conference surrounding the thorny issue of âDo Customers Want Relationships with Brands?' It's something that everyone is concerned about, and Jan-Pieter will deliver a talk that should most definitely be listened to.
Download the brochure to find out more about what else Jan-Pieter will be up to and who else you can see at this year's Customer Festival.
You can also get a great run down of this and other interviews and case studies in Total Customer’s completely free Little Book of Loyalty.