The Problem with customer loyalty featured

Infographic: The Problem With Customer Loyalty

In Featured on App, Loyalty & CRM by Vaughn Highfield5 Comments

The Problem with customer loyalty featured

Customer loyalty is dying out and nobody is addressing the problem

We’ve spoken a lot about customer loyalty of late, how loyalty schemes need to be changed, and how gamification can be a great tool for engagement. But one thing I’ve not really addressed is how poor loyalty cards actually are from a customer’s perspective.

For retailers they’re excellent. High volumes of incredibly valuable data for little to no sacrifice in cost. It used to be blissfully simple to get away with too. So many customers loved the idea of getting points they can save up for and get money off their shopping.

However, a new generation of shoppers has arisen. A generation that’s far more clued up on how businesses work and how technology impacts their life. Because of this, many don’t see the point in owning a loyalty card because, quite honestly, the return is crap. Why spend hundreds just to save £5 or so on a shop? In most cases, they’ll probably never even use that £5 off because it comes as a paper coupon in the post or needs to be printed off to be used. It’s unintuitive and cumbersome, and largely useless.

Still, there are schemes out there that do have tangible benefits. MyWaitrose and MyJohn Lewis schemes seek to reward customers instantly with something they could want right away, or with something that may entice them into the store for a short while (i.e. free coffee and cake). GAME has a great system that keeps customers involved by presenting them with badges that also give points that translate directly into money off in store within seconds; there isn’t even a card that needs to be used as it runs entirely on a mobile app. An app that can share achievements with others and rank you against your friends. It’s a glimpse of how loyalty schemes could work in the future.

In this infographic Total Customer presents you with the facts about customer engagement levels with loyalty schemes (clue: it’s declining), provides a look at what popular schemes offer in terms of points for money, and lays out a few other titbits around customer loyalty.

Customer Loyalty

Comments

  1. markjohnson

    Loyalty is not and should never be about the PROGRAM. Loyalty is a process, a journey, and those companies who do it well have a LOYAL audience. That loyalty is focused and predicated on behavior. I get the pleasure of speaking to 15+ senior level (VP to CMO) each week and those who do it well have a confidence and a commitment to their customer. Those who are focused or place a false hope that the program will be the savior to create loyalty are the one that fail. Brands want to see and hear from other brands. That is what Loyalty360 does, we help tell the story, understand, listen to and help solve the problems that exist around loyalty. The problem starts with the definition.

    1. Author
      Vaughn Highfield

      Indeed, Mark, you’re right. Loyalty shouldn’t be about the program at all. But, at a customer-level, that’s all they really see. They see the points breakdown and what they can get back in return. While we’re a b2b website, sometimes it helps to get thoughts out of the c-level and onto the street where customers see the benefits. I truly believe that the future of loyalty rests with customers. If they don’t like something, they won’t use it, and without approaching things in such a fashion will leave many loyalty systems behind. I feel that most of the time many brands seem to forget that there’s been a shift in power from the boardroom to the customer, looking to see what options work best for them. In the UK, Wal-Mart’s ASDA has no loyalty program in place, yet it has some incredibly loyal customers due to its price point and the way it appears to always be looking out for customers. Even Starbucks has a huge base of loyal customers purely down to the fact they offer a simple system that seems reasonably fair (although 15 cups of coffee for one free one is a little steep compared to some independent cafés that offer a free one after 7 cups). As I’m sure you know Mike, from writing on Loyalty360, like many things in the world of marketing, most loyalty offerings lack clarity due to an overuse of language and buzzwords to make things sound snazzy, when in reality they’re some of the most dated ideas around.

  2. Josh

    Interesting article but I’m afraid you’ve made a mistake with your £/point ratios. For Tesco for example you put £1=1 point whereas you mean £0.01 = 1 point otherwise your 500 points = £5 discount would actually be 500 points = £500 discount.

    1. Author
      Vaughn Highfield

      Hi Josh, I can see how you got confused with the conversions. However, with Tesco (for example) when you spend £1 you earn 1 point. When you have 500 points you get a £5 discount. It doesn’t mean that 1 point = £1, it’s not a mathematical equation, it’s simply a way representing that £1 gives you 1 point and that 500 points gives you £5 of discount.

  3. Corey Savage

    Loyalty isn’t always earned just by rewards. Customers are also looking for a good experience. If they have a good experience in your store or with your customer service team, that can keep people loyal as well.

Leave a Comment

Current ye@r *