Changes in customer behaviour means loyalty schemes often outdated
Loyalty schemes could be outdated because customers’ reasons for brand loyalty are not the same as those they base their purchases on, a survey has found.
86 per cent of customers base customer loyalty on the likeability of a brand, and 83 per cent on trust, according to a report by consultancy Rare, as reported by Marketing Week.
However, 81 per cent of customers said they purchased products based on price, 80 per cent on quality and 55 per cent on convenience.
These reasons mean that customer loyalty schemes are arguably outdated, as it is not highly considered when consumers choose where to spend.
Currently loyalty schemes are not up to standard, according to the 1,000 people polled.
Amazon and Starbucks were the only companies considered to have met and exceeded customer expectations, while loyalty schemes including those run by Waitrose, John Lewis and Nectar are all considered to be underperforming.
Increasingly, the use of personal data is becoming important in fulfilling some of the factors consumers consider to be most important in loyalty schemes.
Personalisation, for example is important to the public, at varying levels within generations.
54 per cent of teenagers – the most of any of the groups – said that they were loyal to brands with personalisation as part of its loyalty scheme, compared to only 40 per cent of baby boomers.
Ben Pask, the founder of Rare, told Marketing Week: “Explicit drivers, in terms of loyalty schemes, are not driving value for [brands] in the right way – they are not incentivising the right behaviour or enticing people to come back.
“Brands don’t necessarily focus much time on that because it is always exciting to create a new app to incentivise people through explicit drivers of loyalty.
“It’s great to have that ability but if trust is low and quality of service doesn’t ring true, you are wasting your time, effort and energy.
It’s about taking a step back and looking at the behaviour you want to incentivise.”