What drives you – loyalty schemes or new customer discounts?

What drives you - loyalty schemes or new customer discounts?

As marketers, we understand that one in the hand is worth two in the bush. But as an industry, we are guilty of focussing on acquisition more than retention.

Yes, there have been retailers who have bucked the trend, such as ASOS, Boots, Tesco & the collective NECTAR group, where points mean prizes – along with the pay-off of giving these companies every piece of information about you, from preferred toothpaste flavour, to shoe size. And many other brands provide the cursory annual birthday discount, as a way of saying thank you for your loyalty, without any personalisation or insight into behaviours.

But there are many unused loyalty cards weighing down our wallets and purses, which have been sold to us at counters up and down the country, signalling, first to know sales, promotions and exclusive benefits for members, aren’t always working the way they should.

Marketing Week* was given exclusive access to a report by consultancy firm Rare; there were two major questions affecting brands’ loyalty programmes today; likeability and trust.

The research also shows that many of the high street’s loyalty schemes are under-performing across four key metrics including ease of use, purchase experience, delivery on promise and personalisation.

And many brands are failing to adjust to the needs of the consumer or are failing to invest in CRM systems to utilise the data available which would allow tailored benefits, whether loyal or lapsed.

Starbucks is pushing the envelope with its MyStarbucks Rewards, which has moved beyond discounts and instead is focussing on experience and convenience. And then there’s Amazon Prime, who’s subscription loyalty scheme is leading the way for new approaches.

As a consumer, I’ve experienced the frustrations of new customers only deals, and as a way of enjoying small victories, currently have 7 different email addresses via gmail and yahoo, just so I can enjoy free delivery from Ocado or introductory beauty sets.

But, there must be a happy medium, where brands understand what their customers want and need from them, to drive sales, whilst attracting new customers with shiny new deals.

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