There's nothing more valuable to a brand than a long-term customer. In an age where much marketing spend is laid down with the intention of stealing consumers away, a loyal customer is worth their weight in gold. Small wonder then that so many high-street brands use loyalty schemes to foster that relationship - a technique we're increasingly seeing in ecommerce as well.
This Drum Network voxpop asks our members - what is the real value of loyalty?
Jamie Peate, head of effectiveness (UK) & MWG global head of retail strategy McCann Manchester
Consumers are loyal to brands that demonstrate that they really understand what matters to them, and in doing so those brands earn a role in their lives and therefore their loyalty. They demonstrate this with the interactions and experiences they offer, whether on-line or in-store. This should set up a fantastic challenge to us marketing folk to develop work that is both creatively exciting and effectively potent.
Yet, how many loyalty schemes fall into the classic traps? Giving-away money, making them very expensive, rewarding those who would have purchased without the ‘benefit, endlessly re-targeting in a way that erodes loyalty or just being a re-hash of the old ‘Free/Save/Win’ mantra of sales promotion of yesteryear.
According to McCann Worldgroup’s Truth about Commerce study, 74% of UK shoppers think that stores care more about their data than they do about the personal experience they are delivering.
What if we thought about this a bit differently? How about looking at loyalty not as a ‘scheme’, or a card, or even as a department. How about looking at it as a philosophy that shoppers could be loyal to, so that all of the brands activity can then re-enforce loyalty to that philosophy and in-turn that brand.
With that in mind, I’ve picked my top three loyalty schemes
North Face’s VIPeak - Creating loyalty by helping its customers ‘to help you never stop exploring’
When it comes time to redeem rewards in The North Face VIPeak loyalty program, customers can use Peak Points towards unique travel experiences, such as a mountain climbing adventure in Nepal.
Beyond the loyalty program, the brand creates allegiance at every touchpoint by hosting killer events like its Mountain Festival and championing under-represented communities such as female climbers.
In addition to its standard outdoor gear, at the Retail Lab locations you can expect live musical performances, special events and many other perks. The North Face Renewed range offers a special collection of refurbished clothing aimed at extending the life of its products while also making them more affordable.
Aldi - Creating loyalty by making ‘access to high quality food a right for everyone’
Rather than running complicated loyalty schemes and promotions Aldi whose business model is designed to allow them to sell the best quality at the cheapest prices, democratising access to quality to the widest group of shoppers possible.
Amazon Prime – creating loyalty by ‘making their customer experience event better’
Subscription to Amazon Prime gives you free delivery, same day delivery options and access to free video and music content. In the rapidly expanding and increasingly competitive world of e-comms it re-enforces Amazon’s commitment to its customer service and creates more reasons to consider them first.
Lucy Hawkes, e-commerce director, OMG Transact
I answer this question through the lens of the recent pandemic, in a time where consumers were unable to leave their homes and daily life was severely impacted. For me, the loyalty scheme that really stood out was offered by Pasta Evangelists. A small company that sells ready-made, restaurant quality pasta dishes online.
Pasta Evangelists’ loyalty scheme encourages consumers to ‘Subscribe & Save’ which results in a substantial discount on dishes; 15% off each meal and free delivery for subscribers. With a variety of options available each week this brought a sense of normality to the lives of many, although not ‘going out’ for a meal, this business successfully brought the outside world into the dining rooms of the nation through its DTC platform.
I subscribed to Pasta Evangelists back in February and continue to be a subscriber, here’s why:
- You can unsubscribe at any time
- There is no fee to be a subscriber
- There is complete flexibility and you can skip a delivery if needed
- You only pay when you order, there is no monthly fee
Generally, consumers look for flexibility and value in a loyalty scheme. That said, many are simple schemes that merely offer a card that you swipe upon purchase; in order to receive a sizeable or tangible return you must collect an infinite amount of points. And by doing so, many companies and brands are missing the premise behind loyalty schemes – their goal should be to entice and enchant customers, that will ultimately encourage re-purchasing behaviour.
With that in mind, I believe Pasta Evangelists provides an exemplary loyalty scheme, as they have found a way to target consumers with experiential media methods, ranging from eSampling to Surprise & Delight boxes, clearly holding its audience at the heart of the business.
To be successful in the e-commerce sphere, brands need to remove the barriers between themselves and consumers. They need to understand the consumer journey and target their audience with relevant and clear marketing. In the new world where businesses will be even more reliant on e-commerce, it is imperative to upskill loyalty schemes to bridge the void between the brand and the customer. Consumers are increasingly less likely to physically go to a store post-Covid, so companies need to work even harder to extend their reach and bring their brands to life.
The best way to achieve this is to develop dynamic and experiential media campaigns that reach and touch the consumer; pair that with a compelling loyalty scheme and you unlock success in enticing new customers and increasing re-purchase rates
Stoyan Petrov, managing consultant, a part of Capgemini Invent’s Inventive Shopping team
It is always difficult to strike the right balance between desirable loyalty benefits & rewards on one hand, and convenient redemption mechanisms and clear marketing on the other. A loyalty scheme that seems to have hit the sweet spot and managed to create a real community out of its member base is Beauty Insider by Sephora.
Although at its core Beauty Insider is still a points-based loyalty programme, Sephora has managed to put layers and layers of additional benefits on top of it. The spend-driven tiered system is based on a gradual unlock of a mix of rational and more emotional perks such as unlimited free deliveries, money off purchases through points, seasonal savings, exclusive access to experiences and products, free gifts, time-limited rewards and private shopping. It is rare to see such a comprehensive portfolio bundled into one loyalty programme. How can you make such a complex set of benefits and rewards work in the interest of both your customers, as well as your business?
While many companies launch loyalty schemes with the best intentions to deliver added value to their best customers, it is often a daunting task to clearly explain and market the intricacies of earning and redeeming the loyalty perks. Sephora has made it incredibly easy to earn points when purchasing their products, and from then on it is all about unlocking tier levels in order to gain access to an increasing range of benefits and rewards; which you can use based on your own needs and interests. It is this layered approach to discovering their loyalty programme which makes it so easy to grasp and use. The conditions to reach the next tier and what’s in it for you are clearly communicated, which sets a clear goal in sight and provides a quick mechanism to achieve it and start enjoying the benefits.
Through Beauty Insider, Sephora has managed to create a real community of like-minded people that can easily connect to one another, and the brand, to engage in conversations or gain inspiration – all facilitated by the comprehensive collection of Beauty Insider benefits and rewards. From a business perspective, this has created the perfect platform to gain a deep understanding of itsbest customers and use this knowledge to develop new products, services and perks to continuously update its portfolio and grow its community.