To some degree or another, loyalty schemes have been around for generations, but loyalty cards as we know them really took off in the 1990s. Company after company introduced them as a way of encouraging us consumers to keep coming back to buy more – often, in fact, persuading us to try or buy things we didn’t really want.
Tesco Clubcard is one of the better known points-based loyalty card schemes. Supermarket competitor Asda, meanwhile, rejects loyalty cards as a "gimmick" and considers it more beneficial to concentrate its resources on offering lower prices and better value across the board to its consumers. So who is right?
Is it really loyalty when shoppers turn up week after week collecting points on their Tesco Clubcard? Is it sometimes maybe just that Tesco happens to be the closest supermarket, and that customers figure they might as well get as many "freebies" and discounts as possible whilst they’re there? Unless they feel that they are really benefiting from them, many customers will lose interest in their loyalty cards eventually.
Of course, loyalty cards don’t just give rewards to customers. They give valuable insight to the retailers on the buyer behaviour of their shoppers – who buys what, where, how often and in what quantities? But is a loyalty card the best way to understand what makes your customers tick and to get them coming back for more? Great price, great quality, great service…these are all valuable assets which a company can offer to encourage more customer loyalty. At the same time, ever more advanced CRM systems help to build customer relationships and promote loyalty. And, of course, market research offers, amongst other things, market segmentation techniques and customer satisfaction studies to better understand and meet the needs of your various clients.
More information on ways to improve customer loyalty can be found in our white papers:
