Tuesday, 25 August 2009

Loyalty Cards

The discussion about the role and effectiveness of Loyalty Schemes has resurfaced in the last few weeks, what with Tesco's double up offer and the advertising by Nectar. The recent article in Marketing seems to talk about issues I wrote about in an article ..well, it must 10 years ago now on ''Relationship Marketing and Loyalty - What we actually mean.''.

Even then I talked about the fact these schemes are not the be all and end all of a Customer Relationship Strategy. There is no doubt that Tesco have used the data collected to really understand their customers in such a way that the opportunities to cross and up sell products and services are never ending. And does such insight make the customer any loyal? Well, if Tescos are able to promote relevant products then I am more likely to buy them. But that doesn't make me a loyal customer.

The latest Mintel report states that

Nearly three in ten adults state that cards have no influence on where they shop, they simply collect points on offer. Only 7% of adults aim to spend as much as they can in stores they have cards for, and only 2% stated that they would stop using a store if it stopped its loyalty scheme

The last comment would seem to suggest that its not the schemes that make them shop there.

The 'Loyalty' schemes need to be seen as part of the bigger Customer Strategy.

''It ain't what you do, it's the way that you do it. It ain't what you say, it's the way that you say it''

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