How to create a successful loyalty scheme

 

The Tesco Clubcard has in recent years become a byword for a successful and thriving loyalty scheme. Its model has had such success that I have found myself in conversation with at least twenty non-retail businesses who have come to me with the express aim of ‘becoming the new Tesco’ or, at least, in mimicking its success. Nor is it solely a retail sector phenomenon; these companies range from international telcos to travel, media and financial services companies. They have two things in common: firstly, a need to drive insight from the data the business holds and secondly, a misunderstanding about just what is involved to achieve their goal.

 

The common misconception about a scheme like the Tesco Clubcard is that success will come purely from data, loyalty cards and technical infrastructure. What they usually fail to appreciate at this stage is that it also relies on accepting a different way of thinking and behaving – and, of course, that it is not a low cost endeavour to undertake.

 

Despite this, the high profile examples of companies setting up similar schemes continue to come thick and fast. In the last year alone we have seen reports of Amex and Barclaycard among others establishing capabilities to create loyalty programmes that rival Tesco’s – but what does this actually mean in terms of practical implementation?