Loyalty schemes benefit brands more than us, say customersby
Although three out of five UK consumers use loyalty cards to get money off products and services, they also believe that such programmes benefit brands more than themselves.
A survey among 2,154 adults undertaken by Ipsos Mori on behalf of card processing and electronic fund transfer specialists the Logic Group likewise revealed that 48% of shoppers would be willing to spend more if rewards were more targeted to their requirements.
Antony Jones, the Logic Group’s chief executive, said: "As programmes become more sophisticated, businesses need to address consumer cynicism about the value they add and who benefits from them most, building on loyalty as a key part of the customer journey."
The current highly competitive business environment had led many brands to focus on quick wins through money-off offers and deals, he added. But the next big challenge was to communicate the benefits of loyalty programmes more effectively and use them as a means of demonstrating that they understood their customers in order to build a better emotional connection.
Simon Atkinson, assistant chief executive at Ipsos Mori, agreed. "The dynamics of what ‘true loyalty’ means for your sector remains a key challenge in this uncertain climate," he said. "We know that often people stay with a company out of convenience and necessity as opposed to any emotional connection."
Moreover, customers today were savvy enough to spot a ‘me-to’ loyalty scheme when they saw one, which presented a challenge for brands to "get smarter" with their relationships in order to meet their business goals, he added.
But the study entitled ‘State of Loyalty’ also indicated that loyalty card adoption remained low outside of retail, although it was on the rise. Some 56% of respondents said they were members of retail schemes compared with 10% in the entertainment and leisure sector, up from 4% last year. A further 9% held travel and hotel-related cards, while 7% used financial services-based initiatives, up from 4% in 2009.
Just over two out of five respondents were members of only one loyalty scheme, however, while only 14% were members of two, an increase of 8% on last year.