A loyalty programme is an important part of your customer management system. It shows your customers you appreciate and acknowledge their allegiance to your brand, while also enhancing their shopping experience.
Yet we’re often left wondering - do they work?
Some interesting insights were revealed in research by Valentyna Melnyk, Professor of Marketing and Consumer Research at Massey University and colleague Tammo Bijmolt comprising almost 10,000 consumers across 24 loyalty programmes in eight different industries.
- some of the most common features of loyalty programmes such as discounts and saving points, while enjoyed by customers, do not have an effect on long term loyalty to a brand.
- loyalty programmes are more likely to build loyalty when retailers offer non-monetary discrimination between members and non-members. This is the case when a new loyalty programme is introduced or when an existing programme is modified.
- just 10% of loyalty programmes created sustainable loyalty, that is loyalty which does not decline after the termination of a programme.
As part of Massey University’s Big Issues in Business series, Valentyna explains what businesses can do to run a successful loyalty programme.
Valentyna’s key points for success are:
- use data from your customer loyalty programme to get to know your customers better. The success of a loyalty programme is largely contingent on using the data it provides, yet a lot of companies still neglect to use.
- give extra-special privileges to customers who belong to your loyalty programme, such as selected services and in-store member-only events.
- customers LOVE surprises, so use psychology and technology to treat your customers. One idea from the US and Europe is an app that greets customers with a personalised text message as they enter a store and offering them a discount or saving tailored to their needs and interests.
’Please use the data – it will make your loyalty programme so much more successful.’