The theme for our March Leaders Summit was “How to Build Community Beyond Loyalty Points.”
The discussions began by looking at the set-up and launch of Nectar, still ubiquitous in the world of Loyalty cards, which was launched over 20 years ago, in 2002.
We also discussed how many schemes come in for criticism, and how many are loved. Some have really good, tangible, and high-value rewards, where on the surface you don’t have to do much to get them. With some others, however, it can feel it takes years to build up about often trivial amounts with customers confused about what they are getting, leaving some feeling the scheme is run for the company’s benefit, not theirs.
Examples of this particularly included hotel’s schemes, where you cannot redeem on the nights you want to stay, as so much is blacked out, with airlines often criticised for similar policies. We’re sure many of you reading this report will have your own examples too.
One thing very few would argue with, is that if you can build a community, you will build loyalty. It’s the holy grail for many businesses.
As a great example of this, one national high street retailer announced the very same week they were cutting the points per pound spent on their loyalty card by 25%. But they did at the same time announce increased discounts on their own brand products.
So, against that background, the discussion moved to what does loyalty really means in today’s world?
It was recognised this would be different for many sectors represented in the room, so discussion began with each looking at what loyalty looks like to their business in 2023, what has changed in last 12-24 months.
The current financial situation in the UK is affecting brand loyalty to its limits.
Customers are making extra checks on prices, and they have much higher expectations. They need and want authenticity and also transparency.
Companies are being forced to look at things more holistically and some companies are even putting a pause on loyalty. Loyalty can’t be seen as an initiative to fix brand problems – it needs to come together with other areas of the organisation.
Customers need exceptional service and a personal experience. This doesn’t come cheap.
There are opportunities. If you are a business which is able to adjust prices to get non-brand loyal customers onboard – do it and bring them into your great loyalty experience.
What we are seeing from many of our clients is there is a real shift of focus into more customer retention and lifetime value.
This article is posted at concentrix.com
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