About 92% of UK adults now have at least one reward card; many of us have three or four. They’re seen by consumers as a great way to receive rewards from their favourite brands and retailers; and for brands and retailers themselves, it’s an effective way to collect a huge amount of consumer data that can influence decision making, not only for marketing departments, but right through the business.
The most popular loyalty card in the UK is the Nectar card, found in the purses and wallets of roughly 19 million people in the UK. Tesco’s Clubcard has 16 million holders.
There’s no doubt that loyalty cards are extremely popular in the UK, but do they work? And by this we mean do consumers benefit from savings (or do they at least feel as though they do)? Do they spend more? Are businesses benefiting?
Consumers and Loyalty Cards – The Facts
In order to understand how to build an effective loyalty scheme, it’s important to first understand how consumers use the scheme and what they would like to see from their favourite loyalty programmes. We’ve compiled the facts below:
- 92% of British consumers own a loyalty card
- 95% of over 75s own a loyalty card, compared to 83% of 16-24-year-olds
- When supermarket loyalty cards are excluded, 50% of consumers admit to never using the other loyalty cards they have signed up to
- 74% would be more likely to participate in loyalty schemes if rewards were personalised and tailored to them
- 49% would be more likely to participate in a scheme if it was cardless
- 80% of shoppers want to collect customer loyalty points on their phone
- 30% said they struggled to understand how loyalty schemes worked
- 66% said they wanted more than points and vouchers from loyalty schemes, such as exclusive products, services or access
(Sources: Financial Times, Cally, GI Insights, Ecrebo)
How to run an effective loyalty card scheme
Based on the above insights, retailers and brands can create a successful loyalty scheme that is actually used by consumers.
Firstly, don’t get caught up on a ‘loyalty card’ – there is no need to create a physical card. As the results show, consumers would prefer to be able to participate in loyalty schemes through their phones or via an app.
Secondly, ‘points’ aren’t necessarily what consumers are looking to gain from a scheme. Think about other exclusive deals, products, experiences and promotions consumers can unlock by being part of the loyalty scheme.
Thirdly, personalise your loyalty programme. Profile customers based on their spending habits and target consumers with specific offers that will tempt them into new ways of spending. Consumers are more comfortable sharing their data with businesses than ever before, but the willingness to share this information is based on the assumption that they will receive value in return – providing this value is key to running a successful programme.
At AlphaGraphics, we specialise in helping retail businesses deliver data-driven, automated marketing campaigns to improve lead generation. To find out more, visit: www.retail.alphagraphics.co.uk
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