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IpsosOur latest research for The Logic Group shows that, of those of us who are members of loyalty schemes, an impressive 69% are satisfied with them and only 5% dissatisfied.


What the research also finds is that the British consumer is a contrary creature who at once accepts the rewards that loyalty schemes bestow on them, while rejecting the mechanisms that make these rewards useful.


So the question remains: will consumers ever be happy with loyalty schemes?


The research shows that points, discounts, rewards, vouchers and freebies are the top five reasons for satisfaction with schemes – clearly scheme satisfaction is all about getting a bargain.  This is not, then, fuzzy warm consumer loyalty that we are witnessing, nor indeed are consumers even maintaining the pretence of such emotional ties – consumers  are members of schemes and repeat shop with their brands for one primary reason: to get money off.


But this is where consumers start to be contrary.  If getting money off is the reason for scheme satisfaction, it is also the reason for dissatisfaction: offers and rewards also top the “reasons to be dissatisfied” table.


So what is it that is right sometimes and wrong at other times? In a word, relevance.  What the good schemes have got right is that their offers are useful: consumers can readily use them, and they use them for purchases that resonate with their life-styles.  In more concrete terms consumers expect financial reward for purchases that they would normally be making – or rewards for ‘near enough’ to normal purchases.  And this is exactly where the less successful schemes fall down: offers are not relevant (cat food for a person with no cat); or rewards are perceived as too slow to gather (no reward at all if it never comes).


But here consumers get even more contrary.  In a world where consumers are open about their somewhat mercenary motives for joining loyalty schemes, they remain markedly reluctant to accept that organisations proffer loyalty schemes for equally mercenary reasons.    In other words, while consumers will happily criticise the scheme that gives vouchers for nappies to a childless singleton, they are not always so willing to embrace the fact that the same technology that ensures this does not happen also gathers information about them.


To this end the same research found that two-in-five (38%) consumers agreed that they prefer to receive general offers, rather than rewards tailored to their shopping habits (while only one-in-five (21%) disagreed).  When we probed the apparent contradiction between this and the reasons consumers gave for being satisfied with their schemes in focus groups, the same rationale came up time and time again:  they do not like ‘big brother’ watching them, and they certainly do not like the feeling that the brand is in any way intruding into their everyday worlds.  Schemes that do this too brazenly therefore can become vilified for making use of the very mechanism that previously ensured their popularity.


So what remains for loyalty schemes is the fine line between overt intrusions into consumers’ lives, and providing rewards that – through lack of ‘intelligence’ – never really quite hit the mark.  Ultimately then, loyalty schemes, however dependent they are on complex and sophisticated technology, and however closely they monitor their customers, need to remain light-handed and discreet – the perfect counterfoil to the more brazen, bargain-hunting consumer.

Related posts:
Time is Ripe for Retailers to give their Promotional Strategies a Summer Makeover
Brand Ambassador in your Wheelie Bin
The significance of choice
Four ways to protect your margin for a Merry Christmas
Is the market for Mobile Wallets about to open up?
What to expect when e-commerce turns forty
January 13, 2012