Last weekend there was an interesting article in The Daily Telegraph’s Your Money supplement titled, “How loyalty cards stack up” (14th July 2012, page 8). The article looks at whether loyalty schemes have become too complicated for customers and if it’s now too difficult for customers to compare which loyalty schemes are of most benefit, and which retailer they should spend their money with. In this time of economic uncertainty, it suggests that the companies that offer the easy to understand, money-off, cash-back schemes will be the winners.
The Logic Group’s annual consumer loyalty survey, due for release in a few weeks, captures that the key pain point for consumers in the UK is the cost of their shopping basket; hence why money-off schemes are growing in prevalence. These are not profitable long-term strategies though. The real challenge, then, is how to bolster consumer spending in the long term, without risking removing discounts entirely, but driving incremental profitable consumer interactions?