Written by Monique Jansen for Buljan & Partners Consulting
During the late 90’s and the early years of the 21st century, in many of the CRM mindset training sessions I delivered for our clients, I used to ask participants to get out their wallets and purses and start counting loyalty scheme and membership cards. They usually had many. Then I would ask them to name the companies and brands that they felt really loyal to. The common outcome was that they mentioned only a few, and in many cases those brands were NOT the ones they carried the cards from.
A few years later this training trick did not make too much sense anymore, loyalty schemes were cancelled, went bankrupt or prioritized out, because they failed to prove return on investment.
Companies started to realize that loyalty is not just bought through a nice scheme, but that instead loyalty depended on various factors:
- A good quality product with its 4 marketing Ps well balanced.
- Ad-on services adding value to the product and brand experience.
- Organizations, processes and systems that are customer focused.
- Intelligent decision making tools that use customer data effectively.
- Consistent customer experiences across all touch points.
Yes, CRM and the understanding of what creates loyalty, evolved.
Now that the economic crisis is at its peak-point (Apologies for the oxymoron) suddenly the loyalty cards are back. At least in my wallet they are.
In Spain, retail businesses are fighting to retain customers in any way they can. I have recently been offered 2 new cards, which i both accepted. They were 2 different approaches though, and from the way loyalty schemes came and went over the past 15 years i can foresee one of them failing while the other one might do well. Here is why:
Trébol (pharmacy chain)
During a recent visit to one of their branches I was asked by the lady who attended me if I lived close and if I did, was I perhaps interested in getting 5% direct discount on all non-pharmaceutical products, like cosmetics? Of course I was, 5 % off is not bad at all. She gave me the card, asked me to write down my first and last name and no further hassle. That was the first new Loyalty card added to my wallet.
A recently inaugurated branch of Bodyshop on my way back from work caught my attention. Since Bodyshop started business in Europe I have been an admirer in marketing terms because of the way they found their space in the market with a unique position statement. I have been an occasional customer. Yesterday I dropped by and bought a few products. The sales person attended me very professionally when I asked her for advice, and at the till she asked me if I was interested in hearing about the new customer card. The scheme does not give immediate discounts like Trébol’s, but I can accumulate points for unique promotions and invitations to events. I agreed, and asked me to fill in a form with my names, birth date and email address and she quickly typed it into the computer, and had me check my data on the screen to make sure she made no errors. 5 minutes later I got a welcome email from the Bodyshop, and I was able to learn all about my new membership advantages.
Can you guess which one of my newly acquired cards will be most actively used by me, and which one will bring most benefits for the brand? Which of the 2 could we label as a success case of loyalty management? Trébol might seem a winner because I like direct discounts, but I think Bodyshop aims for a long term goal, having my data and hopefully creating long lasting customer relationship.