Great Loyalty Debate Seminar Key Insights
With Sainsbury’s in
the news with changes to its Nectar programme, the issue of loyalty is high on
the agenda. IPM managing director Jodie Hopperton recently chaired a seminar on the subject, with contributions from Clive Humby of DunnHumby, Steve Mader of Kantar Retail and more. Here are her key learnings from the morning...
1. We need to
redefine our definition of Loyalty
Have we been distracted by our short term
financial goals be it personal or to corporate shareholders?
Clive Humby spelled
the main challenge out when he told the audience that 60% of fmcg sales are
through price promotion, which, he argues, is far too much of a reliance on one
promotional mechanic, particularly one which erodes brand value. By definition,
loyalty is long term, not short term.
It was also
made clear that fmcg marketers and retailers need to find other ways of
promoting products which add value to them and build brand equity – an argument
which the IPM fully endorses.
something that customer owe retailers or brands – it’s something retailers and
brands owe their customers. At its simplest, loyalty is about saying thank you
to your shoppers for supporting you and encouraging them to stick with your
It seems that consumers have become conditioned to expect a certain
level of reward through points based schemes.
marketers need to inject some ‘surprise and delight’ into their loyalty programmes
– an idea that I love. It moves us away from that feeling of entitlement and
rather than a consumer having a ‘loyalty’ card, collecting stamps each time
they have a coffee and getting their 10th one free (an expectation), why not
give a coffee shop’s manager the discretion to give away a percentage of
coffees every day for free? It reintroduces some excitement into the
3. Take Back
Ownership of Your Brand
are out there on sites on websites like Amazon with price points that are far
removed from what the brands would like them to be. Amazon are successful
because they make the path of purchase easy, and brands are
often becoming one or two steps removed. Both
Clive Humby and Steve Mader from Kantar encouraged brands to explore ways to take
ownership of their brands back by having direct relationships with online
retailers and by using loyalty schemes to drive shoppers to their official
sites, and then reward them for remaining loyal.
this, there was a clear message about the need to link sales and marketing better.
Often, marketers don’t have any control over price, which is craziness… price is
one of the fundamental 4 Ps, after all!
not just about data. We talk a lot about ‘big data’ but what is actually needed
are those small nuggets of real consumer insight amongst all the noise.
Data needs to
be contextualized around an individual shopper – through a loyalty scheme or
from ePos records by marrying it up with their activities on social media – to
create a real, valuable picture of their purchase paths. Look at what they love
and share, and build your rewards offering around that core understanding. Data
is wonderful – use it wisely.
5. What Comes
get fed up carrying around a wallet full of loyalty cards, let alone being
bombarded with messages from a range of different loyalty schemes in various
forms of media. We need to be smart about how and where we target. Can we use
mobile phones more effectively? I, for one, don’t necessarily want to exchange
a card for an app, but I’m open to integration in some way.
want rewards which are relevant to them and to their relationship with a
particular brand or retailer, and they want to be excited by what they get
As yet, the
Great Loyalty Debate suggests, nobody has cracked this particular brave new
world although it doesn't seem we are far off. Should we start bets on who will
get there first?
Great Loyalty Debate was organised by IPM member company Hive, which
specialises in online loyalty platforms and unique code generation and use.
Edited highlights of the discussion will be available from Hive soon.