Loyalty works best when it works both ways

Bryan Dollery

by Bryan Dollery

They say that trust is a two-way street, so why should loyalty be any different?
They say that trust is a two-way street, so why should loyalty be any different? While retailers are looking for loyalty from their customers, what seems to be getting overlooked is that shoppers are actually looking for the exact same thing from retailers.

Betty works for the same company for fifteen years. As thanks to Betty, the company gives her a gold star and a high-five. Meanwhile, Billy gets ten-out-often in his spelling test. The teacher congratulates him, and hands him a bouquet of rainbow lilies.


To the best of our knowledge, this hasn’t really happened – but imagine if it did. A disgruntled Betty would be looking for places to send her CV, and Billy probably wouldn’t bother revising for his next test. Why? The rewards didn’t appeal to them. If we apply this same thinking to customer loyalty schemes, the outcome is obvious – shoppers won’t stay loyal customers if they’re not interested in the rewards. Let’s take a look at what digital means for the effectiveness of customer rewards.


Where the shopping happens

The days of stamp-collecting loyalty cards crumpling in our wallets are behind us, as loyalty schemes join the collection of marketing techniques being empowered by digital - and it's not hard to see why. In 2011, there were 792 million online shoppers worldwide. That number has steadily grown each year, with 2016 expected to see that number hit 1.32 billion. It’s no surprise that online shoppers want their loyalty rewards online too; in PwC's most recent Total Retail survey, 58% of online shoppers chose email as their preferred method of receiving discounts, promotions and coupons, with a collective 11% choosing other online channels.


What the scheme offers

Let’s say you already have a loyalty scheme in place; does this mean it’s time to take it online, digitizing what you already have? Possibly, but it could also be a good opportunity to assess if the type of scheme you have in place is optimal for your customers; in many cases today, it isn’t. Of the $48 billion worth of reward points and miles distributed by American businesses annually, two thirds never get redeemed. If your reward scheme isn’t offering what your customers are looking for, they’ll find it elsewhere. There is a lot to weigh up when building a reward scheme, so be sure to check out HubSpot's guide on Customer Loyalty Programs.



Of the 23,000 online shoppers around the world in PwC's 2016 Totail Retail Survey (1) :

  • 91% were a member of a loyalty program
  • 70% said that member-only discounts are a top benefit
  • 61% said collecting reward points was a top benefit




How the retailer benefits

So you’ve chosen what you believe to be the most effective loyalty scheme, and you want to take it online – but what are the benefits for you? Primarily, digital loyalty schemes allow for the collection of customer data, meaning you can stay on top of what is being redeemed by who, where and when. Data generated by a digitized loyalty scheme can be used to improve the scheme itself, allowing you to adapt your rewards according to changing consumer behaviors.


Digital technologies are empowering retailers and marketers in so many ways, but reward schemes are one of the areas where that potential hasn’t yet been fully utilised. Taking reward schemes digital is about more than rewarding customer loyalty – its about retailers proving theirs.