Are customers truly engaged in loyalty programmes?

The question of whether loyalty programme operators are actively seeking redemption is nothing to do with a moral or ethical quest for inner peace, but more to do with whether or not they are encouraging programme members to redeem the points or currency they’ve earned, according to Mike Atkin of MJA Associates.

Loyalty experts tell us that programme members are not fully engaged with a loyalty scheme until they have redeemed their points or miles and, therefore, operators should encourage ‘burn’ in the same way that they encourage ‘earn’.

Of course, some cynics say that many operators would prefer to enjoy the ‘breakage’ rather than endure the redemption. Indeed, we are seeing lots of creative ideas and offers that encourage participants to earn more points and miles (with double or triple points promotions and other bonus offers abounding), so why aren’t we seeing similar campaigns to encourage redemptions?

Typically, Tesco is enabling its Clubcard members to increase the value of their points by redeeming them for higher margin products, or with programme partners (thus reducing liability, increasing the perceived value of the points, and driving business for the partners).

This not only improves the value proposition for the customer but, of critical importance, it also means that customers don’t use their points to buy things they would have bought anyway. In other words, it avoids discounting the shopping basket.

We see offers from airlines, hotels and other travel loyalty schemes that are designed to get consumers to book flights and accommodation, and to earn bonus points. So why can’t consumers have offers that encourage them to burn their points? There have been a very small number of these campaigns recently, but why shouldn’t every programme offer “points are worth double” offers for the right kinds of reward redemptions?

Technology has improved significantly in respect of bonussing capabilities, and it is time to see some more creative bonussing efforts to help reduce funding liability and increase customer satisfaction.

This article is an extract from the 30 chapters of detailed coverage in ‘The Loyalty Guide 4’, which is The Wise Marketer’s latest global guide to customer loyalty and engagement techniques, best practices, models, metrics, practical advice, market data and research. The report provides hundreds of detailed case studies, forecasts, trends, tables and visual materials to support new initiatives, presentations and proposals. See how customer data can increase profits, reduce churn, and increase frequency, spending, and share of wallet, and find out where your competitors are succeeding or failing, and why.

Space NK loyalty programme

Space NK launches loyalty programme

Cosmetic brand Space NK is introducing a loyalty programme in a bid to become the “market leader in beauty retailing”.

Space NK says the N.Dulge programme will reward customers for their loyalty and “make the Space NK shopping experience even more indulgent”.

It will also use the data collected through the programme “to interact with and develop a better understanding” of customers.

Customers will earn one point for every £1 spent on the brand in store or online and be rewarded with a £5 N.centive voucher for every 100 points.

Customers that spend more than £1,000 in a year will be upgraded to the N.dulge deluxe programme, which has additional benefits such as double reward vouchers.

Cardholders will also have access to additional benefits such as previews of new products, special events and sales, free samples and a complimentary subscription to Space NK’s beauty magazine, N.vision.

Space NK operates 60 own branded retail outlets in the UK and 18 in the US.

Lauri Vela, Space NK chief marketing officer, says “Space NK constantly strives to deliver the best in terms of expertise, product mix and in store experience to each customer – N.dulge is an extension of this philosophy and is our way of rewarding our customers for their continued loyalty as well as a way of inviting new customers in to experience our brand.

Original article: http://www.marketingweek.co.uk/sectors/fmcg/space-nk-launches-loyalty-programme/3019682.article