Loyalty cards used to be such simple things – collect masses of points, get irritated when points mean less than you thought (you know who you are Co-op & Sainsbury’s), and cause burst seams in purses and wallets. Some you could trust to do a great job, flexibly, for example the Boots Card, some you just knew were cynical data gathering ploys – if in doubt read “Scoring points”and cases studies on Tesco Clubcard and Dunn Humbys influence. Sainsbury’s and Nectar have always had a broader reach – but I never know if what I am collecting is valuable as the store has stopped mentioning them at checkout & my local BP garage has an unusually high staff turnover.
But let’s start with a few interesting stats;
– Loyalty cards abound in the UK, 96% of the uk population own at least one
– 8m of us are using them less frequently – that’s about 12.5% of the uk population
– 21% would prefer them on our smart phones
– What’s more 1 in 3 of say we derive no value from them – these illuminating stats are from WorldPay, who conducted a survey just over a year ago.
So is this trend continuing? It looks like it to me, even though the typical shopper will still use their loyalty cards eight times a month, they will now only save an average of £98.04 annually, down from £100.32 in 2012, so in the continuing austere climate this is a worthwhile contribution to household bills but it is shrinking.
But the reality is that a £2.28 reduction is likely to be immaterial in the overall scheme of things. So I wonder if it is the ‘data’ effect that is leading us to challenge the use of loyalty cards … as a marketer the holy grail for me is being able to personalise communications to allow a true 1-2-1 conversation. But it carries risk – ‘Big Data’ scare stories are increasingly common and I think Consumers are smarter than they used to be – they may be happy to trade data for discounts, but it looks increasing like a blunt tool and one that does nothing for the customer experience or the brand health.
But what does that really mean? It’s easy for me to just write the words. Ok, an example, a real one, imagine it’s your Saturday tea time & you are watching the X-Factor and having a disagreement with your other half. It happens, trust me, not to me you understand, but I hear that it does. Now imagine your tv or digital box has a built in microphone & picks up that argument. Then imagine the value to an advertiser, say Relate or a marriage guidance counsellor, of that insight. Ads could be streamed direct to that tv for the remainder of the show. Far fetched I hear you cry, not a bit of it, this example was the subject of a US patent application in 2013 (ok it was for American Idol!) by one of the telecoms players. (source)
At Advertising Week Europe in March, Bartle Bogle Hegarty founder Sir John Hegarty complained of a “creative deficit” in marketing caused by an over-reliance on new technology, while also warning that consumers are growing suspicious of “Orwellian” data collection practices. A few weeks earlier, “Now” creative partner John Townshend, had argued – at an event run by TV marketing body Thinkbox – that marketers are not giving agencies the freedom necessary to generate ideas, the implicit criticism being an over reliance on clever data.
On a simpler level a past neighbour of mine, knowing my job, button-holed me after receiving a personalised motor insurance quote detailing his car type and registration from a company he had never insured with – I kept my “nice work” thought to myself though!
But that’s only a hypothesis. The most interesting response I think to both the conundrum of data collection, knowingly, and the over abundance of loyalty cards seems to be the growth of random acts of kindness – not by chance either, they truly enhance word of mouth marketing by really enhancing the customer experience.
Eschewing the collection of points, John Lewis and Jamie’s Italian are just two brands taking this approach and both are doing it really well. I base this on how many of my friends I have repeated these experiences too and first hand experiences.
John Lewis and Waitrose, so long the outliers in the loyalty game – relying on great service and great advertising, but, not collecting purchase data and habits must have been hurting them every day in trying to grow value from customers when it did not even know if they were one offs or regular shoppers. The ‘My’ card is very nice, chunky and solid feeling with a nice key line colour on the edge – stand out in the wallet is thereby assured. It’s simple premise – use it and get free cakes and coffee – genius – who doesn’t like a free cake and frothy coffee? The benefit to John Lewis of all that data and word of mouth is incalculable.
Jamie’s good old fashioned ‘Gold Card’ is anything but … pitched with a degree of exclusivity and luxury that really helps. It’s actively promoted by the great staff in Jamie’s – the Norwich staff recognised us and told us about it in fact. What does it get me? Free tasters each time I have a main course, the feedback from which will help future menu direction I imagine. Birthday treats and invites to exclusive events – where no doubt I will eat and drink and spend … All whilst Jamie learns if I like squid or chicken. It’s a glorious feeling as the free tasters are delivered. You feel special – you know other people, not in the know, are looking on jealously.
I already like these brands so I guess I am biased but they are doing the same job as the Nectar card et al probably for a different target audience I grant you, but I think the not so random acts of kindness they bring are more sustainable, broader in their brand impact and no doubt much cheaper than the alternatives used so far. Right I’m off for a cake in John Lewis now … See you next time.
09 Dec 2013