GI report reveals importance of loyalty schemes

A report from GI Insight has suggested that loyalty schemes have become more important over the course of the recession.

Overall, 71 per cent of marketing decision-makers felt that loyalty schemes have become more vital to successful business over the last two years.

Marketing decision-makers from utilities and telecoms (97 per cent), banks (82 per cent) and retailers (74 per cent) were especially supportive of loyalty schemes in the economic downturn.

Many businesses that do not operate a loyalty scheme still carry out database marketing activities, such as one-to-one communications, targeted direct marketing and customer insight.

According to the GI Insight study, 27 per cent of 500 marketing decision-makers surveyed said their firms had become more reliant on database marketing as the recession progressed.

Meanwhile, 37 per cent said communicating with a database of customers had been key to helping them weather the downturn.

However, despite the increase in support for loyalty schemes, only 50 per cent of respondents felt that these programmes were fully integrated with other marketing activities.

Andy Wood, managing director at GI Insight, said: 'Loyalty has been put to the test during the recession as consumers have sought out the cheapest deals.

'As a result, customer retention has been a clear focus for most businesses over the past two years and many have realised the importance of loyalty schemes in helping them to achieve this.

'Additionally, a significant proportion of marketers have recognised the value of database marketing.

'The real danger, though, is the lack of commitment to marketing integration.

'If marketing activities are not integrated, then a business is less able to ensure consistency of message and could waste money on redundant communications - both of which might hurt return on investment and cost them competitive advantage over a rival firm,' he added.

Wood said: 'With the UK now coming out of recession, many businesses will see the recovery period as an opportunity to prospect for new customers.

'The risk, though, is that the existing customer base may get neglected in favour of attracting prospects.

'Management of existing customers should always come first, no matter what level of attention is being given to prospects.

'Businesses that have survived the past two years without seeing the need to invest in loyalty or database marketing will be put to the test now that the UK is exiting recession as they are going to have a tough time catching up with those that are better prepared - especially if they haven't bothered to integrate their marketing activities.

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