Logic Group releases loyalty scheme guidelines

The Logic Group has revealed important guidelines on how businesses can initiate a successful customer loyalty programme.

The principles are being released in response to a Logic Group and Ipsos Mori survey of 2,000 consumers, which revealed that 46 per cent of Britons feel they are not part of a loyalty programme.

Furthermore, those that were part of a scheme felt indifferent about them; in the retail sector 51 per cent felt 'fairly satisfied' with the benefits of schemes, while only 24 per cent in retail and 13 per cent in financial services described themselves as 'very satisfied'.

Anamaria Chiuzan, customer insight and loyalty - senior marketing manager at the Logic Group, has explained how businesses can seek to increase the number of people signed up to programmes, while improving satisfaction levels with those that are already members.

First, keep loyalty messages relevant and simple.

Relevant, clear messages together with appropriate offers and rewards will ensure customers get engaged.

Rewards that are relevant to the individual rated highly among consumers in the survey; 30 per cent said that this would encourage them to spend more with a business.

Second, always know your loyal customers.

Understanding who your customers are, where they are, how they shop and where they shop is paramount in personalising the customer experience and exceeding expectations.

As businesses continue to implement retention strategies, the data they collect becomes a key asset in managing the relationship with valuable and less valuable customers.

It is vital that they demonstrate loyalty to their most loyal customers and an understanding of what is important and relevant to them; existing customers will not be taken for granted nor will they tolerate having their expectations ignored.

Third, deliver loyalty through customer service.

A loyalty programme must be integral to customer service and businesses must ensure customer-facing staff - and all employees - are aligned with the goals of the loyalty programme.

A loyalty programme is most successful when its benefits and core messages are successfully promoted to members across each customer service touch point.

The survey found that good customer service is the number-one factor in encouraging spend, while at the other end of the scale poor customer service was the chief factor in discouraging consumers to spend more with an organisation.

Even within the confines of a loyalty scheme, customer service is still king for today's consumer.

Fourth, plan your customers' loyalty journey from the outset.

Map the entire customer journey in order to design a differentiated programme.

Your loyalty offers must be relevant to customers and your loyalty journey must build gradually throughout their lifecycle: loyalty is nurtured over time and not achieved purely through subscription.

This approach will sustain strategies to grow customers' profitability and value to the business.

As our survey demonstrated, businesses also need to understand that trends in loyalty vary across the loyalty journey with considerations such as age and lifestyle having a major impact on customer loyalty.

For example, the Logic Group and Ipsos Mori survey found that feelings of loyalty grow with age for banks while they buck the trend for clothes shops.

Therefore businesses need to create a loyalty journey that responds to changing priorities in life experienced by their customers.

A clear customer journey defined from the outset will keep your loyalty efforts focused and at the same time reduce challenges later in the execution phase.

Fifth, integrate loyalty into all your communication channels.

Build a consistent customer experience off and online.

Businesses need to recognise customer choices and should communicate via all available channels at the right place and at the right time.

A consistent loyalty experience throughout all these channels will reinforce the notion that loyalty is at the core of your business values and will encourage repeat business among your customer base.

The survey shows that savvy online customers do expect to enjoy the same loyalty benefits online as in store and it highlights a dramatic negative impact if they don't: 18 per cent of customers will not spend more if they cannot collect points when they shop online.

Sixth, invite customer feedback.

Use customer opinion to calibrate your progress and optimise your loyalty model.

Customers are ready and willing to give feedback if they see that their voice is heard.

At the same time, businesses often run customer surveys to understand expectations and motivations better.

This information can become a valuable asset that informs business decisions; as long as the information you are asking of customers is relevant and actively employed in defining your loyalty model.

Chiuzan said: 'The facts speak for themselves: the market is oversaturated with loyalty programmes but very few are successful.

'However, there is enormous potential for businesses to successfully revamp the loyalty experience.

'On one hand customers understand loyalty and are ready to enjoy its benefits, and on the other businesses have finally acknowledged at board level the key role loyalty strategy has to play in driving customer satisfaction.

'But loyalty programmes as we understand them today need to be refreshed and businesses must understand that a successful loyalty programme relies on successfully integrating its intrinsic complexities into a seamlessly excellent customer experience.

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