What future for loyalty programs?
A recent study conducted by Simon-Kucher & Partners has shown that loyalty cards are still popular in the food sector!
In fact, 81% of French people are enrolled in a loyalty programme of a food retailer and mainly benefit from cashbacks.
The preferred brands in terms of loyalty programs are first and foremost E.Leclerc, followed by Carrefour, Intermarché and Auchan.
However, the fact of having a loyalty card does not encourage people to buy more frequently in the store. And joining a loyalty program does not imply being loyal to the brand.
The study also shows that expectations regarding loyalty programs are unanimous, with the French looking above all for discounts and vouchers, regardless of the type of retailer.
So, what about loyalty programs looking for more services and experience?
Outside the food sector, many retailers have indeed abandoned the traditional loyalty program for a different approach.
They are returning to the fundamentals of customer relations and are looking to create a sense of recognition and consideration for their customers.
Emotion is at the heart of the relationship and many brands, for example, offer a gift on birthdays.
Some brands such as Nike create mobile applications that allow their customers to measure their sports performance.
Other brands offer free workshops or activities (discovery workshops for Nature et Découverte, make-up sessions for Sephora, etc.).
For customers, in order for the customer experience to run smoothly, it is essential that the loyalty program works at all points of contact.
Although this is more complicated for brands that go through resellers, it allows for a single customer database and the ability to offer a personalised customer experience across all channels.
Loyalty programs still have a future. But beyond promotional benefits, brands need to create a personalized relationship across all channels and provoke emotion to capture increasingly disengaged and volatile customers.
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The LDB Mica Research team