Loyalty schemes and cards first appeared in the UK around 30 years ago. Nowadays they are the norm, with the average consumer’s purse or wallet stuffed full of different store cards. 86% of UK adults will have at least one loyalty card, with 29% carting five or more around with them. These days, it’s not just loyalty cards which offer customers a way of generating extra cash and other incentives while they spend. More and more credit cards are starting to offer ‘cashback’ on purchases, while consumers can also be rewarded for sharing information about themselves such as details on their shopping or mobile phone habits.
The recession has meant that loyalty schemes are now more popular than ever and they have become an extremely important way for retailers to retain customers, who are otherwise fleeing to whoever’s offering the cheapest prices for what they want. Loyalty schemes work because it takes quite a bit of time for a customer to earn enough points to get their reward, meaning they carry on shopping with the same retailer until they achieve what they want. You have to be careful, however, not to make the reward completely unattainable. You also have to be careful and make sure that you are offering a reward that customers actually want. Cashback and voucher schemes are successful because customers can then usually choose a voucher that corresponds to where they like to shop or which allows them to save up and buy something more expensive that they’ve been wanting.
