The initial thinking behind loyalty schemes/cards was to reward regular customers and, in turn, encourage repeat custom. In recent years, these schemes have become rich sources of data for the companies that issue them. This data is in turn used to find out what customers are buying and what they are interested in, with companies enjoying both strategic and financial benefits from the use of this data. Just as technology has advanced, loyalty schemes have, too. As a result, many critics argue that the consumer benefits of this practice are beginning to wane. But if this really the case – and more importantly, are loyalty schemes still worth our time and effort in 2019?
Coffee shops
When looking at the value of loyalty schemes, coffee shops are a great place to start. Many of us are probably already familiar with the stamp system whereby customers are rewarded with a free beverage after so many stamps. Although not strictly a coffee shop, McDonalds still employs this system and it has proven successful for many years. On the other hand, coffee giant, Starbucks, have ditched this scheme in favor of plastic loyalty cards akin to those handed out by supermarkets. Companies are undoubtedly collecting more data from customers in this way but the question is, are they passing on this benefit to the consumer? Starbucks’ current reward scheme states that you have to use you loyalty card 15 times before getting your free beverage which means, unless you drink as much coffee as Twin Peaks’, Agent Cooper, it’s likely that you’re never going to feel a noticeable benefit. As an aside, Coca-Cola recently acquired the UK brand, Costa, so you will now soon be able to comparer the two universal coffe brands’ loyalty schemes here in the U.S.
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Online VIP and loyalty services
A number of companies now offer online schemes which revolve around loyalty or paying a monthly premium to enjoy the benefits of VIP membership, which also encourages returning custom. The North Face reward customers with points with every online purchase while companies such as Barnes & Noble operate a VIP membership program which gives you 10% discount off virtually every item on the website.
With online gaming loyalty programs, platforms such as Aspers Casino, offer VIP perks and promotions such as special access to the ‘slot of the month’, and have also put in place different stages of VIP levels, depending on your input. If customers particularly favor a certain game, such as the popular Starburst slot game, for example, the bonuses and perks reward this loyalty and maintain high levels of consumer satisfaction and engagement. Again, your savings really depend on how much you use the service in question. However, The North Face’s scheme has certainly increased customer engagement and is highly praised by many online review sites.
Supermarkets
It’s impossible to talk about loyalty cards and schemes without mentioning supermarkets; after all, they are the most likely to be central to a consumer’s lifestyle than any other. With so many factors to consider, analysis of supermarket loyalty schemes is tough. Special deals and offers within the supermarket industry are transient, and this can have a massive effect on where people choose to do their shopping from one week to the next. Consumer magazine Which? has done a number of studies relating to the relative cost of shopping at ASDA or Tesco (formerly Fresh & Easy in the U.S. – remember them?) for example. With this information, the different loyalty schemes and cards can be factored in to assess their worth to each individual customer.
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Final thoughts
If you’re looking to save money then loyalty schemes and cards pale in comparison to shopping around for good deals. At the end of the day, it’s worth having a loyalty card as long as you don’t mind handing over your data to “the man”. A loyalty card or scheme should never be your sole reason for shopping in one specific place – but for now, at least, they do have a place within the consumer landscape.
