In For A Penny In For A Pound: Customer Loyalty In The Consumer Age
Everybody likes something for nothing be it a buyonegetonefree deal complimentary massage or a business lunch. It is always that little bit more enjoyable when one of lifes little pleasures comes gratis.
The same can be said for supermarket loyalty schemes where consumers are rewarded for doing nothing more than what they normally do shop! What the supermarket gets in return is consumer consolidation where a customer is encouraged to do their entire shop under a single roof; this also helps to explain why so many large supermarkets have now branched out into electrical clothing and other areas of retail over and above traditional groceries.
Once upon a time it may have been enough to have a good product and good customer service to create the loyal customer; but in an age where competition is fierce and choice is so plentiful this is becoming increasingly insufficient to keep customers coming back. And this is also partly why more and more retailers are becoming involved in loyalty schemes.
This loyalty scheme concept is an extension of the Air Miles reward programme that was established in the 1980s where travellers are rewarded for frequent flying. The more often they fly the more points they get and these points can be used against the cost of any flights purchased in the future.
Now the reward concept has grown arms and legs and has led to the consortium concept where retailers who normally exist in different markets club together to enable loyalty points to be used elsewhere. The Nectar Card scheme is a classic example of this where consumers can gain and spend points at service stations supermarkets and carhire firms to name just a few.
Now there is even a hotel loyalty program which is aimed more specifically at the frequent traveller. Unlike traditional frequent flyer schemes this program enables the customer to earn loyalty points or airline miles each time they stay in a participating hotel. Any airline miles that are accrued can be used with over fifty participating airlines worldwide. And similar to the Nectar Card scheme the loyalty points can be redeemed with numerous partner organisations from entertainment parks to credit cards and partner bonus points can even be earned when hiring cars from participating car hire companies.
So its clear that in the modern consumer age retailers and service providers are working harder than ever to build a loyal customer base. With competition and choice more abundant than ever the parting pleasantry thank you come again has never been more genuine.
About the writer: Paul McIndoe is an online freelance financial journalist. He lives in Edinburgh with his two dogs.
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