Why shopper cards don't create loyalty - but data does

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By: Wise Marketer Staff |

Posted on March 21, 2007

Customers' loyalty to a store is seldom - if ever - due to the plastic loyalty card they carry. Nor is true loyalty due to simple discounts, points or prizes. The Wise Marketer believes that loyalty comes from the improvements and smarter decisions that stores can make based on intelligent usage and analysis of the data gathered through the loyalty programme.

Not surprisingly, then, a recent survey from The Hartman Group confirmed that shoppers are not swayed by loyalty cards alone. In fact, nearly three-quarters (74%) of shoppers disagree that a grocery store offering a frequent shopper card makes them want to buy more there.

The shopper's view
According to the report, shopper cards do not promote loyalty among customers and are seen by most customers as merely a way to obtain savings. The report, entitled 'Pulse Report: Shopper Cards from a Consumer Perspective', explains how well consumer attitudes and behaviours align with industry intent and practice by examining various components of how shoppers use, view and perceive grocery store frequent shopper cards and instant coupons. The report also examined various issues regarding privacy and loyalty card data.

"Shopper attitudes toward their primary supermarket are not influenced by whether the store offers consumers a shopper card programme. Consumers are not as loyal to a specific store as retailers would like to believe, and are more likely to be loyal to lower prices and savings. We're finding that consumers are shopping a wide variety of retail chains and channels and possess multiple stores' shopper card," explained Laurie Demeritt, president and COO for The Hartman Group.

Consumers want more
The company warns that the desire for more customers and better customers will not be won by simply requiring them to use a loyalty card. Findings suggested that most consumers see these cards as something that offers few rewards and causes time delays at the check out.

Interestingly, fewer than half of consumers whose grocery store offers a card and whose store does not offer a card consider their primary grocery store as a "friend" or "partner".

Using loyalty data
As the editors of The Wise Marketer explain in the latest edition of The Loyalty Guide, a company can't bind a consumer by offering pure incentives or reward points. But the data that a loyalty card programme provides - in terms of demographic, attitudinal, transactional and historical information - is what can help a retailer differentiate itself from competitors.

Using loyalty programme data, a smart retailer can isolate best (profitable) customers, least profitable customers, at-risk customers, lifestyle patterns, potential growth segments, operational 'pain points' that put customers off, potential up-selling and cross-selling opportunities, and dozens of other useful business intelligence factors.

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