Loyalty in the UK

We’ve spent some time researching the erratic residents of the UK and how they shop. What are we trying to find out? One thing: what do the British public think about customer loyalty programmes? We want to understand what it is they want from reward programmes, and how they can positively or negatively affect a brand’s reputation.

We should start by saying there isn’t a one-size-fits-all when it comes to customer retention. Naturally, the word ‘loyalty’ means different things to different people and it can vary a lot from sector to sector. So, while there are many different types of reward programmes, for most, the end goal is the same. The focus is getting under the skin of a business’s customers to realise what’s meaningful to them and, then, using that to keep them coming back.

How the British feel about loyalty programmes

Following a recent survey from YouGov, we’ve been able to get a better understanding of how the nation feels about its many loyalty programmes. We’ve taken a deeper look into exactly who subscribes to them and, what’s more, which businesses are truly getting ‘loyalty’ right. So, let’s get into it:

According to the survey, the majority wants and expects a brand to reward them for their continued custom. Almost six in ten (59%) of British adults think all brands should offer a customer loyalty programme and over three quarters (77%) of them are subscribed to at least one. What’s more, over seven in ten (72%) think loyalty programmes are a great way for businesses to reward their customers. So, the demand is clearly there, even amongst men. However, women are most certainly leading the charge. There is larger bias in women than in men. In the sample, 85% of women were members of loyalty programmes vs. just 70% of men.

Conversely, young men (18-24) are the least likely to subscribe to loyalty programmes. This group is also more likely to be single and still in education. We put this down to a more complex life stage and possibly less exposure to loyalty programmes at this age. Generally, non-subscribers tend to pay in cash when out shopping and this group is also perplexed by financial matters. They perhaps don’t understand the benefits of reward programmes as well as subscribers. So, rather than trying to offer this group entries into prize draws and the opportunity to accumulate reward points, offer them hard and fast cash discounts.

What they want out of customer loyalty programmes

There’s no doubt that the general public wants something for nothing. Don’t we all? Plus, with e-commerce's rapid growth, the nation is becoming better at shopping around. Naturally, we are becoming a smarter and savvier nation. It’s never been more important for brands to stay a cut above the rest. Businesses need to offer something more than just cheap goods. So, how can a business go above and beyond the norm? Let’s look at the options:

  • offer loyal customers free products or services. Depending on how long they’ve been transacting with a  company, free gifts can be increased or decreased in value;
  • provide discounts and offers to be used on the business regular product or service offering, Of course, this could be hard and fast incentives or let customers build up and collect rewards points over time;
  • finally, reward customers with access to partner brand incentives. This is particularly strong in the airline, retail, petrol and supermarket sectors and if businesses recognise customers have lives outside of their relationships with them, they’ll love them for it

In terms of how customers actually engage with loyalty programmes, YouGov states that 91% of loyalty programme subscribers say they collect and actively redeem the reward points that they earn. 44% of customers say they are more likely to save points up for a higher value reward. Finally, 27% redeem on a regular basis (and don’t save them up).

The positive effects & brands that get ‘loyalty’ right

Now we’ve got a better idea of what it is that customers want out of loyalty programmes, let’s take a look into what’s in it for businesses: according to the research, 47% of customers actually spend more with a brand or business. 38% are more likely to recommend that brand. Finally, 28% feel more emotionally connected to a brand.

Finally, here are a few of our favourite customer reward programmes:

  • Boots Advantage Card: the key to the pharmacy chain’s success really is simplicity. In fact, they can even sum it all up in just a few sentences: 4 points for every £1 spent. 1 point equals 1 penny to be spent on gifts and treats for all. Could it be any easier?
  • Nectar Card: as mentioned earlier, offering customers partner rewards can be good for all. Nectar points can be redeemed at all stores and e-commerce websites that are participating in the scheme.

So, what are you waiting for? If you want to find out more about how a customer loyalty programme could improve your customer retention rates, drop us a note and we’ll kick-start the conversation.

James Mooreloyalty