Customer loyalty schemes don’t create loyalty

Just before Christmas I saw an article on the Econsultancy blog: Loyalty schemes don’t create loyal consumers, says Ipsos MORI. The post was based on research conducted by The Logic Group and Ipsos MORI and suggested that:

• Customer loyalty schemes don’t necessarily drive loyalty;
• That customers want something ‘special’ in exchange for their loyalty, where 71% said that that would entail better offers or services and 48% said that would mean better customer service than other customers.
• But, customers also said that they like ‘free stuff’ and rewards but if presented with a good enough and better offer then they will buy from another business or brand.

So, it seems that most loyalty schemes are reward programmes that don’t necessarily drive loyalty.

So, what does loyalty mean?

In the dictionary, loyalty is:

1. the state or quality of being loyal; faithfulness to commitments or obligations.
2. faithful adherence to a sovereign, government, leader, cause, etc.
3. an example or instance of faithfulness, adherence, or the like: a man with fierce loyalties.

Whereas, Seth Godin in his post Loyalty suggests that:

“Loyal customers understand that there’s almost always something better out there, but they’re not so interested in looking.”

No mention of incentives in either of these.

Let’s not kid ourselves. A reward or ‘bribe’ by another description can and only will last for as long as it is not bettered by another. Just look at the picture above. How many ‘loyalty’ cards do you have in your wallet? Just because you have one in your wallet does that make you loyal? Probably not. I bet it’s got more to do with convenience.

Therefore, if you want to breed real loyalty then give your customers something that is ‘special’ to them as individuals like a better range of services or offers or just better and more personalised service.