Loyalty Card

How loyalty schemes can help encourage engagement

Tesco has announced it is making even more changes to the popular Clubcard loyalty scheme to focus more on rewarding customer loyalty rather than just using it as another marketing tool. CEO Dave Lewis explains that Tesco is aiming to further increase its brand perception and engagement to compete with other leading brands in the market, saying that contactless cards were just the beginning and that consumers “should expect more” in the upcoming months. Tesco recently reported an increase in customer satisfaction over the past three years and Dave Lewis revealed that the Clubcard scheme is considered key to continue this growth. This is a good example of an organisation valuing consumer loyalty and being prepared to invest in the area, but why is rewarding and understanding your members so important?

Drawing parallels with the membership sector

For membership organisations, increasing member engagement is key when trying to establish meaningful relationships with members. This will ultimately impact on their likelihood to renew and ideally encourage greater involvement with the organisation. One way in which brands attempt to do this is through loyalty schemes that reward their dedicated consumers for repeatedly interacting with and choosing to use them. Taking the Tesco Clubcard scheme for example, once individuals choose to become a member of this club, they receive a card which they can then collect points on each time they shop at Tesco. During the year, multiple surprise envelopes arrive at their front door; containing vouchers for the monetary value of points acquired. These can be spent in any Tesco store, allowing members to feel as if they are getting more for their money and thus presenting a more appealing service and encouraging continued (or increased) usage.

Measuring engagement

RbD recommends measuring member engagement through 4 key components; behavioural, cognitive, emotional and social characteristics. Measuring emotional characteristics of members is particularly important as positive feelings are critical in an individual’s decision whether to continue their relationship with an organisation. Loyalty schemes can play a role here, eliciting feelings of gratification and pride by gaining these rewards and points. In a sense, customers will feel as if they are being praised for their loyalty as a scheme member and thus keep coming back to experience more positive feelings of appreciation.

Measuring social characteristics involves identifying how connected members feel with an association and whether they feel bonded to a ‘community’ through their membership. Again, this is another way loyalty schemes can help to increase engagement since they allow individuals to feel part of something bigger as well as being more closely associated to the brand itself.  Receiving regular emails or letters with new rewards, discounts and offers keeps members connected whilst also allowing them to feel part of an exclusive community.

It’s interesting to perceive the different ways organisations measure and encourage engagement. Not only this, what is really interesting is that no matter whether you’re a small membership organisation with a few thousand members or a multinational corporate giant like Tesco, recognising how important it is to foster engagement is a critical first step on the journey to working out how best to encourage loyalty amongst your members.

 

Sources: https://www.marketingweek.com/2018/04/11/tesco-clubcard-changes/

This entry was posted in Membership, tagged Membership, Consumer, Shopping, Engagement, Member Behaviour and posted on May 22, 2018


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