What makes a successful loyalty programme?

Building customer loyalty can help drive success in the grocery retail market, but how do retailers build loyalty in an ever-changing landscape?

In our recent report – Defining Loyalty: How Customer First loyalty can drive success in retail – we took an in-depth look at fostering loyalty in a post-pandemic world.

'The days of all customers using an in-store loyalty card to have access to the same massive benefits are long gone. Accelerated by the pandemic, customer habits are changing, with increasing numbers shopping online. As a result, retailers must provide seamless digital experiences that match their in-store experience. While this can prove challenging, grocery retailers now have more insightful data about their audiences than ever before, enabling them to provide highly personalised experiences that help engage and build loyalty in a truly authentic way.

In our last article, we looked at key loyalty trends and ways in which grocery retailers can foster loyalty. One of the trends we identified was loyalty programmes, which can include a mix of features that help reward, excite and attract customers. However, today’s loyalty programmes require intelligent use of data to provide targeted benefits and rewards tailored to individual customers and the point they are at on their shopping journey. The key to loyalty programmes is to engage customers in the day-to-day business of shopping with the brand rather than using it as a bolt-on.

But what makes a successful loyalty programme? Let’s take a look at some of the key findings outlined in our report.

1. Using data to personalise

2. Benefits beyond points

1. Using data to personalise

Personalisation is central to driving engagement and fostering loyalty. By truly understanding the needs and preferences of customers, grocery retailers can create loyalty programmes that are more sophisticated and profitable than ever before.

Grocery retailers have access to vast amounts of data regarding their customers’ purchasing habits, offering granular insights into individual shoppers. This granular data enables retailers to provide highly personalised loyalty programmes.

Technical constraints would have made it highly complex to utilise this granular level data to deliver tailored experiences a decade or so. However, today’s intelligent technology and strategic insights can ensure grocery retailers can harness the power of this data to deliver personalised loyalty programmes that meet individual customer needs.

2. Benefits beyond points

Loyalty programmes used to be focused on a ‘points-only’ reward-based system, but grocery retailers have increasingly adopted a blended approach that goes beyond just points by providing access to enhanced services and discounts. These enhanced benefits help to attract new customers and reinforce engagement with existing shoppers, and increase the number of positive interactions between customer and retailer which were formerly concentrated in a few reward redemption moments in a year.

Just some of the benefits can include discounts for members or points-based rewards, providing exclusive content or access to members-only experiences, and offering enhanced levels of convenience, such as free or faster shipping, digital receipts, curbside pickup, and access to scan and go.

It’s essential that these benefits deliver perceived value to the customer, particularly for subscription loyalty programmes, and that they are relevant to a retailer’s business and brand strategy.

One example of a grocery retailer that has transformed their loyalty programme and boosted customer engagement is Conglomerate Central Group Thailand. The conglomerate switched from a largely paper-based, one card system, to an intuitive centralised app. The app focuses on tactical personalisation, with tiered memberships offering a range of member discounts and rewards. Finally, integrated payments via a wallet ensure a seamless customer experience from the first digital touchpoint to the last.

For more information on loyalty programmes and how fostering loyalty can drive success in retail, download the full report here.