“Do customers’ loyalty is one of the

 “Do you have the loyalty card?” A question so trivial but soroutine ..

. Loyalty cards are now part of our shopping habits. Marketingweapons for retailers, good deals for consumers, everyone benefits.

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Tofully understand the role of a loyalty card, you must make a loyalty programwith two distinct goals:Forthe merchant: it is about retaining a customer by rewarding customers who comeback several times.Forthe customer: it’s about seeing your loyalty rewarded by a discount, a freeproduct, a gift, benefits…Wemust not forget that customers’ loyalty is one of the keys to the success ofany business. Indeed, the loyal customer can bring a regular turnover, but can alsobe the ambassador of the shop by convincing new customers.A loyalty program can be an opportunity to create a customer database.Before giving a loyalty card, you can ask your interested customers to fill outa membership form -sometimes firms sell these customer files to other companiesin exchange of money or other information. Thiscould be an opportunity for you to know their e-mail address or their phonenumber. What purpose? Simply to be able to launch SMS campaigns or to create anewsletter: new ways to remind your customers of your existence, and encouragethem to buy! In addition, it offers data such as the gender, the age or thehabit of the customer enabling therefore the firm to create personalizedoffers.

The consumer therefore feels unique and considered and this offers avery positive image of the firm. Let’sapply this to a concrete example; Tesco’s framework on customer services. Byknowing its customer needs very deeply, and with a clear understanding of howto attract the others, Tesco kept its leading position.

Tesco’s customerservices started in 1995 with the creation of its Clubcard, which becamerapidly famous.Tesco’sClubcard is based on a system of point -and on small rebates- for each purchasemade. The card highlights a clear success with 16.5 millions of active users.

(Christie,2017).Itcreated a massive customer database – which helped the company understandingthe general but above all the individual characteristics of each of itscustomers. Itbuilt a real community, deeply sensitive to Tesco’s offers, with vouchers onspecific products. This system allows Tesco to guide their customers fromtargeted products, to new quality range items or services, giving them thedirection of what they should like in consideration of their usual baskets.(Cluster,2017)Onthe other side, a customer is totally free to sign up or not to a loyalty card.Customers, when subscribing, mainly see the advantages of a loyalty card. It offersthem reductions, cash back, discount and privileged accesses to private sells. Inexchange of their loyalty they receive bonus and compensation for not going tothe competitors’.

As explained before, theloyalty card can include benefits that are independent of actual loyalty, forexample, priority access to checkouts, archiving of warranty vouchers, homeinsurance on various products, assistance. The merchant’s reward can be a gift(product or service offered) or a monetary benefit (purchase order, reduction,refund …).However most of the time,customers are not aware of how their data are collected and used. More and moreconsumers’ protection groups are created in order to preserve theirinformation.

   

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