Skip to Content

Boosting your brand’s success with loyalty programmes

As customers cut back on their spending make, loyalty programs provide a compelling incentive for them to remain loyal to a particular brand or retailer. By offering exclusive rewards, discounts, and personalised experiences, these programs help build stronger connections and encourage repeat purchases. In this challenging economic environment, brands and retailers that embrace loyalty programs are staying ahead of the competition and cultivating long-term customer loyalty.

Emily Elias Senior Consultant 20/09/2023

As the cost-of-living crisis continues to impact consumer spending ability, customers are cutting back on spending and changing their shopping behaviour. According to our recent Consumer Compass/ Grocery Eye survey in the UK, over half of people (51%) are reducing their non-essential and leisure spending to save money, while 41% are buying less food and making it last longer.

In response to these changes in behaviour, brands and retailers are seeking new ways to retain their customer base. One effective approach is the implementation of loyalty programmes. These programmes not only offer value for money to consumers but also allow retailers to foster loyalty by gaining a better understanding of their customers and providing personalised experiences.

What drives the usage and return of loyalty programmes?

Our research indicates that nearly half of respondents are attracted to instant financial rewards, such as earning money back through their spending. However, we also found that consumers are drawn to loyalty programmes for a variety of other potential benefits, suggesting that offering a diverse range of rewards is highly attractive. Indeed, successful loyalty programmes often provide instant monetary incentives while also incorporating more emotive “surprise and delight” rewards.

However, creating a loyalty programme strategy that genuinely drives loyalty can be challenging as shoppers tend to be fickle. Therefore, retailers have to find various ways to differentiate themselves through their offerings. For example, Sainsbury’s recently introduced Nectar prices offering instant money off on selected products, while Pret’s increased benefits available through it’s Club Pret subscription in August. By providing unique and appealing benefits, retailers can set themselves apart and establish a loyal customer base.


View this post on Instagram


A post shared by @pret

But how are loyalty programmes being used in reality?

Our UK Omnibus results show that of all the loyalty programmes that people are signed up to, a fifth are used once a year or less, which indicates that many loyalty programmes are still not hitting the mark.

With 25% of respondents stating that a sign-up discount itself is the main reason for signing up to a loyalty programme, it is clear that more needs to be done to invest in loyalty cards and understand what works for customers to drive long-term usage and loyalty.

How can brands and retailers benefit from loyalty programmes?

Loyalty programmes offer brands more than just immediate sales. These programs enable brands to gather comprehensive CRM data, enhancing their services, and securing long-term sales.

By utilising customer insights, brands can continually improve their offerings and build lasting relationships with their loyal customers who are key to achieving sustained success and driving growth in the competitive marketplace.

Overall, when loyalty programmes work well, they are a key tool in driving brand value, engagement, brand love, advocacy, and conversion. These are all vital in future engagement and increasing revenues, with the fundamental aim being to increase conversion and basket spend.

To learn more insights about how your brand can unlock the full power of loyalty programmes to drive long-term sales, download the full report below:

Knowledge centre

Read More
Agencies & Consultancies | Brand Development & Strategy | Consumer Brands | Eating & Drinking | FMCG | Loyalty & retention | Retail | Retail Strategy | Shopper behaviour | Thought leadership | Usage & Attitudes

Women in business

21/03/2024 - by Alketa Berzani