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Retail marketers need to look more closely at loyalty, warns DMA – and they need to ape Amazon, Apple and John Lewis

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Loyalty: there is more to it than just cards and points, says the DMA
Loyalty: there is more to it than just cards and points, says the DMA
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Retailers need to rethink loyalty – and Amazon, Apple and John Lewis are the ones to watch

Retail marketers are under-valuing a number of loyalty tactics – with consumers wanting more points to use and retailers wanting to offer more experiential things such as priority access.

 

According to the DMA’s latest research, ‘Customer Engagement 2019 – Marketers’ view’, which asked consumers and marketers for their opinions on the most effective loyalty/rewards programme tactics, marketers and consumers were split on which benefits generate greater loyalty.

 

Some 77% of consumers like being given points to use, but only 54% of marketers chose this type of reward as being the most effective. In fact, consumers were more enthusiastic about a range of benefits: priority access to sales (57% compared to 40% of marketers); exclusive member discounts (67% vs. 38%); and free gifts (71% vs. 33%).

 

Amazon named most engaging brand by marketers and consumers

Like businesses, marketers are well aware of the effect Amazon is having on the industry. One in ten (10%) named the ecommerce giant as the most engaging brand they had seen in the last 12 months. Although that fell slightly short of the 14% of consumers who rated Amazon the best and most engaging brand.

 

Other favourites cited by both marketers and consumers were: John Lewis (ranked third by both groups, named by 4% of each); Apple (4% of marketers, 2% of consumers); and Asda (3% of marketers, 1% of consumers).

 

There are some clear opportunities for marketers to tap into these preferences to better engage their loyal customers.

 

There was a 46 percentage point gap between customers who wanted easier visualisation of their points balance and marketers who thought this was effective, a 43 percentage point gap for offering location-based rewards, a 35 percentage point gap in the desire for personalised product emails and a 30-point difference for gamification.

 

Paying heed and responding to consumers’ needs and desires could make all the difference in boosting customer retention.

 

Scott Logie, Chair of the Customer Engagement Committee at the DMA and Customer Engagement Director at Read Group, explains: “Great customer engagement should result in loyalty. In turn, those returning customers want to be rewarded, and it’s clear from the results that a surprising number of marketers could be overlooking loyalty tactics. The report provides deep insight into the current state of customer engagement and much food for thought about the differences between what brands deem to be successful customer engagement strategies and what consumers say engages them – or not.”

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