{"id":1313,"date":"2020-11-23T13:47:45","date_gmt":"2020-11-23T12:47:45","guid":{"rendered":"http:\/\/i360.trejka05.pl\/?p=1313"},"modified":"2021-05-17T17:30:25","modified_gmt":"2021-05-17T15:30:25","slug":"6-costly-mistakes-made-by-loyalty-scheme-organisers","status":"publish","type":"post","link":"https:\/\/i360.com.pl\/en\/6-kosztownych-bledow-ktore-popelniaja-organizatorzy-programow-lojalnosciowych\/","title":{"rendered":"6 costly mistakes made by loyalty scheme organisers"},"content":{"rendered":"

Analysis of experiences from 2009 to 2020.<\/strong><\/p>\r\n\r\n\r\n\r\n

Loyalty schemes<\/a> They are extremely popular. According to an analysis carried out by specialists at i360, there are over 120 loyalty schemes operating on the Polish market which, in the long term, reward customers for their repeat purchases. Some of them also reward customers for meeting other conditions, which are not always necessarily linked to purchasing goods at specified points of sale.<\/p>\r\n

6 costly mistakes made by loyalty scheme organisers<\/strong><\/h2>\r\n\r\n\r\n\r\n

The benefits to be gained from loyalty schemes usually take the form of material, financial, preferential or experiential rewards. Every year, the ARC Rynek i Opinia research institute conducts surveys focusing on analysing the attitudes and behaviour of adult Poles taking part in such programmes. The findings show that, out of over a hundred schemes of this type, only four can boast a participation rate of more than 10% of all registered customers. A participation rate of 3% is already observed in nine cases.<\/p>\r\n\r\n\r\n\r\n

But what about the rest of the programmes? One might assume that they are designed to attract only a small, loyal group of buyers, as they are guided by the principle of \u201equality over quantity\u201d. It is wiser, however, to look at the situation more objectively \u2013 the organisers have most likely made a number of mistakes and put together a poorly structured programme, which is why only a few people decided to take part.<\/p>\r\n\r\n\r\n\r\n

It is also important to bear in mind that customers enrolled in the scheme often simply do not remember that they are taking part in it. The research cited is based on self-reports \u2013 the accuracy of the responses was not verified in any way. There is therefore a strong possibility that some people did not mention a particular scheme simply because they had forgotten about it. This is significant because, whilst a lack of participants merely means a lack of benefits, inactive participants represent a tangible financial loss. Recruiting them, issuing proof of participation (e.g. a card) or even simply communicating with them all involve expenditure, yet yield no results.<\/p>\r\n\r\n\r\n\r\n

Rushing, the desire to roll out a programme at any cost, or trying to catch up with the competition usually lead to failure. This e-book has been produced precisely because the specialists at i360 have been working on loyalty programmes (B2C) and incentive schemes (B2B) for over 20 years. As a result, the company has already been awarded first prize several times in the integrated marketing agency rankings in the category \u201eAbility to organise effective loyalty programmes\u201d.<\/p>\r\n\r\n\r\n\r\n

i360 has been awarded certification to the International Standard: \u201eISO\/IEC 27001:2013 Information technology \u2013 Security techniques \u2013 Information security management systems \u2013 Requirements\u201d, as the first company on the Polish market for loyalty and incentive programme providers. This proves that our services meet the highest security standards.<\/p>\r\n\r\n\r\n\r\n

The list set out below does not cover all the mistakes made by loyalty scheme organisers, but these are the most common and frequently recurring examples. As mentioned earlier, all the data below is derived from an analysis of over 120 consumer programmes operating on the Polish market.<\/p>\r\n\r\n\r\n\r\n

Mistake 1. Failure to differentiate one\u2019s own market offering<\/strong><\/p>\r\n\r\n\r\n\r\n

Jack Trout\u2019s famous quote \u2013 \u201eDifferentiate or die\u201d \u2013 should be familiar to all marketing professionals. However, a preliminary analysis of Polish loyalty schemes suggests that this is not really the case. Even simple tests involving swapping rewards, logos and names show that end consumers do not particularly distinguish between the various schemes. This demonstrates their similarity to such an extent that it is impossible to identify anything distinctive that would help one recognise a particular programme at a glance.<\/p>\r\n\r\n\r\n\r\n

This method can also be used to check the rules of participation. Unfortunately, the conclusions are similar. We can observe something like commodification<\/em> loyalty schemes. Customers can only tell the offers apart in a few cases, as the organisers have failed to provide unique offers that buyers might remember.<\/p>\r\n\r\n\r\n\r\n

Over 95% active programmes operate on a points-based system (points are awarded for every purchase and can be exchanged for rewards from the catalogue \u2013 usually, these are 90% the same as those offered by competitors) or a discount scheme (a loyalty card guaranteeing discounts which, in practice, can also be found in promotional leaflets, even if you are not a member).<\/p>\r\n\r\n\r\n\r\n

Over 19 years ago, the creators of the first Polish loyalty schemes (Shell SMART and Orlen VITAY) laid, as it were, the foundations of this market, as most other companies simply copied and adapted their original principles. Proof of this can be seen, for example, in the way participation in the programme is verified. For some reason, most organisers still use bulky, non-eco-friendly plastic cards, which are, in reality, completely unnecessary.<\/p>\r\n\r\n\r\n\r\n

If you were to sign up for every loyalty scheme, you could end up with a huge number of them. This makes them difficult to use, as at some point they no longer fit in your wallet. In most programmes, you can already log in using your surname, a mobile app or your phone number, so what\u2019s the point of a physical card? There are plenty of such absurdities on the Polish loyalty programme market. One of the funniest examples is a certain mustard manufacturer that offers points which can be exchanged for rewards.<\/p>\r\n\r\n\r\n\r\n

Mistake 2. A misunderstanding of the concept of loyalty and a lack of clearly defined programme objectives<\/strong><\/p>\r\n\r\n\r\n\r\n

Only a handful of Polish loyalty scheme operators truly understand what genuine customer loyalty is all about. Most treat customers without realising what their needs are or what makes them return to the shop. As for points, their average conversion rate incentivisation<\/em> does not exceed 2% of the product\u2019s price. You have to collect them over a long period of time to receive reasonably satisfactory rewards or discounts, which in practice only damage the brand\u2019s image. All this is merely a pale substitute for what customers actually expect.<\/p>\r\n\r\n\r\n\r\n

What\u2019s more, incentivisation<\/em>\u00a0A scheme operated on these terms assumes that points and discounts fulfil the need for recognition of brand loyalty in the same way that a customer fulfils their own needs during a transaction (e.g. by filling up their car because they are on a journey, or by buying bread rolls for breakfast).<\/p>\r\n\r\n\r\n\r\n

In practice, obtaining a discount on goods such as low-involvement purchase<\/em>\u00a0It\u2019s already forgotten by the next day. And by the time you leave the shop, you\u2019ve already forgotten that new points have been added to your virtual account. It\u2019s worth thinking about this \u2013 who knows what their current points balance is in the loyalty scheme they\u2019re part of? Only a handful would be able to give an approximate figure. Only those who belong to the 0.1% group of truly committed participants \u2013 who usually do this out of passion or as part of their profession \u2013 would be able to do so.<\/p>\r\n\r\n\r\n\r\n

The organisers confuse loyalty with repeat purchases, without any criteria or requirements. Such considerations raise questions about the objectives set for their loyalty programmes, as well as the role they assign to them in the communication of the brands managed by the company. If they focus primarily on sales growth, this is a mistake. There are far more effective tools that can deliver better results, and in a shorter timeframe too.<\/p>\r\n\r\n\r\n\r\n

When analysing loyalty programme offerings on the Polish market, it is also worth asking what role a given scheme is intended to fulfil, or simply what purpose the programme is designed to serve. Even after reading the terms and conditions of all the options available in Poland and familiarising oneself with their marketing communications, it is difficult to find any clear answers.<\/p>\r\n\r\n\r\n\r\n

Mistake 3. Failure to make use of new media and innovative communication tools<\/strong><\/p>\r\n\r\n\r\n\r\n

Most Polish loyalty schemes are still based on integrating the till with the loyalty system. Some even still rely on cardboard cards or booklets on which customers collect stamps, holograms or stickers. Only a handful of organisers make use of mobile apps, social media or personalised direct communication.<\/p>\r\n\r\n\r\n\r\n

Most modern companies offer access to a website secured by a username and password that you need to remember. This allows you to check your points balance \u2013 which, due to the fragmentation of the market, is usually just short of a reward. It is hard not to notice that the organisers have no concept of maintaining a regular dialogue with customers, especially those who shop only occasionally. At the CEE Loyalty Summit in Krak\u00f3w, one of the most frequently repeated points was the observation that, in practice, loyalty schemes are not very effective at increasing the frequency of purchases.<\/p>\r\n\r\n\r\n\r\n

This is most likely because the current loyalty schemes only reward loyal customers, who are, after all, already loyal. The organisers are failing to reach the target group where the greatest growth can be achieved \u2013 people with purchasing power who have so far preferred the competition or have not yet become attached to any particular brand and shop in various places.<\/p>\r\n\r\n\r\n\r\n

A lack of a foundation \u2013 that is, a strategy for managing the end-customer segment. This is the very ABC of relationship marketing, and yet it is not being followed. Occasional transactions do not include a thank-you and do not offer any incentives, and so do not encourage repeat visits.<\/p>\r\n\r\n\r\n\r\n

Mistake 4. Reluctance to form coalitions and multi-party partnerships<\/strong><\/p>\r\n\r\n\r\n\r\n

It is, in practice, impossible for more than 100 programmes aimed at end consumers to run simultaneously over a prolonged period. With today\u2019s hectic lifestyle, the average person is only able to maintain close relationships with a maximum of 5\u201310 people outside their immediate family, which is why it is hard to believe that there is any point in having such a large number of loyalty schemes.<\/p>\r\n\r\n\r\n\r\n

The state of multi-partner solutions demonstrates that a misunderstanding of the concept of coalition-building has undermined the chances of integrating the Polish market. i360 also has first-hand experience of the failed attempt to transfer a concept from the US market (Points.com) to our country. It turns out that the greatest barriers stem from fears of losing integrity, the need to share profits, or even the loss of jobs.<\/p>\r\n\r\n\r\n\r\n

Attempting to maintain more than 120 programmes only results in the majority of them having a participation level of less than 1%. During many projects re-engineering<\/em> Although the trend towards closing down unprofitable programmes is evident, it is clear that many organisers are bold visionaries. The rest, of their own volition, remain doomed to status quo<\/em>.<\/p>\r\n\r\n\r\n\r\n

Error 5. Lifetime membership and the option to join multiple times<\/strong><\/p>\r\n\r\n\r\n\r\n

The size of the participant database is one of the parameters used to assess the programme\u2019s effectiveness. There is a widespread belief that the larger it is, the better the programme. Since hundreds of thousands of participants have joined it, there must be something to it. In reality, however, there is probably only one loyalty programme on the market that systematically removes inactive customers from its database, after first encouraging them to use the programme again.<\/p>\r\n\r\n\r\n\r\n

On the other hand, in many cases, the very nature of participation in the scheme is such that it allows points to be collected without the need to register. Cards are usually issued without any actual checks, meaning that a customer may hold several of them. The pinnacle of this phenomenon can be seen in a situation where one multi-partner programme led to each of the main partners issuing cards bearing their own logo.<\/p>\r\n\r\n\r\n\r\n

At that time, customers\u2019 wallets often contained several cards from the same scheme, each bearing the logos of all the partners. Not only did this generate unnecessary costs, but it also led to confusion over how the rules were to be interpreted. Participants were unsure whether they should collect points on a single card or on each individual one.\u00a0<\/p>\r\n\r\n\r\n\r\n

What is more, the organisers are usually unable to encourage inactive participants to return in any way. As I took part in all the programmes studied, it was, of course, impossible to remain active in each of them.<\/p>\r\n\r\n\r\n\r\n

It is surprising that messages such as \u201ecome and shop with us\u201d, \u201ecome back to us\u201d or \u201etell us why you\u2019re no longer active\u201d are almost unheard of. Nor are special promotional offers used, which could effectively encourage customers to return. At i360, we advocate lowering the barriers to entry for new participants. It makes more sense to postpone the requirement to provide personal data until the reward is issued. Customers are then more willing to provide it, as they stand to gain a tangible benefit. Many people are put off when, whilst trying to earn their first point, they are asked to provide too much information.<\/p>\r\n\r\n\r\n\r\n

However, such a strategy must be combined with active analysis of the database. It is necessary to monitor the composition of participants in terms of their activities, send them targeted messages, regularly remove inactive customers, and so on.<\/p>\r\n\r\n\r\n\r\n

Mistake 6. Failure to analyse and draw conclusions<\/strong><\/p>\r\n\r\n\r\n\r\n

As the name suggests, a loyalty programme should, first and foremost, encourage customers to become loyal to a particular brand. Thanks to today\u2019s technology, it also serves as an excellent source of customer insights. In a sense, this is a side effect of running the programme, but it proves to be extremely useful. To collect useful data effectively, it is essential to focus on establishing an appropriate information flow process and to ensure that the necessary technologies are in place to collect data from multiple sources. This also requires expertise and the right tools to enable thorough analysis. This makes it possible to draw interesting conclusions and effectively influence purchasing behaviour.<\/p>\r\n\r\n\r\n\r\n

It is worth mentioning, in this context, the popular term \u201eBig Data\u201d, which for many marketers is an almost daunting concept. The most important aspect of this phenomenon is not that it is \u201eBig\u201d (in terms of server farms and incredibly powerful technology). What matters most is the ability to analyse data gathered from many different sources in order to gain insights and take appropriate action.<\/p>\r\n\r\n\r\n\r\n

Most loyalty schemes on the Polish market should consider analysing even simple correlations between purchase frequency, basket value, the types of products purchased, the date or even the weather. This allows for better tailoring of communications with participants. The more a message is tailored to the recipient\u2019s needs, the more effective it is.<\/p>\r\n\r\n\r\n\r\n

The consequences of making the above mistakes<\/strong><\/p>\r\n\r\n\r\n\r\n

The description of the seven mistakes above, of course, only touches on this issue to a limited extent. However, the examples given are among the most common problems plaguing Polish organisers. The most noticeable and tangible consequence of these shortcomings is lost profit. Had the allocated budget been invested properly, these projects could have yielded tangible returns.<\/p>\r\n\r\n\r\n\r\n

What is more, actions of this kind lead to the aforementioned commodification<\/em> the market, that is, the tendency for all programmes to become increasingly similar. It should be noted, however, that this term is used in an attempt to eloquently describe the fact that all available options are becoming a homogeneous mishmash that is indistinguishable not only to customers, but even to the organisers themselves.<\/p>\r\n\r\n\r\n\r\n

This situation is highly disadvantageous for the end consumers themselves. The lack of variety in the market simply overwhelms them. All the available options are very similar to one another, so they do not provide any real competitive advantage for any company. Undoubtedly, the organisers also lose out as a result. They themselves reduce the effectiveness of the marketing tools they use by employing them incorrectly. As a result, they also expose themselves to unfavourable reviews from dissatisfied customers.<\/p>\r\n\r\n\r\n\r\n

If you have any questions<\/strong><\/p>\r\n\r\n\r\n\r\n

The loyalty market experts at i360 will be happy to answer any questions you may have. We also provide comprehensive advice on which solutions to implement to avoid the mistakes mentioned, and on how to minimise the consequences of any oversights that have already occurred.<\/p>\r\n\r\n\r\n\r\n

If you are planning to make any changes to your loyalty scheme and wish to ensure that these are carried out in accordance with the law and based on comprehensive market knowledge and experience, please do not hesitate to contact i360.<\/p>","protected":false},"excerpt":{"rendered":"

Analiza do\u015bwiadcze\u0144 2009 r.-2020 r. Programy lojalno\u015bciowe s\u0105 niezwykle popularne. Wed\u0142ug analizy przeprowadzonej przez specjalist\u00f3w z i360,\u00a0na polskim rynku dzia\u0142a ponad 120 akcji, kt\u00f3re w d\u0142ugookresowym wymiarze nagradzaj\u0105 klient\u00f3w za powtarzalno\u015b\u0107 w wyborach zakupowych. Niekt\u00f3re z nich premiuj\u0105 r\u00f3wnie\u017c spe\u0142nianie innych warunk\u00f3w, czasami nawet niekoniecznie zwi\u0105zanych z nabywaniem d\u00f3br we wskazanych punktach sprzeda\u017cy. 6 kosztownych…<\/p>","protected":false},"author":2,"featured_media":1314,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[33],"tags":[],"class_list":["post-1313","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-programy-lojalnosciowe"],"taxonomy_info":{"category":[{"value":33,"label":"Programy lojalno\u015bciowe"}]},"featured_image_src_large":["https:\/\/i360.com.pl\/wp-content\/uploads\/2020\/11\/6-kosztownych-ble\u0328do\u0301w-organizatoro\u0301w-programo\u0301w-lojalnos\u0301ciowych.jpg",640,360,false],"author_info":{"display_name":"Tomasz Makaruk","author_link":"https:\/\/i360.com.pl\/en\/author\/autor\/"},"comment_info":0,"category_info":[{"term_id":33,"name":"Programy lojalno\u015bciowe","slug":"programy-lojalnosciowe","term_group":0,"term_taxonomy_id":33,"taxonomy":"category","description":"","parent":0,"count":24,"filter":"raw","term_order":"0","cat_ID":33,"category_count":24,"category_description":"","cat_name":"Programy lojalno\u015bciowe","category_nicename":"programy-lojalnosciowe","category_parent":0}],"tag_info":false,"_links":{"self":[{"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/posts\/1313","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/comments?post=1313"}],"version-history":[{"count":0,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/posts\/1313\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/media\/1314"}],"wp:attachment":[{"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/media?parent=1313"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/categories?post=1313"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/tags?post=1313"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}