Magazine article Marketing

Opinion: The Marketing Society Forum - Could Digital Technology Breathe New Life into Loyalty Schemes?

Magazine article Marketing

Opinion: The Marketing Society Forum - Could Digital Technology Breathe New Life into Loyalty Schemes?

Article excerpt

The marketing director of Nectar has raised the possibility that it could use mobile technology to send cardholders targeted offers based on their location within retail partners' premises.


Unfortunately, the answer to this question is not a clear-cut 'yes' just yet.

The proliferation of loyalty schemes over the past decade means brands have had to work much harder to capture the interest of consumers Offline schemes have all moved online - the ability to personalise with little cost has created new levels of relevance and greater frequency of communication.

Digital has also brought greater interaction and instant gratification - both powerful levers in loyalty schemes.

However, this has come at a cost: irritation at intrusive emails; having to remember multiple passwords and user-names; and lack of human support has led many people to let those loyalty schemes with which they had a 'passive' relationship fall by the wayside.

Less has become more. Digital has enabled such schemes to have a deeper, richer engagement with consumers, but only where the consumer desires it.

So, for some loyalty schemes, digital has sounded the death knell; others have emerged stronger than ever, and for a few it's the only reason they exist.


As in other areas of life, digital channels are making a big impact on loyalty programmes. Nectar has 1m online users, Tesco's barcodes turn phones into virtual Clubcards and British Airways' Executive Club membership is managed online.

For 'new life', rather than channel add-ons to existing capabilities, it's digital's unique capability to engage and connect customers that's key, creating fresh ways to cement the loyalty bond.

This has been highly effective for some schemes. Take Boots' offering WebMD online medical advice to 15m Advantage Card members, or Best Buy creating exclusive online content.

Digital should be either useful or fun. Nectar has 2800 followers on Twitter and 2200 on Facebook; numbers for its primary earn/spend partner Sainsbury's are more impressive: 7100 and 48,000.

Usefulness and fun play their part in the disparity. Those getting it right are using digital for its strengths in deploying content that genuinely inspires or informs, not simply adding channel noise.


Digital is merely one way in which customers might engage with a brand, as opposed to opening mail, walking into a store or picking up the phone. …

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