We Know Better, But Still We Love Loyalty Cards


As we've been discussing on the message board on yesterday's post, Color Me Stupid About Customer Loyalty, giving up our personal data to participate in a customer loyalty card program often isn't the wisest move.

Unfortunately, we're not always at our smartest when in the throes of shopping.

As I mentioned in my blog, the other night I coughed up some personal information to get a loyalty card from a beauty retailer. I'd like to think the request caught me at a weak moment, when I was too tired to think rationally. But truth be told, I have a number of such cards in my wallet -- a couple from nearby grocery stores and others from specialty retailers. Will I ever wise up?

I'd like to be able answer that question with a definitive "YES!" But if I'm being honest, a "probably not" is more likely the answer -- especially since part of me thinks that the damage already has been done. I guess I'll take solace in the fact that I'm not alone. Recent research from SAS (this site's sponsor) and Conlumino, a retail research agency and consulting firm, tells me so.

For the study, "Retail Loyalty and the Consumer," SAS and Conlumino surveyed 2,109 consumers and 100 UK retailers. What they learned is as apropos to what's happening in the US as it is globally, as well as across industries, Wilson Raj, global marketing director of customer intelligence at SAS, told me in a phone interview. And that's this: Just shy of 95 percent of the consumers surveyed said they own at least one loyalty card, with the greatest number of respondents -- 23.4 percent -- owning three.

This isn't a case of sign up and forget, either. At survey time, most consumers said they'd used a loyalty card within the last few days. More than 25 percent had even used one that very day, and 88.2 percent said they use them regularly.

Any shopper knows that retail loyalty cards are ubiquitous, but just how popular they are and how widely used took Neil Saunders, managing director at Conlumino, by surprise. He attributed the high usage rates, in part, to the continued weak economy. "They'll give up their data, and share some information, to get money off," he told me in a separate interview.

What consumers most want out of a loyalty program is pretty simple, the survey showed. They want coupons, those no-brainer ways of saving money. Nearly three quarters of respondents identified coupons as most important to them. On-the-spot discounts and special offers for use at a later date also bubbled to the top of the list -- although at 41.5 percent and 36.4 percent, respectively, a far cry from the 74.1 percent of love going toward coupons.

The survey clearly showed that people have become so used to loyalty card programs that participation has become a non-issue for many of them, Saunders said. Nearly half of respondents -- 46.8 percent -- showed no concern whatsoever about signing up for a loyalty card. Those who did have some niggling doubts broke down along these lines:

  • 34.4 percent worry most about retailers sharing personal information with other companies
  • 27.4 percent fret over receiving unsolicited marketing material or advertising
  • 23.4 percent don't like not knowing how their purchase information might be used
  • 18.7 percent think retailers might know too much about their purchases
  • 14.1 percent worry that signing up will mean they will receive too many letters or emails from the retailer

To this latter point, consider, too, that the research shows nearly 40 percent of respondents are OK with opting in to receive marketing material -- but not via text message. Only two percent said they're ready to receive marketing promo via that most modern of means, but give them a year and we might see this change considerably. Thirty percent of the consumers surveyed admitted that they'd be "fairly or highly likely to take advantage of a relevant offer direct to a mobile phone while they’re in store."

Shoppers want deals, and figure that trading off some basic facts about themselves is worth getting that 20 percent off coupon to buy themselves a little something special on their birthdays. The promise of value pricing, it seems, might not carry enough sway over consumers who have come to associate discounts with loyalty cards.

So do share -- how many loyalty cards do you have in your wallet? And what's been your criteria for signing up for one? Let's talk about this on the message board below... but first, I'm running out for a lunchtime errand. I need some bread and butter, and since I'm just $43.12 shy of reaching the $650 spending target that's gonna get me a one percent reward discount for my qualified purchases, maybe I'll pick up a few other items as well!

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Beth Schultz, Editor in Chief

Beth Schultz has more than two decades of experience as an IT writer and editor.  Most recently, she brought her expertise to bear writing thought-provoking editorial and marketing materials on a variety of technology topics for leading IT publications and industry players.  Previously, she oversaw multimedia content development, writing and editing for special feature packages at Network World. In particular, she focused on advanced IT technology and its impact on business users and in so doing became a thought leader on the revolutionary changes remaking the corporate datacenter and enterprise IT architecture. Beth has a keen ability to identify business and technology trends, developing expertise through in-depth analysis and early adopter case studies. Over the years, she has earned more than a dozen national and regional editorial excellence awards for special issues from American Business Media, American Society of Business Press Editors, Folio.net, and others.

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Hate them
  • 9/25/2013 2:12:14 PM
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Personally I hate these cards, not because I give up info, but because they take up too much space in my wallet. I am looking forward to a digital verson I can keep on my phone and the shop can just scan the QR code. 

Re: Hate them
  • 9/25/2013 2:47:52 PM
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I agree. CVS, for instance, will let you give a phone number instead of your card - but you can't access the instore coupons (in a kiosk) without the card. Very frustrating.

Re: Hate them
  • 9/25/2013 2:49:37 PM
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My objection at CVS are those mile-long receipts that using a loyalty card generates. Why can't the offers just be stored with your account and accessed automatically when you check out?

Re: Hate them
  • 9/25/2013 2:54:50 PM
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@TalkerZ that's been a point of contention for a long time. In the past, they have said, CVS  has claimed that customers like having the paper coupons, but now they have finally agreed to shorten them 25%.see http://www.bostonglobe.com/business/2013/08/30/long-cvs-receipts-spark-social-media-sensation/VzQeVzNmBB3ECqy6vQtj1N/story.html) They have recently started emailing customers, and so they've been trying to get more email addresses from people coming into the store. I heard some cashiers discussing how many they managed to get that day. Perhaps they were promised some kind of incentive payment for it. 

Re: Hate them
  • 9/26/2013 7:37:14 AM
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For the stores that allow you to get a loyalty card/keyring tag with just a phone number, pharmacies and grocery stores for example try using your area code and 867-5309.  I've used it many times to create cards at local businesses and tell friends who don't want to go through the process at the register to just use that number.   I've been telling friends this trick for about a decade and have never had anyone tell me that it wasn't accepted.

Re: Hate them
  • 9/26/2013 7:48:24 AM
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I like the privacy aspect of using this number, but then wouldn't you always need your loyalty card on hand, rather than being able to key in your phone number at POS, to have your points accrue?

Re: Hate them
  • 9/25/2013 3:15:20 PM
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Ah, but the ones I use most often -- for the grocery store -- don't require the physical card in hand. All you have to do is enter your phone number at the point-of-sale system. Alternatively, some stores offer the cards in mini versions you can slip onto a keychain. Those can come in handy, too.

Re: Hate them
  • 9/25/2013 11:21:27 PM
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Hmm... let's make that list of loyalty cards. I have a few I like to use. I tend to decline signing up for new programs. Walgreen's is the newest program I joined.

Walgreen's Balance Rewards - I noticed retail prices on some items spike in the last two months. I blame the loyalty promotions.

GameStop - We seem to only buy used video games (a couple times a year). Buy 2, Get 1 free covers that. The cost of the pro card is easily saved in one trip.

MyCokeRewards - I've been a member since 2007 and gotten magazine subscriptions and t-shirts.

Carino's Pasta Points - I like getting free food with this program.

Papa John's pizza rewards - more free food here 

 

Re: Hate them
  • 9/26/2013 7:20:25 AM
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Besides my grocery store cards (Dominick's & Mariano's), I really like the Target red debit card, with an automatic 5 percent off purchases. It's nice knowing that I'm getting a slight savings on anything I buy there, since I'd most likely be buying it there anyways. I also like programs that provide free shipping, as does the red card, too.

Re: Hate them
  • 9/26/2013 12:28:35 PM
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@Beth, 

Dont worry , the phone will be backed up to the cloud ;-) 

and I also had the target Red card, I liked the 5% savings on everything I would by. It also gave me an excuse to buy a pretzel on my way out every time. ;-) why not, I saved 5% on everything else and I will get another 5% off on that ever so yummmy pretzel. lol

Re: Hate them
  • 9/26/2013 2:51:34 PM
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Just another way of collecting "Big Data" without ever giving the customer a "real incentive" for using it.

Re: Hate them
  • 9/27/2013 1:33:49 AM
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@michaeljackson, 

I just assume that everything a retailer do is to captuer data and use it to sell me more things, so that doesnt bother me. 

Re: Hate them
  • 9/28/2013 8:35:45 PM
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True point - plus the main objective is making that data work effectively through analysis.  Collection means nothing without the proper investment, and right now that nvest is still a struggle, given the flack about Big Data. Not against it, but many execs are hesistant to invest in people and resources, or to organize themselves to make a difference with Big Data.

Re: Hate them
  • 9/29/2013 2:58:48 PM
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Pierre, you are absolutely correct. Data collection is merely the first step of many and the raw data is meaningless. I suppose that many executives don't want to appear left out of the big data push so they at least collect data until they can develop a plan. In the void!

Re: Hate them
  • 9/29/2013 10:09:06 PM
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Rbaz, one add to that thought - if they wait too long, the data's value gets lost. I still see too many businesses being cautious for minor reasons.

Re: Hate them
  • 9/30/2013 1:08:59 AM
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Pierre, delays caused by being cautious is a sign of the lack of a plan or overall strategy, which in turn signals the lack of commitment. Half hearted approach is a blueprint for failure.

Re: Hate them
  • 9/27/2013 11:41:14 AM
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There's a Starbuck's in my local Target. But, dang, I don't think the 5% discount applies there. 

Re: Hate them
  • 9/27/2013 12:51:09 PM
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That is a good question, It works at the snack bar where they have the pretzels, but I never tried at one of the in-store Starbucks. Let me know if it works!!!!

Re: Hate them
  • 9/27/2013 11:01:52 PM
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@beth it does apply! I was sent to checkout at Starbucks when many lines were full. My receipt said Target and I scanned my card on a target card scanner.

Re: Hate them
  • 9/30/2013 8:11:02 AM
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@tinym, interesting. Did you buy a latte while you were at it? I don't recall the scanner at the Starbuck's being a Target scanner at the store I frequent. But I'll have to look next time I'm there. I also can't imagine a situation where I am that would have the Target lanes full and not the Starbuck's counter, too. Occasionally I am tempted to get a coffee after shopping, but the lines there usually serve to make me think twice about that -- and skip it. 

Re: Hate them
  • 9/30/2013 9:05:03 AM
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@beth funny thing... there's a free standing Starbucks across the street from this Target store so the lines are usually very reasonable.

Re: Hate them
  • 9/28/2013 8:26:10 PM
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Beth, that kind of selectivity may be standard practices with some discount programs. There's a BP near me that is part of a truck stop - The Standard BP discount card I have can not be used at the pump dispite being BP gas. 

Re: Hate them
  • 9/26/2013 11:22:28 PM
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@Beth I have a red card too but haven't used it for discounts in a long time. I wish Target would get on board with a regular loyalty card. I tend to forget to pay the card on time so it's easier for me just to keep the balance at zero. I know they have a debit card program that tracks purchases through your debit card to give you discounts but I don't want to sign up for that one.

Re: Hate them
  • 9/27/2013 10:42:38 AM
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I'd finally signed up for one because of the debit option -- since I was always paying with my bank debit card anyways, I figured I might as well get the 5% discount. But oh do I get mad at myself when I forget to pay with the red card!

Re: Hate them
  • 9/26/2013 3:42:10 AM
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@Beth, 

I dislike the keychain version of the cards just as much. the realestate in my pockets is at a premium. I like to keep as few keys on my key ring as possible. normally just two, and I am working on dropping that number to just one. ;-) soon enough I will just have to carry my phone, or so I hope. 

Re: Hate them
  • 9/26/2013 7:11:12 AM
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So let's hope you never lose that phone!

The rich get richer
  • 9/25/2013 4:17:02 PM
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Yeah, my keychain is silly.  I have Starbucks, Qdoba and Giant Eagle (local grocery) on there.  Giant Eagle does a cool thing with GetGo gas stations. Buy food here and earn discounts on gas.  Though I almost lost my mind when the power went out while I'm filling up at 3.07 a gallon the other day.  Kid comes out and says he can discount me.  

 

What does my subject have to do with all this?  Well, nevermind the whole incident makes my kid late for karate and she has to do pushups for being late.  But then a kid whose rich daddy I used to work for pulls up in his new porshe while I'm stressing over my .40 per gallon.  Sorry for the whining but what are the odds?  Predict that!

Re: The rich get richer
  • 9/26/2013 7:31:41 AM
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A Chicago grocery chain, Dominick's (now a division of Safeway), has the same sort of program with Mobil. That's great, since I like to shop at one and the other is my preferred gas station (and with two SUVs -- gulp -- we spend a lot on gas in this household). With that latter bit said, I can certainly appreciate your experience at the pump. That just wasn't your day.

Lithuanian Cheesehound
  • 9/26/2013 8:55:25 AM
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Privacy, schmivacy.  My favorite loyalty card is from CheeseBoy, a relatively new fast food chain specializing in grilled-cheese sandwiches.  They have a card, but also an app you can fire up before you get there, and just tell the cashier "My short code is 368" to get the payoff.

Which is... buy 7 sandwiches, get one free!

End of discussion. :-D

Re: Lithuanian Cheesehound
  • 9/26/2013 11:15:34 AM
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You made me laugh urbie4!

Re: Lithuanian Cheesehound
  • 9/26/2013 12:32:08 PM
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Almost sounds worth moving to the Northeast for!

Re: Lithuanian Cheesehound
  • 9/26/2013 1:52:55 PM
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Urbie, where are these grilled chesse sandwich shops located? Sounds like a great idea and using the customer card for free food is amazing. 

Re: Lithuanian Cheesehound
  • 9/26/2013 1:57:05 PM
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It's a Boston-based chain: http://www.cheeseboy.com

There are two particularly convenient locations: South Station (where my train arrives), and 280 Washington St., which is right around the corner from my office!

Re: Lithuanian Cheesehound
  • 9/27/2013 10:40:37 AM
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You would have thought something like this would have originated in Wisconsin, with all those cheeseheads!

They have to pay
  • 9/26/2013 11:19:08 AM
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You can see that most people only join because they are given something. It is up to you to determine if the payment is worth the information you are giving up. In most cases, I just say no.

Re: They have to pay
  • 9/26/2013 11:24:38 AM
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So in most cases you say no but have said yes on occasion? What's been worth it to you?

Re: They have to pay
  • 9/26/2013 11:34:17 AM
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I have said yes on those occaisions it has been worth it to me. But that is a VERY rare event.

Re: They have to pay
  • 9/26/2013 11:46:02 AM
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Right, I get that it's rare -- but what I'm curious about is what makes you sign up. Is it because you'd be buying a lot from the retailer anyway so any promo would be an opportunity to save? Is it because it offered a discount on a specific product you'd been intending to buy? Did free shipping do the trick? Something else?

Re: They have to pay
  • 9/26/2013 11:56:26 AM
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The best example i have is Panera bread. i go there for lunch about once/week and they offered me discounts on what i usually buy to sign up. I get almost one offer a week ( which co-incides with my normal visit0 and I always save at least $2 for lunch. All I gave them was my e-mail, so I thought it was a good trade.

Loyalty card trap
  • 9/30/2013 11:15:02 AM
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I do have quite a few loyalty cards. I like the ones that actually give me a benefit. Some really give consumers very little in return. I recently read an article about large supermarket chains eliminating loyalty cards because they didn't really have a use for the data and customers didn't find it very beneficial. I think that tiered loyalty that offers true rewards is the future of loyalty marketing that will truly create loyalty.

 

Re: Loyalty card trap
  • 9/30/2013 1:05:29 PM
NO RATINGS

@Maryam, not to be creepy, but I thought about you the other night when I was picking up a pizza for dinner at a little restaurant nearby. This is one of those places that give you a free pizza for every 20 coupons you collect based on your pizza purchases. It still gives out those paper coupons to collect, but I also saw that it now also offers  the Belly loyalty program you wrote about for us a while ago: Belly Ups Loyalty Quotient for Small Shops. I was quite impressed it'd gone so "high tech" with its loyalty program!

Re: Loyalty card trap
  • 9/30/2013 4:37:37 PM
NO RATINGS

Beth I am glad you remembered my blog! I am seeing more of Belly and others in my area. The place I first started using Belly just awarded my daughter a free yogurt she was thrilled.

Technology has great opportunities to improve loyalty programs for users and retailers. It makes tiers, award and tracking more simplistic.

Hope the pizza was good!

Re: Loyalty card trap
  • 9/30/2013 5:51:43 PM
NO RATINGS

Good, but not as good as homemade. ;-)

 

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