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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Re: Loyalty card trap
  • 9/30/2013 5:51:43 PM

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


Re: Loyalty card trap
  • 9/30/2013 4:37:37 PM

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 1:05:29 PM

@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!

Loyalty card trap
  • 9/30/2013 11:15:02 AM

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: Hate them
  • 9/30/2013 9:05:03 AM

@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
  • 9/30/2013 8:11:02 AM

@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 1:08:59 AM

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
  • 9/29/2013 10:09:06 PM

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
  • 9/29/2013 2:58:48 PM

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
  • 9/28/2013 8:35:45 PM

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.

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