Customer loyalty schemes appear to be more popular than ever, as a result of the downturn.
Last week British Gas announced that it was joining J Sainsbury, BP, Homebase and a raft of other companies on Nectar, the UK’s biggest loyalty programme.
A loyalty scheme has recently been launched for farmers’ markets across the UK, while toiletries chain Superdrug is planning to launch one in May. An estimated 85pc of British shoppers now hold a loyalty card, according to market research company TNS.
The rules of loyalty schemes are simple – the more you spend in a particular shop or on a particular service, the bigger discount you receive.
The first known loyalty scheme was launched by Curt Carlson, a Minnesota-based businessman, in 1938. He launched his Gold Bond Stamp Company during the Great Depression with a $55 loan, offering shoppers incentives to shop in particular grocery stores. The movement has been growing ever since.
Jan-Pieter Lips, Nectar’s managing director, says that as household incomes become tighter, loyalty schemes are become more attractive to shoppers and therefore a more valuable weapon in retailers’ armouries.
Research out today from the IGD shows that more than 60pc of consumers think that they will be worse off in the next 12 months. This is when loyalty schemes come into their own.
Separate research carried out last year showed that 71pc of marketing directors felt that loyalty schemes had become more important since the credit crisis started. Those in retail, telecoms and banking were the most supportive.
Nectar’s Mr Lips said: “We have seen an increase in engagement [during the downturn]. It is a little like found money. Like when you go to your sofa and find a penny or a nickel,” he says.
In 2009 in clear recognition of how stretched household budgets had become Tesco, the UK’s biggest supermarket, offered double points to its 15m-plus Clubcard loyalty scheme holders.
The British Gas addition is the latest stage in Nectar’s growth. The card, which has more than 17m active members in the UK, was launched eight years ago by Air Miles-founder Sir Keith Mills, whose Loyalty Management Group UK was sold to current owner Groupe Aeroplan in 2007.
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