The current loyalty programs and what doesn't work

So shall we clarify what is wrong with current loyalty systems?
We give practical examples so we can understand better, but we apologize in advance for the examples we will use, both so as not to advertise, and because we do not want to advertise negatively.
All signs, although they have different loyalty programs in general terms, are equal in some respects, and so, we chose two extremely important ones such as COOP and ESSELUNGA.

Table of Contents

coop alleanza 3.0
esselunga

WHEREAS, when we talk about COOP, we need to know that there are a great many local Cooperatives, operating over one or more regions of Italy, all associated with a single central purchasing body, as opposed to ESSELUNGA which is a stand-alone brand, although operating over multiple regions of Italy.

In this case, we took as an example COOP ALLEANZA 3.0, which from Feb. 1 to Dec. 31, 2019 (although now passed), in all its supermarkets and hypermarkets in Veneto, Lombardy, Friuli, Marche and Abruzzo, offered its consumers, simply by doing their shopping, points that accumulated every time a given consumer made purchases: with every purchase of consumer “X,” in one of the COOP stores, or ONLINE through EasyCoop, or in other member cooperatives, he acquired one point for every euro of spending made.

With partners also, additional points could be accumulated to more easily achieve the desired prize.

There was also the possibility of transferring points from one membership card to another, and with each payment with a membership card, you could get an extra point for every 2 accumulated for that single expense.

By contrast, during the same period, we could go to ESSELUNGA, register for the loyalty program to get 2 points for every euro of spending over the threshold of 5 euros, with immediate issuance of the FIDATY point, personal, free etc. etc. … At this point let’s say … what are the real advantages that should lead me to choose one over the other competitor to go shopping?

Mind you, we have to ask this question based on the loyalty program alone.

Because we have already emphasized that the loyalty program is that central argument that should, in turn, give centrality to the individual (in this case, the customer), and should cause him or her, by stimulating him or her with this program, to prefer either the former or the latter sign.

And what is the answer?

The best gift? So whoever chooses a more “compelling” catalog of rewards gets the best customer favor? Or will others still buy and, in addition, accrue gifts?

But from the programs we have seen of these two signs (and we repeat that this is generally the case for essentially all of them), we do not capture any real mechanism of interaction that triggers loyalty to this or that sign, or any mechanism that in any case brings the individual to the center of attention leading him or her in turn to prefer the former over the latter.

Very often we know that, in general, promotions are the ones that really move consumers (at least a substantial portion), while loyalty programs, which are now “taken for granted,” are that extra something that comes later.

So money doled out in spades to this, rather than that customer, regardless of what he buys, how much he buys, how often, etc.

coop alleanza 3.0
esselunga

From here we quickly move on to another question.

What are the reasons (other than parking, convenience, proximity, average prices, the number of promotions it makes available to its customers), or what is the real reason that should lead me to prefer sign “A” rather than sign “B”?

If we look at the loyalty program, in our opinion, this is absolutely not the element to move customers from “A” to “B,” except in infinitesimal numbers.

At this point, we instead ask you a question …

But do you prefer to participate in free or paid loyalty programs?

You will say … well! What a stupid question! You don’t mean to tell me that in order to shop for groceries I now have to buy a loyalty card?

The answer is itself very easy: the bulk of us are Amazon customers and have subscribed to “Amazon Prime.”

amazon-prime-1

Amazon Prime is Amazon’s loyalty system, which offers a whole range of particular services at a low cost; therefore, I am a subscriber to Amazon Prime, provided that, at its inception, there was no Amazon Video, Amazon Music but only the express delivery service as opposed to ordinary delivery.

However, my “paid loyalty” meant that I could have (and still can), a whole range of products in an extremely short time and without additional delivery charges compared to non-Prime members.

Today, Amazon Prime bestows a whole range of other services, but still, it remains a loyalty system and this is a system of greater loyalty and interaction with its users because today they/we, can watch a significant number of movies and series on cable for free, we can listen to music, etc.

However, we are still not on “one-to-one” retention, we are still not exalting the centrality of the individual, we are still not targeting every single customer, however, we have taken a small step forward.

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