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Retail Technology, Retail technology News

Loyalty membership levels soar but relevancy still languishes

Friday December 11 2009

Researcher, GI Insight is calling for better targeting and personalisation of customer communications, given the high levels of personal data now available from loyalty schemes.  

Researcher, GI Insight is calling for better targeting and personalisation of customer communications, given the high levels of personal data now available from loyalty schemes.

 

The latest study from GI Insight shows that 87% of UK consumers own at least one loyalty card. Of these, over a fifth own four or more cards from different companies. However, effective use of personal details handed over by loyalty scheme members has yet to result in relevant communications with 68% of all customer communications being irrelevant to the recipient.

 

Variations across gender, age and region were also highlighted. Women are more likely to own two or more cards than men and 35-44-year-olds are most likely to own four or more loyalty cards from different companies. Northerners are less likely to own loyalty cards, while the Scots are most likely to own four or more.

 

With this level of penetration established, GI Insight said loyalty schemes were clearly mainstream and here to stay. They provide huge pools of transactional data that can be used for all sorts of intelligent marketing, including: developing customer behaviour and value, preventing customer loss, identifying semi-dormant customers, and incentivising them.

 

Andy Wood, GI Insight managing director commented: "Despite heavy uptake of loyalty scheme and overwhelming support from finance departments, we are not seeing the high level of targeting and personalisation we would associate with increased levels of loyalty scheme membership.

 

"The problem is that too many people think that automated CRM [customer relationship management] systems can give all of the answers but a data analyst with the ability to analyse and manipulate large datasets to produce meaningful and actionable insights is essential.

 

"Additionally, marketers can be unaware of the relevant data needed to identify, manage and encourage the behaviour of scheme members and often collect far more than is needed. Regular refreshments are essential to understand what data is truly significant. There's also a certain level of inertia in the market as people are afraid to do things differently. This wasn't a problem when the economy was booming but in the midst of a recession new strategies need to be adopted.

 

"If customer data is used smartly, retailers and FMCG [fast-moving consumer goods] brands could benefit hugely from increased loyalty activity at a time when it matters most."

 

www.gi-solutionsgroup.com/gi-insight