Loyalty is powerful
“Loyalty programmes can be very really powerful as a tool. But such a programme is not a slam dunk. It’s a bit of a trial and error”, said loyalty expert Oliver Dervey of Swisscard. At the European Foodservice Summit 2023, Dervey shared valuable insights on building impactful loyalty initiatives, emphasizing customer data, feedback, and measuring success.
Why is loyalty so powerful? “The loyalty effect is potent because it works different angles” says Oliver Dervey. A loyalty programme can, for instance, attract more customers. It brings more customers to the stores. It retains those customers, it makes them churn less. It makes them come back. That’s a great impact. Above that, it can make customers spend more. Lastly, it can also help streamlining operations and reducing costs. “But it’s not a slam dunk. It’s not like you take this out-of-the-box, you plug it in and it works. It is an iterative process” says Oliver Dervey.
Part of the success is based on the utilisation of the collected data. “There’s a lot of data that the loyalty programme can generate. But, there is a process between the data that comes in and the actionable insights where you want to end up in the end” Dervey points out. “You’ll have specific questions you want to know about your customers. Find out about the known unknowns, find out what you know you don’t know. However, there are also unknown unknowns. And those can be interesting, right? You start doing correlations around, for instance, which two products are most often bought together by your members.”
The findings can be used for targeted marketing on the one hand, but also for managing operations on the other hand. In other words: “What items do I absolutely need to make sure they’re always in stock? And what kind of items could I try to upsell? What kind of items do I present in a very prominent location in a certain store because that’s where I see my opportunity for margin expansions?” explains Dervey. And, of course, the data also helps with staffing.
Keep it simple!
Speaking of the design of the programme, Dervey warned: “If it is too complex, people will disengage. It’s just not worth their cognitive effort.” He also emphasized the importance of the timing of rewards. “In loyalty, we talk about the golden moment. The golden moment is the moment when a member of your programme gets a first redemption. That’s the value. So you have to make sure that that moment or moments like that happen frequently.”
Do not give up!
“You rarely do bullseye from the first go, but it’s all traceable”, says the expert. “But, there is the difference between regular marketing and loyalties. With loyalty, you can track what you’re doing. You can track if you’re changing behaviour.”
Keep refining, keep improving, keep adapting!
Dervey encourages: “Don’t hesitate to experiment. Try it for a little bit and then see if it works and if it doesn’t, try something else.” The final piece of advice he shared with the audience was: “Whenever you with come up with an idea, you want to try it, always ask yourself, would your mom understand it?”
