Here’s a task. Think of the two most famous Australian loyalty programs.
We’d be surprised if you didn’t have either FlyBuys or Woolworths Rewards in mind. But are these schemes generating real loyalty?
Aldi recently lashed out at the points programs of Coles and Woolies in an advertising campaign that verbalised the sentiment, “Don’t get sucked in by pointless points. Switch to Aldi and save money instead.” The campaign makes a good point (sorry): supermarkets need more than a points programs to generate and maintain customer loyalty and to beat their competitors.
What is increasingly obvious is that consumers find it hard to conceptualise points and what they can give them. Which is why more and more loyalty programs are turning to prize and cash-based promotions to supplement their existing programs.
Australia’s leading rewards provider, Rewards Come True, knows the power of cash rewards. In her speech at the recent B&T Awards, CEO and founder of Rewards Come True Pat Dalton retold the company’s history, telling the audience that when her company brought Eftpos gift cards to Australia as cash rewards back in 2004, they saw their clients’ campaign results double.
Their work has taken players like ASUS, AMP, and Shell towards new approaches to incentive and rewards programs. And it looks like supermarkets, too, are moving away from purely points-based loyalty programs.
While it looks like a bloody battle between the two major supermarkets in Australia, there is something remarkably wholesome being used as a weapon: Coles Little Shop – collectable miniatures of Australia’s favourite brands, from Vegemite to Colgate and now, Coles Brand Pavlova.
Yes, it’s back for Christmas – get back in those ‘Swap and Sell’ Facebook groups.
Find a lucky “red hand” (like those that appeared in the “Down, down, prices are down!” ads) and you received a $100 cash prize to be spent on your ensuing Coles shop.
These little loyalty supplements and the potential for cash prizes provide notches in the habit-building process; people went out of their way to shop at Coles, spend that $30 required to get their toy, and it was reflected in their sales figures.
Woolworths even called Coles out as responsible for its less-than-spectacular performance in the same quarter – that and the plastic bag ban.
Whether this is a sustainable move for the company is left up to question. There is always going to have to be that next great promotion.
But at least now Coles know – it’s that joyous pursuit of a tangible or financial reward that drives sales and loyalty.
Some of us may have been surprised by how much we wanted to engage with campaigns like Little Shop, but Dalton isn’t.
“Taking a look at our unique customer spend data, we easily understand that the surprise and delight element these campaigns play with has a broad demographic appeal,” she says.
But the success of Coles’ future campaigns, Dalton adds, is contingent on what it learns from its successes – what and how it learns from the data its users present.
However, Dalton says what make Rewards Come True different is that a promotion never stands alone.
“We see every consumer contact as an opportunity to understand them better – to understand customers even better than they understand themselves,” she says.
“Promotions are a unique opportunity to grow that data pool, improve its quality and to build loyalty in the process.”
So, why doesn’t every brand jump on the promotions train? Well, because they can be complicated. They require distribution, promotional insurance, managing stakeholders and claims.”
Dalton explains how partnership with Rewards Come True has removed these struggles for its clients, dubbing it “the engine room” behind over 2000 leading brands.
To fulfil the thousands of campaigns they run each year, Rewards Come True runs its own mail house and draws on decades of customer experience. Its teams are busily working nigh on 365 days a year so that clients don’t have to be.
When it boils down to it, promotions – both those run by companies like Rewards Come True and supermarkets like Coles – work. And they work because they’re novel; they give us the illusion of a free gift, and they give us a little ray of sunshine in our days.
They send customers back in store (or online) time and time again. Really, what more could a marketer want for Christmas?
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