Points Mean Prizes – How Loyalty Program Points Are Far More Powerful Than Cash

Most High Street retailers these days realize that the secret to survival, against out-of-town shopping malls, or even worse, on-line retailing – is to have a good Loyalty Program. Many try to use price as an advantage, but cost-cutting is a battle that the small independent retailer can never win. Along with the plethora of […]

Most High Street retailers these days realize that the secret to survival, against out-of-town shopping malls, or even worse, on-line retailing – is to have a good Loyalty Program.

Many try to use price as an advantage, but cost-cutting is a battle that the small independent retailer can never win. Along with the plethora of CashBack Clubs now springing up, sites like TopCashBack, and Quidco have to be included here as all they do is create a breed of shopper whose only aim in life is to get the biggest cashback, although not necessarily against the best original price. This of course totally destroys any concept of loyalty.

These cashback sites do serve a good purpose for the occasional large purchase, but they don’t tend to work for the daily shopping habits of countless millions of shoppers. However, Loyalty Programs are in great demand to help High Street community retailers build up and maintain a loyal following of regular shoppers. But there is more to it than that.

High Street retailers used to be the life blood of the community, and these small business owners know and appreciate that good service breeds loyal customers. But they also know that apart from any after-sales hand-holding (a very important weapon in the armory of the small businesses survival battle against the giants), what attracts and keeps most customers loyal to local High Street community outlets is instant gratification – a smile, knowing your name and so forth. Ask any teacher or parent, the key to successfully training a child (or a pet) in how to behave, and they will tell you: – The Secret is ‘Instant Gratification’. No point giving a child a treat long after they have done as they were told. If you teach your dog a new trick, no point giving him a doggie biscuit several hours later. The same applies to High Street retailer’s choice of loyalty programs.

Translate that into a Loyalty Program, and be astounded by the results.

There is a whole plethora of loyalty programs out there from the humble coffee shop card where you get the tenth coffee free, to the well-established Tesco’s ClubCard, and Sainsbury’s Nectar Card. Out of those three, in order of instant gratification, would you believe, the humble coffee shop card comes out tops, followed by the Nectar Card, and with Tesco’s trailing a long way behind.

Why is that?

Well, as soon as you have bought your 9th coffee the waitress tells you ‘Your next coffee is FREE’.

Instant Gratification.

Now, Sainsbury’s choice of supporting the Nectar Card, rather than creating their own loyalty card, is a stroke of sheer genius. Why? Because here is a loyalty card that you can use not just in Sainsbury’s, but in thousands of well-known High Street stores, and online retailers. Rather than offering the lowest prices that they could afford to (an unwinnable price war) they offer Nectar Points on every transaction, and then when they write to you every quarter, or advertise in the media, you can go into any Sainsbury’s store, and you will usually get offered a multiple of the actual value of the Nectar Points- as long as you spend these points in Sainsbury’s. On top of that of course you can go at any time into one of the many Argos catalogue outlets, and immediately redeem your Nectar Points for goods. Almost instant gratification. Probably this featured high in the list of reasons why Sainsbury’s has just acquired the Argos chain of stores for £1.3 billion. Their plans to close over 200 Argos Stores, and relocate them in their own stores, is another step towards Instant Gratification.

Tesco’s come bottom of the list for instant gratification, as you have to wait three months before you get the letter containing all sorts of bargain offers, as well as gift vouchers to be spent in store, and perhaps with offers to double up or more their value on certain items on promotion within their Stores.

So, how do you get a loyalty program to give you true, real-time gratification, and does such a system exist?

First of all, Reward Points need to be given instantly the transaction goes ahead, rather than a simple cash offering. Loyalty programs that offer cash rewards normally need a few days to process the transaction then the banking system adds in its delays.

Secondly, the Loyalty program needs to reward members when they involve their friends in the program. Every member must have the ability to involve their friends as well, so that they get Loyalty Rewards Points immediately every time any of their friends spends money at any Loyalty Merchant involved in this program. When you have a team in place, it can be quite exciting every time you go into a Loyalty Merchant and see how your points balance has grown without your intervention. What if one of your team members buys a new car from a loyalty merchant?

Thirdly, the program needs to easily encourage a shopper to make a commitment of as little as £50 per month. Obviously, more is better, but by starting low, it is easier for everyone to gradually build up their commitment. This will also assist everyone to easily build a team of 5 or more contacts, who in turn will just love to duplicate that process.

Fourthly, the Loyalty Program has to be ‘Small Retailer Friendly’. By these retailers participating, and getting their current loyal customers signed up as FREE members, not only will they have more customers directed to them (without the need for expensive ‘Pay and Pray’ direct marketing), but they will start to build up a considerable secondary income stream, based on the shopping habits of their customers – even when they shop in competitive stores (or on line). Where a normal shopper may find it easy to get 5 or more people involved, these small businesses may well have hundreds of customers they may want to get signed up. (Here, of course, lots of POINTS mean LOTS of PRIZES!)

To see how the INSTANT GRATIFICATION works in this type of Loyalty Program, you just need to consider the following. Every shopper will earn Reward Points (RPs) immediately they order gift vouchers from participating Key Loyalty Merchants. They will also earn RPs immediately when successfully completing a purchase in any of the expanding network of small independent Loyalty Merchants. Also, when any member of their team (shopper or small business owner) does likewise, their account will also be immediately updated with their Loyalty Reward Points (LRPs). As an added bonus, the shopper should also earn further RPs when redeeming existing RPs to make full or part payment towards an order. For instance, if spending £50 in a local butcher who is also a Loyalty Merchant, and the shopper uses £25 cash and redeem 25 RPs, they will be credited for the FULL AMOUNT of RPs due on the current purchase. This will encourage them to spend more in this and other associated Loyalty merchants. They could also use the Points to purchase more Gift Vouchers from the Key Loyalty Merchants.

With the Nectar Card network now over 20 Million strong, clever shoppers can not only get their 1% Nectar cashback when spending in participating Stores, but if that Store is also a member of this Universal Loyalty Program, they will not only get between 2.5 to 5 times more than the Nectar rewards on their purchase, they will also get Loyalty Rewards Points on everything members of their shopping community spend.

Why not look for such a system in YOUR High Street? Alter all, it’s totally free, and could totally supercharge every shopping trip. Even better, get your local High Street Community Stores involved as well, and benefit even more!


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