Bella Katz: Loyalty programmes cry out for disruption

Air points remain popular, mostly because the credit card company's partnership with air points makes it a no-brainer to opt in.

Opinion

Woolworths supermarket in Australia is introducing a new loyalty programme.

The appropriately named Woolworths Rewards offers immediate money off shopping rather than point collection and redemption over many months. This is in response to what has been called "points fatigue" - and I totally get it.

So few loyalty programmes are of any genuine value to customers, yet every company contemplates them at one time or another.

They make us feel good as marketers to introduce, but unless they are super simple - like when your local café gives you that fifth coffee free, the administration quickly kills the best intentions.

Unfortunately most of them are overly complicated and the benefits marginal compared with what we spend to take part. I won't even bother trying to calculate what I spend to earn enough points to get a return ticket from Melbourne to the Gold Coast. I wouldn't be surprised that my $300 flight cost me closer to $30,000.

However, of all the loyalty schemes out there air points remains popular, mostly because our credit card company's partnership with air points makes it a no-brainer to opt in. Just don't look at the other prizes they offer for redemption. I looked once and am pretty sure a toaster cost me several thousand dollars in expenditure.

Loyalty schemes feel like a concept ripe for disruption. Or maybe they just need to be parked for a while. I'm on the fence on this one, but definitely over having a wallet jam-packed with plastic cards. As I think many of us are.

I'm also wary of all that data my little plastic card collects on my purchases and how it's used to market back at me. I don't feel either Coles or Woolworths warrant my loyalty, and half the time I can't remember which programme belongs to which supermarket: Flybuys, Everyday Rewards. All the same to me.

I don't feel either Coles or Woolworths warrant my loyalty, and half the time I can't remember which programme belongs to which supermarket: Flybuys, Everyday Rewards.

I think more and more of us are looking for the simplest and most honest solutions. In the supermarket world that's why Aldi continues its Australian domination - no loyalty card necessary, just cheap prices.

Loyalty is such an overused word these days. I feel like we're all a bit over it.

The irony of it is that a brand's best customers tend to be the ones that need least incentive to purchase. Loyalists intend to buy from your already and can be rewarded without dropping prices. For example, offering exclusive access to new products, limited ranges, first to preview items and so on.

So if you're contemplating loyalty schemes for your own business, thinking you're missing out on all that purchase data from the plastic card, or administering an increasingly complicated and cumbersome scheme with little gain back - don't be afraid to kill it and go back to basics. You don't need to collect points, just give your customer something tangible. Maybe buy them a coffee.

Bella Katz is an Australia-based brand and marketing consultant and advises New Zealand companies exporting to Australia. She is also a New Zealand expat, calling Australia home for over a decade.