Words matter because of the meaning we attribute to the them. The word is really shorthand for that meaning. And when we are familiar with a word, we skip quickly over it, our brain giving the word meaning without any heavy or serious thought.
Take ‘loyalty’. Loyalty means ‘a strong feeling of support or allegiance’. Many of us have loyalty to family, country, our footy team. There is strong emotional attachment there.
What about loyalty to a retailer? The number of loyalty programs in the market suggest so.
When we see the term ‘loyalty program’ we, not unreasonably, assume that it rewards or creates a strong feeling of support or allegiance. In Australia at least, that’s a stretch.
Almost all loyalty programs have discounts at their core. Those discounts represent the reward for being a member and for spending at the retailer. But you don’t have to be loyal to the retailer to join their scheme and discounts alone are unlikely to create loyalty. In fact, most people’s wallets demonstrate the opposite of loyalty, containing multiple loyalty cards.
Joining a loyalty program is a rational decision made from your hip pocket, not your heart. Most of us join, not because we are loyal, but because doing so makes financial sense.
Just saying something doesn’t make it true. Calling your reward scheme a loyalty scheme doesn’t create loyalty. And, as we skip over the word, it probably stops us from designing schemes that truly do create and reward loyalty.
Calling schemes what they are – reward schemes – might cause us to slow down and consider whether that’s enough or whether we need to do more to make the scheme a true loyalty program, one that rewards and creates a strong feeling of support and allegiance.
A good example of a scheme that does this is Marks and Spencer’s Sparks scheme. Here, you gain Sparks (points) when shopping – nothing new there – but also for writing an online review or by ‘Shwoping’ in store – dropping off old unwanted clothing (even if not from M&S) to be sent to Oxfam (the equivalent of Vinnies).
The more Sparks you collect, the more benefits you unlock – receiving tailor-made offers, invitations to events and the chance to win money-can’t-buy experiences, as well as priority access to the M&S Sale and new season previews. Plus, every time the Sparks card is used, M&S donates to a good cause.
The Sparks scheme taps into the heart when earning and spending points. By bringing emotion into it, the scheme has the chance of creating and rewarding loyalty.
Whilst rewards are earned by the customer; loyalty is earned by the retailer. Loyalty is a potent force, borne out of trust, and it doesn’t come easy. Using the right words to describe your current scheme is a good place to start.
For more information on our Retail Insights visit commbank.com.au/retailinsights