Tesco, Topaz, Brown Thomas and Boots top new loyalty index
New Loyalty Performance Index (LPI) shows Tesco is the number one food retailer programme while Topaz Park or Play is the leading fuel retailer scheme
15 April 2014 | 0
Ireland is a nation of ‘enthusiastic belongers’ who aren’t shy about joining loyalty programmes – with research showing each adult in Ireland carries an average of four loyalty cards in their wallet.
Amarach Research and Chilli Pepper Marketing – The Loyalty Agency, have now teamed up to produce the first inaugural Loyalty Performance Index (LPI) report, showing which loyalty schemes are generating the best results.
Tesco Club Card tops loyalty index
The number one food retailer programme was the Tesco Club Card with 73% of adults registered for its loyalty programme and loyalty members spending up to 80% more than non-loyalty members. Meanwhile, the survey conducted in Q1 2014, also showed the number one fuel retailer programme was Topaz Play or Park with 64% of its members pro-actively participating in the programme and actively redeeming their rewards.
The leading beauty retailer programme was the Boots Advantage Card with 61% of its members collecting points and 60% redeeming these rewards. Brown Thomas also came up trumps, being named the number one fashion and homeware retailer programme for its Brown Thomas Black scheme, with 42% of the chain’s transactions being done by members.
Looking at the LPI findings across the entire retail industry, the food retailers account for two of the top four programmes in the survey, with Topaz coming in at number four, even though it is a relatively ‘young’ programme – proving that longevity is no barrier to generating customer loyalty.
Impact of active customer participation
One of the most interesting findings from the study is the impact of active customer participation on the programme’s success. While customers may be aware of a loyalty programme and may be using their card to collect points, the research found that if they never or seldom redeem their rewards, then they don’t actually value being a member. On the other hand, customers who use their card, pro-actively participate and redeem their rewards, see the value and vote with their feet. This is where brands see the highest return on investment (ROI) for their programme.
For some retailers this means that customers who are in the loyalty programme can spend between 40-50% more and in one case up to 80% more, than the customers not pro-actively participating in the loyalty programme.
Ongoing loyalty card usage
Further results from the report continue to support the economic case for loyalty with just 12% of Irish adults having dropped out of or stopped collecting points for any loyalty programme in the past year – higher for men (15%) and over 55s (also 15%). With the vast majority not having dropped out, this suggests that once you get customers into a loyalty programme then they will likely remain members, contributing a sizeable economic surplus to the programme operator.
The report publishers have now begun a series of one-to-one briefings with brands operating loyalty programmes in Ireland. To arrange a confidential briefing on the LPI, contact either Gerard O’Neill in Amárach Research (firstname.lastname@example.org) or Leanne Papaioannou in Chilli Pepper Marketing – The Loyalty Agency (Leanne@chillipepper.ie).