I’m not a big fan of grocery shopping, but one thing I appreciate is the loyalty card that I use when I do shop.
It’s kind of cool when the checker has scanned all of my items and I swipe my card because it’s fun to watch the total due go down as the loyalty card discounts are applied. “THANK YOU LOYAL CUSTOMER!” pops up on the small customer interface at the grocery store check-out line after I’ve swiped my grocery store card.
It gives me a warm, fuzzy feeling as if I am part of an exclusive club or family. It’s a mutual relationship of giving: I give my loyalty to the store, and the store rewards me by offering me “exclusive” pricing and “points” toward something or other.
Because of the great discount I get on fuel as a result, I remain generally very loyal to that particular grocery store chain.
Loyalty programmes are big business and are very popular in many industries, especially the credit card and airline industries.
With the advent of computers, tablets, and smartphones, loyalty programmes have become less labour intensive and more effective at driving customers. They can be a very effective way of reaching and developing audience and data.
While these programmes are not new to the newspaper industry, they do not seem to have been widely adapted.
Loyalty/membership programmes, even small ones, can provide a very strong audience development tool with many other tangible benefits to the newspaper company, as well.
Here is a brief summary of loyalty programmes by the numbers:
First of all, loyalty programmes are big. Colloquy, a publishing, education, and research practice, just released its annual loyalty survey. According to the report, loyalty programmes have grown 26% in the past two years to US$3.3 billion annually. The average consumer belongs to 29 loyalty programmes, but is active in only 12.
While the number of loyalty programmes has grown, overall active participation has dropped from 46% to 42% since 2010. Around 75% of loyalty programme members are between the ages of 25 and 54, with the majority of those falling between 35 and 44. Surprisingly, men make up 64% of loyalty memberships. Retail (including grocery) leads in loyalty programme penetration. This is followed by credit cards and airlines.
Secondly, loyalty programmes do work. A 2013 survey by Maritz Loyalty Marketing showed that loyalty programmes are generally viewed positively by consumers and do influence buyer behaviour.
In addition, consumers don’t mind having to put forth a little effort in signing up. Eighty percent said they felt it was worth taking the time to fill out a form, etc., in exchange for what the loyalty programme offers. Almost 60% of respondents agreed they made purchase decisions in order to maximise programme benefits.
Needless to say, the benefits to newspapers can be many:
- Subscription/single-copy sales: In most cases, loyalty/membership programmes are available only to consumers who subscribe. I would recommend a tiered approach that enables non-print subscribers to participate in the programme. If the membership benefits are meaningful enough, they alone will help to drive subscription sales.
Single-copy sales can also be influenced by a loyalty programme. For example, one idea might be to partner with local convenience store chains with a co-branded loyalty card. Purchasing the newspaper in those stores allows the consumer to build up points that can be used on discounts for coffee, snacks, etc.
- Advertising: Loyalty programmes provide the opportunity for newspapers to partner with and promote their advertising customers through events, giveaways, etc.
- Data: Membership/loyalty programmes are a wonderful way to gather data about consumers and their interests without being overly intrusive. As the Moritz study points out, most consumers do not mind providing this information in exchange for a meaningful loyalty programme.
- Web traffic: Most newspapers now operate multiple Web sites and a well-planned loyalty programme can drive traffic to these sites.
- Alternative revenue streams: There are several ways newspapers can generate revenue through membership programmes. For example, many newspapers have developed secondary revenue streams through the implementation of a company “store.” One membership benefit might be discounts on things like back issues, memorabilia, clothes, etc.
- Social media tie-in: Loyalty programmes are also a wonderful way to build a newspaper’s social media awareness and participation. The flip side, of course, is that newspapers can also use social media to drive participation in the loyalty programme.
Building and managing an effective loyalty programme is not easy and takes a great deal of thought and planning. Obviously, the key to a successful programme lies in getting consumers to engage with it.
According to Colloquy, on average, 58% of participants in a loyalty programme do not actively participate in the programme.
Indeed, I have seen several programmes in the industry that started off strong because of good launch marketing, only to end up with thousands of “members” who don’t take part in what the programme has to offer. It goes without saying that these members probably are not bringing a lot of value to the newspaper company in the way of subscription retention or loyalty.
According to the Maritz report, there are several factors that go into driving successful engagement with members:
- Communication: Participants want and expect to receive communication about the programme and the communication must be relevant!
- Personalisation: Again, to the above point, consumers want membership programmes that are tailored to their interests and needs. Generic programmes that don’t offer some level of individual preferences will struggle to drive participation.
- Privacy: While personalisation is important, consumers also do not want to feel violated by being asked to provide intrusive or personal information or be presented with options in a patronising manner based on what they have done before.
Managing the personalisation/privacy balance can be somewhat tricky, but newspapers that figure it out will maximise their chances for a successful programme.
- Values: The Maritz report emphasises the importance of incorporating the audience’s core values into how the programme is set up and administered.
The survey showed that only around 40% of participants feel the programme values are aligned with their own personal values, but consumers were more likely to engage if the loyalty programme espoused values that align with their own.
- Simplicity: For a programme to be successful it must be easy to sign up, participate, and redeem any rewards being offered. In this world where attention spans are short and choices are many, consumers will not stand for complicated programmes that require a great deal of their time.
The big difference between newspaper loyalty programmes and those in other industries is that newspapers are not just trying to drive loyalty to a brand, but to a habit – the habit of where consumers go to get information about their daily lives.
Newspapers are not just asking people to spend money on their products, but to spend time with them and to engage with them.
Good loyalty programmes can help newspapers build followings that translate into circulation, advertising, engagement, and potentially other revenue. After all, let’s face it: Regardless of any other demographic measurement, your most important audiences are your loyal customers!