Why incentives are key to brand loyalty

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Why incentives are key to brand loyalty

After two years of COVID turmoil businesses across the UK are now grappling with the cost of living crisis that is ushering in a period of extreme caution among customers.

With inflation at a 40-year high, consumer confidence is falling rapidly. Even if people have money in the form of savings they are now more reluctant to spend. They fear soaring prices for energy and food will put the squeeze on their spending capacity for the foreseeable future.

GfK’s latest Consumer Confidence Index reported confidence was now at an historic low. Data based on interviews with 2,000 adults in July showed the worsening economic situation was “darkening the mood” of the nation.

This fear and caution is mirrored in the B2B market where businesses are being much careful about their spending with other businesses. An index from NatWest looking at business activity across the UK recorded the lowest reading in six months in July.

Retailers are facing a more permanent shift in market dynamics. A move away from high street shops to e-commerce during the pandemic has swung back the other way. E-commerce market share peaked at 37.4% in February 2020 but has now fallen back to 25.3%.

However, research published by global professional services firm, Alvarez & Marsal, reveals an estimated 17.2m UK consumers plan to make permanent changes to the way they shop.

Whether your customers are consumers, or other businesses, the message is clear: you are now in a fiercely competitive trading environment.

People and businesses will still have to spend money, of course, but now more than ever they are looking for that extra bit of value. Extra incentives can make all the difference when decisions about major supply contracts are made.

Putting together the right package

So in this tougher period what can brands do to keep people and other businesses coming back and spending? What is the key to customer loyalty?

Economists across the world swear by the same four-word phrase – ‘people respond to incentives’. Some are more obvious than others. Offering the right product, available quickly, and at the right price is one of the basics.

What must also be remembered is that all buying – online or on the high street, personal or business – is an experience. Make the experience a frustrating or unpleasant one and people will take their business literally, and virtually, across the street.

Social media has put more pressure on brands to deliver both the product/service and the experience. Pity the poor souls in charge of the big brand Twitter accounts when the ‘my nan is 85 and you have treated her appallingly’ tweets arrive on their timelines.

So let’s say you have got the basics right. The stuff is all in stock, the price is low or competitive, smiling staff are ready and eager to cater for the customers’ every whim. If that is the baseline what extra value can you offer over and above?

What do the customers tell us?

Love2shop is working with businesses across a whole range of sectors to help them improve customer engagement and, in turn, retain customers in a challenging environment. Love2shop offer a number of solutions that will incentivise customers to keep coming back time and time again.

In a major survey carried out by Love2shop, 13,000 people were asked about what they thought were the best rewards when it came to brand loyalty or moving to a new supplier. The results were no surprise. They revealed people love choice and they love gift cards.

It ran two polls across two months asking people to pick their ideal loyalty prize, and their ideal sign-up gift from a selection of popular rewards. Both showed a big preference for multi-retailer gift cards and discounts, with the former by far the most popular.

In fact, a whopping 76.6% of respondents said it was their favourite option. This was followed by 13% for discount on their next purchase with VIP experiences, upgraded memberships and merchandise all scoring in single digits. Read more about the poll on the original blog.

This explains the popularity of the Love2shop rewards and the Love2shop Engagement Platform offered by Love2shop to reward and incentivise both staff and customers.

Love2shop rewards can be used in around 150 retailers, including well-known brands such as Marks & Spencer, Wilko, Iceland, Matalan, Argos, Costa, Harvester, Tui and Jet2Holidays and many, many more.

For customers or employees, Love2shop rewards can offer a treat, or it can be invaluable for life’s essentials such as food and even school uniforms. When money is tight it can make all the difference to people.

Hard data shows incentives do work

Brakes is the UK’s number one wholesaler to the hospitality trade. It also offers food delivery services direct to consumers. In 2021 it forged what proved to be a hugely successful partnership with Love2shop.

Utilising both the expertise of the Love2shop team and the engagement platform technology, the Brakes ‘Help for Hospitality’ campaign was created and launched. The reward programme, delivered through the platform, offered Brakes customers a blend of discounts, cashback, charitable opportunities and Love2shop rewards.

Added to that, Love2shop provided strategic, technical, creative, and software support for the campaign. Love2shop provided the software to deliver cashback and also the Love2shop rewards to Brakes customers.

At that time, the UK was still only slowly emerging from the final pandemic lockdown. In this context the outcome of the collaboration was spectacular. It delivered what was described as “exceptional” growth.

During the five months of this specific campaign Brakes reported that 7.5% of sales came from new categories and products. Additionally, 20% of Brakes customers engaged in the Help for Hospitality. It generated more than 60% of Brakes’ sales revenue during the promoted period.

Help for Hospitality’s success was recognised when it picked up Best Channel Partner Programme at the 2021 Incentive Awards. This annual event recognises excellence in the reward, incentive, and loyalty industry.

Adam Heywood, Head of Commercial Marketing at Brakes, said: “The Love2shop team did a phenomenal job with the Help for Hospitality campaign.

“We’re incredibly proud to see that valuable work recognised by the Incentive Awards. I’d like to congratulate both our team here at Brakes and thank Love2shop for all their support.”

People do indeed ‘respond to incentives’. The data on that is irresistible. It is food for thought for those businesses selling directly to the public and those trading with other businesses. Increasingly, offering extra value to your customers is no longer just optional.

If you can see how Love2shop reward and recognition products could help your business, contact our business team today. Email [email protected] or call  0344 375 0739.

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Cost of living crisis hits consumer and business

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Cost of living crisis hits consumer and businesses 

We live and work in an integrated global economy. We enjoy the good times together and we all take a hit when the storm clouds gather. 

COVID-19, Brexit and conflict in Ukraine combined to create a perfect storm for both businesses and consumers. UK inflation stands at 9.4%, a 40-year high, and a cost of living crisis is upon us. 

This is often framed in the context of individuals. People struggling to heat their homes, pay rent and mortgages, buy food, fill their car with petrol and afford childcare. 

And this is also a crisis for business. This was summed up in June by Martin McTague, chair of the Federation of Small Businesses (FSB), who said: “The cost of living crisis starts with a cost of doing business crisis”. 

SMEs drive our economy  

Around 99% of businesses in the UK are SMEs (small and medium-sized enterprises) and there are 5.6m of them. They employ more than 16m people, 61% of the workforce. Their contribution to the national economy exceeds £200bn. 

According to the FSB, more than 400,000 SMEs disappeared during COVID lockdowns. Those that survived were just starting to put their heads above the parapet. Now they face fresh challenges. 

So-called producer price inflation, which includes input prices for firms, is up 22.1% over 12 months. Energy prices are soaring as are prices of raw materials. Supply chain constraints, made worse by Brexit, mean goods and raw materials are harder to get. 

A fifth of firms say input costs are their main concern, reports the FSB. It adds that many employers are struggling with labour and skills shortages. This was backed up by the Bank of England in July. It revealed two-thirds of companies were finding it “much harder” to recruit the right people. This further sends costs rising. 

Passing on the costs 

Higher costs, as well as hitting profits and investment, are eventually passed on to consumers. This pushes up inflation. Families face higher prices for essential and non-essential goods. Petrol prices and energy costs are soaring. 

And while people working from home may be able to reduce the cost of travelling to and from work, spending longer periods at home will push up their energy bills. 

The Bank of England will raise interest rates to combat rising inflation. This sparks a higher cost of borrowing for mortgage payers. It also means higher rents for those unable to get onto the housing ladder.  

However, people are finding they do have increasing leverage in the job market. And there is growing evidence they are prepared to use it. 

Workplace sees a seismic shift 

With labour demand outstripping supply, companies are offering higher salaries and more flexibility. COVID prompted a massive shift in the way we work. Post-COVID people are returning to their workplaces. However, millions still work from home either full or part-time. 

One recruitment consultant said earlier this year: “Prospective employees are looking more carefully at the culture of an organisation. More and more are looking for flexible/hybrid working… In the medium to long-term businesses need to change.” 

This is characterised as the so-called ‘Great Resignation’. It is a phenomenon that saw millions of workers quit their jobs during the pandemic. They left in search of a better quality of life. This exodus hit sectors such as hospitality particularly hard. 

Even before the pandemic, businesses were dealing with growing mental health issues. Stress-related absence costs UK employers £26bn every year, according to one estimate in 2019. 

COVID-19 worsened the problem. Data from Public Health England reveals the proportion of adults aged 18 and above reporting a clinically significant level of psychological distress stood at 20.8% in 2019. By April 2020 this had rocketed to 29.5%. Fewer people are now prepared to suffer stressful environments. 

Some employers respond by throwing money at the problem. They offer higher salaries and other financial incentives. However, smarter organisations recognise this paradigm shift demands a more sophisticated response. 

People want financial rewards but they also want to be valued in their work spaces. And they don’t want their jobs to take over their lives. They want more time with family and friends. Note the number of businesses now experimenting with four-day weeks. 

Value of incentives 

Love2shop reward products are available digitally or as a physical card and appeal to a wide audience. Recipients of the reward products can use them in multiple big-name UK retailers, including Sainsbury’s, Iceland, Heron Foods, ASDA, Primark, Boots, River Island and Argos. Consequently, recipients can use their reward gift for essential items or little luxuries. 

Building and timber supplier, Buildbase, is successfully rolling out a customer loyalty programme with the support of Love2shop. The programme incentivises those in the building and construction sector to spend more with Buildbase and in turn rewards its customers with Love2shop products. 

In hospitality, Love2shop provides an award-winning customer engagement platform. Food and drink supplier, Brakes, generated more than 60% of its revenues from their ‘Help for Hospitality’ programme during the period of the promotion. 

Additionally, in the finance industry, leading insurer, SunLife, uses Love2shop rewards to attract new customers and retain current ones. And in the healthcare sector, Love2shop reward products were used to recognise and reward care home staff during COVID-19. The full case study can be read here.  

Employers are increasingly taking the wellbeing of their people seriously, including financial wellbeing. Discount card schemes are just one way to help employees by alleviating some financial stress, which in turn, assists in overall wellbeing. Love2shop provides its employees with an ‘Everyday Benefits’ discount card, which helps cardholders to save money on day-to-day household expenses. It is also a product that’s proved popular with business too and many clients of Love2shop have implemented the Everyday Benefits card for their own employees.  

We are in the midst of economic turmoil and tough times are ahead. However, when the economic and cultural tectonic plates shift we discover new ways of living and working. Change is unsettling and also liberating. 

‘Our people are our greatest asset’ has been a mantra in the corporate world for two decades. Too often it’s an empty platitude. As we move into a new era, the companies that thrive will be those which make those words a reality. 

If you would like to discuss how Love2shop’s reward and recognition can work for your business, please get in contact.

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Customer Loyalty Programmes: The Ultimate Loyalty Guide in 2022

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Customer loyalty is more than just customers staying, and 2022 is a chance to build long-lasting customer engagement.

In 2021, we used to this blog to highlight why, despite the economic challenges of 2020 and 2021, customer loyalty actually wasn’t in trouble.

This year is even more interesting. According to experts from the utilities and insurance industry, as well as our own research into the broadband sector, it looks like customers simply do not want to switch. You can read more about that research and how to fight a sluggish acquisition market here, but today we’re here to talk loyalty.

While customers are less likely to switch suppliers this year, it’s not a time for loyalty specialists to relax. It’s a time to invest in building long-term, lasting customer relationships that secure revenue well into the future when the acquisition market picks up again.

A common and effective method for delivering that customer engagement is through a customer loyalty programme.

In this guide to customer loyalty programmes, we’ll explain their purpose, their impact, how to build a successful loyalty programme, and we’ll delve deeper into how else you can use the right rewards and software to build customer engagement and loyalty

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1. What impact do customer loyalty programmes have on retention and sales?

Studies by Bain & Company, along with Earl Sasser of the Harvard Business School, have shown that even a 5% increase in customer retention can lead to an increase in profits of between 25% and 95%.

As dramatic as that stat sounds, there’s more evidence that customer loyalty programmes impact on bottom lines.

Seven stats that show the impact of customer loyalty programmes:

  1. Loyalty leaders grow revenues roughly 2.5x as fast as other companies in their industries.
  2. 39% of loyal customers will spend more on a product, even if there are other less-expensive options available.
  3. 79% of consumers say loyalty programmes make them more likely to continue doing business with brands.
  4. 73% of consumers are more likely to recommend brands with good loyalty programmes.
  5. Adding a loyalty programme to an e-commerce platform can increase average order quantity by 319%.
  6. 15% of consumers are more likely to buy from a brand if they are part of a loyalty programme.
  7. Loyalty programme members spend 27% more when the brand establishes a positive emotional connection.

What’s wrong with loyalty programmes today?

61% of retailers cite customer retention as their biggest challenge (Retail Systems Research). In fact, it’s been estimated that companies could increase their profits by nearly 50% by retaining a mere 5% more of their customers.

So what’s the problem? Well, according to research from Edgell Knowledge Network:

  • 81% of loyalty members don’t know the benefits of their programs or how they can receive their rewards.
  • 32% of consumers see little or no value in being a member of their current loyalty scheme.
  • Only 40% are happy with the rewards that are on offer.

The stats show a disconnect between the potential and the reality.

Advocates are the customer retention end game

What you’re ultimately trying to create through your customer loyalty programmes is advocates. By advocates, we mean people who will speak on behalf of your brand.

The marketplace for any product is loud, crowded and full of other brands desperate for attention. It’s a huge help when your customers are enthusiastic enough to promote your brand to their peers or colleagues.

This is why it’s so important to invest in developing customers. They go from strangers, to customers, to repeat customers, to true believers. Once they’re emotionally and personally invested in your brand, they’ll promote you to their peers.

For loyalty programmes, this is now the benchmark. It’s what your competitors will be aspiring to achieve. Not embracing better customer retention schemes will eventually put you at a disadvantage.

2. What are the different types of customer loyalty programme?

If we’re speaking in general terms, there are roughly seven different types of loyalty programme:

1. Points

A simple transaction-based loyalty programme where points are assigned to purchases. Those points are exchanged for rewards by the consumer. They’re not the most innovative or exciting, but they are easy to introduce and build around.

They’re also the de facto basis for loyalty in many industries, such as the trade supply business.

2. Cash-back

Not dissimilar to the points-mean-prizes schemes we just mentioned, but instead of swapping their points for rewards, the customer earns a form of store credit.

3. Stamp cards

Everyone with a favourite coffee shop or sandwich house is familiar with the stamp card, or punch-card. The customer carries a card in their wallet, and presents the card when making a purchase. After enough purchases, the customer earns a free item.

4. Tiered

Tiered loyalty is where features, prizes, or access are only available to users with a certain level of spend. These programmes revolve around exclusivity, and are often deployed by brands with loyal audiences.

The users are signed up with free items, and eventually convert to paid customers as they move through the tiers. A similar concept is common across content production networks such as Patreon.

5. Coalition

A coalition scheme involves your business, and a partner business, signing up to run a joint scheme. It creates a closed loop for loyalty rewards, letting businesses enjoy collective success. The downside is that customers may redeem points earned at competing businesses.

6. Fee-based (premium)

Premium, fee-based loyalty programmes are about creating exclusivity, and delivering instant gratification for the customers willing to pay for it. It’s not for everyone – it’s a reward for the most engaged and enthusiastic customers.

7. Hybrid

One size rarely fits all, and you shouldn’t hesitate to mix and match elements from different types of schemes and combine them. In the end, what’s right for your customer base should drive the kind of loyalty programme you implement.

A more in-depth explanation of these different programme types is available here.

3. How to create a successful customer loyalty programme

It’s not possible to give you a step-by-step breakdown of how to build and implement a loyalty programme. Sight-unseen, we don’t know all the factors involved.

That includes your legacy programmes, the software you currently have in place, and what your programme objectives are. However, what we can do is offer you some best-practice concepts that apply to every modern loyalty programme.

Harness flexible technology

Having data is great, but the other half of the quiz is the ability to act on it.

Luckily, we have the luxury of working in an era where 3rd party platform and software providers have made it comparatively easy to be reactive and flexible.

Compared to when everything had to be developed in-house, that is. When assembling your loyalty programme and putting software and platforms in place, look for flexible and modular platforms that lend you flexibility in the future.

Make data your friend and ally

Data has changed how every business works, and loyalty programmes are no exception. Analysis plays a vital role in which customers you will choose to target most aggressively, how best to reach and engage them, and how to refine your loyalty programme in the future.

At every step, your decision-making process should be informed by inductive, but smart, analysis of the data at your disposal.

Keep up the communication

Constant communication is vital to maintaining engagement in customer loyalty schemes.

You don’t want to stray into the territory of being annoying and prompting unsubscribes or even customers leaving the system, so start as sparing as possible and use the data available to gauge the right balance.

Depending on the makeup of your audience you may try email, SMS, direct mailers, and possibly social media.

Refine the customer offering

In line with the emphasis on data and flexibility, be sure to adapt your offering to the customer. Respond to changes in your marketplace, changes in customer behaviour, or anything else that might affect how customers interact with your loyalty programme.

4. How to retain a customer for life

When we go to events, webinars or seminars about loyalty, a common refrain we hear is “loyalty is about more than points and prizes”. And they’re right.

Loyalty programmes are useful, they’re effective, and they will bring serious benefits to your company but you still have to nail the fundamentals.

There’s no loyalty scheme so good it can rescue a company that otherwise doesn’t get loyalty right. Here’s seven things you can do to make sure your customers stay in the fold.

1. Meet expectations, even small ones

Even small things add up when it comes to expectation – things that might not even necessarily be your core skills. Even something as small as a confirmation email not being sent after an order, or an inquiry call not being returned in good time, can be enough to cause a customer to think twice the next time they need your services.

2. Friction and frustration need to go

Patience is a virtue, but it’s not work putting your customers’ to the test. Companies like Amazon have set a near-impossible bar to meet for immediacy and convenience for the public.

It leaves other businesses with a significant challenge to meet with customer expectations about what’s reasonable and possible. We can’t all be Amazon, but we can give ourselves the best chance in a world of increasing demands. Depending on your business, that might include:

  1. Having a selection of payment options available
  2. Streamlining a support portal to minimise time spent looking for answers
  3. Improving search functions to find products or information more easily
  4. Investing in staff education and training to empower customer service
  5. Getting rid of hidden fees to avoid transaction abandons
  6. Clear stock levels on your website to avoid disappointment

When customers do get frustrated, they want to get in touch and talk about it. Which brings us to our next item.

3. Caring for customers is caring about loyalty

When your customers have problems and frustrations, then expect to be able to get in touch and get your help. Not only does that help need to be forthcoming, it has to tick the right boxes. Loyal customers are looking for customer service that demonstrates:

  • Competence
  • Knowledge
  • Coherence
  • Helpfulness
  • Empathy
  • Timeliness

Customers will forgive occasional frustrations if they’re met with the right customer service, but they will move on if they get the impression of indifference of incompetence.

4. Communication builds connection

While balancing it against the saturation concerns we discussed earlier, communication outside of your sales cycle builds connections to your company. Being proactive and positive about sharing updates, changes, or anything else that could affect your customer builds your credibility.

It also shows an investment in your customers beyond when they’re ready to make a purchase.

5. Fit into lifestyles and values

Consumers increasingly make values-driven decisions about which brands they buy from. In the long term, your brand will have to fit in with the needs and wants of customers whose buying behaviours will be driven by not just price, but by ethical and moral concerns.

No one is asking your to save the world all by yourself, but acting to minimise harm in the areas of the world your business affects.

6. Open up the two-way street

As we said earlier, customers want the chance to have their say. Make sure there are avenues available where they can offer their feedback or opinions. Crucially, also, make sure that you hear their feedback and act on it where possible. Then, as we said above, tell your customers about what you did.

7. Take control of your reputation

Your reputation on review sites like Trustpilot has become as important as word-of-mouth in today’s world. Taking control of that reputation, and having a proactive presence on those review destinations, is vital. We wrote more here on how you can do that.

5. Bring back customers that stray

Sometimes customers do leave, but when it’s not down to a catastrophic failure, you can always work to win them back.

Leave the door open

Understanding that a customer has made their choice, and allowing it to happen on the best terms possible makes it easier for them to come back.

While it’s always worth intercepting a leaving customer to see if you can solve their problem before they formally go, when the choice is made, diplomacy is the right way to go.

Look inside

If customers leaving is becoming a habit, then it’s time to act. Look at who they are, which products they’re using, and start proactively talking to that cohort.

Find out what’s happening in their market, or what competitors are doing differently, to arrest the trend before it becomes a crisis.

Tell them you fixed the problem

When customers are leaving, be sure to ask why. If the problem is inside your control, and affecting a sufficient number of people, it has to be fixed. Get back in touch with affected customers once the issue is resolved to let them know.

It gets rid of their initial objection, shows them you’re proactive about your products, and that your customer service is engaged.

Pick your targets carefully

Not every customer will come back, and not every customer is worth your pursuit. Use the information and data at your disposal to identify the most likely customers to return, and build your re-acquisition plans around that data.

6. Innovative customer loyalty programme examples

Some of the best loyalty schemes from around the UK, and what they’ve done that makes their audience so engaged.

O2 Priority

A cash-back and tiered system that amplifies user lifestyles

Video source: YouTube

O2 have been running their loyalty programme Priority, for more than ten years now. It runs as a counterpart to their O2 Rewards loyalty scheme, which focuses on giving consumers rewards in the form of airtime credit. Priority, meanwhile, focuses on exclusivity and lifestyle enhancement.

Members of the loyalty programme enjoy access to ticket sales, prize draws, educational experiences, vouchers for restaurants and cafes, and more. All of this is accessed through O2’s app, which lets users quickly and easily browse the prizes available to them.

Crucially, many of O2’s rewards are not linked to spend. They’re “always-on” rewards, available to the consumer at any time through O2’s app. These features have made O2 Priority a successful and rapidly-growing loyalty programme.

To compete with the success of O2 Priority, Vodafone have recently rolled out an AI-powered daily rewards service, VeryMe, to deliver personalised discounts and treats to their members.

What makes it work: Understanding their customers’ lifestyles, and enhancing those lifestyles through exclusives.

Tesco Clubcard

A successful evolution of the punch card into a points-driven reward and cash-back loyalty programme

Video source: YouTube

The Clubcard started 26 years ago, and one was among the first major supermarkets to use a magnetic-strip card instead of stamps. While the use of debit cards and credit cards was only starting to catch on at the time, it had a major advantage – simplicity.

Once the users have their card, they only need to scan it (or have it scanned) when making a purchase to accrue loyalty points. The points add up, and are cashed in for what Tesco call “vouchers”.  That might be store credit for Tesco, or something from their reward catalogue of VIP experiences, special gifts, and even holidays.

Clubcard sits nicely alongside any Tesco shopper’s lifestyle, works as a reward tool or a budget-stretcher tool for customers, and is almost totally unobtrusive to use.

The major benefit to Tesco, beyond customer loyalty, is greater input of data from their audience. While as a retailer Tesco will keep meticulous records of purchases, Clubcard customers’ purchases are tied to the demographic-related information.

That information gives Tesco much more useful data on who shops at Tesco, what they buy, how often, and when. All invaluable information for better serving the needs of their customers and, ultimately, keeping them loyal.

On the quality and scale of data they received after launching the card back in 1994, then Chairman of Tesco Lord McLaurin said, “You know more about my customers after three months than I know after 30 years.”

What makes it work: A simple, unobtrusive loyalty mechanic that delivers massive data benefits to Tesco

Starbucks

A points-driven system with premium flair

Video source: YouTube

As we said earlier, almost everyone who regularly visits a coffee shop has seen a punch card loyalty programme. Starbucks takes the punch-card concept, and adds a tiered loyalty system to a familiar process.

As a reward for using the app, or Starbucks card, customers are given “stars”. After saving up enough stars, the customer gets a free beverage. So far, so simple.

There is, however, a tiered element to the system. The lower tier, the “Green” level, is for customers who have made at least one transaction with Starbucks with their app or card. At fifteen stars, a Green member earns a free drink.

However, once a user passes 50 stars in a calendar year, they ascend to “Gold” level. At Gold, customers enjoy more than just free drinks. They earn free syrups, free whipped cream, free dairy-free milks, extra espresso shots, and more.

Starbucks’ customer loyalty programme has been a great success, offering a little exclusive treat to thousands of regular customers while feeding Starbucks plenty of data about their customers’ coffee drinking habits.

What makes it work: A simple app, using familiar mechanics, that makes VIP-tier loyalty accessible to everyone

If you take nothing else away, take this

Communication – Customer loyalty programmes, and customer loyalty in general, depend on great communication.

Flexibility – Consumer habits, markets, and technology change rapidly, making flexibility important for any customer loyalty programme.

Data – Not only is data vital to planning and deploying a customer loyalty programme, it’s a vital product of a successful loyalty programme.

Lifestyle – Fitting into your customers’ lifestyle is mandatory to bring users in and keep them engaged with a customer loyalty programme.

Over to you

Customer loyalty programmes are a vital tool to help you improve retention. That’s why we have a system that specialises in just that. That said, your customers need something to attach themselves to, something to be invested in.

Your business needs to turn itself into a company where customer loyalty is earned by your everyday behaviour, and secured with great rewards.

13,000 consumers can’t be wrong – We asked the public what kind of loyalty and sign-up gifts they want, and they want gift cards

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We recently polled more than 13,000 people in the UK on their ideal rewards for brand loyalty, or moving to a new supplier. The results confirmed what many Love2shop customers have been saying for years – people really do love choice, and they love gift cards.

We ran two polls, across a few months, asking people to pick their ideal loyalty prize, and their ideal sign-up gift, from a selection of popular rewards.*

Both of our polls showed a big preference for gift cards and discounts. But even with discounts on the menu, gift cards comfortably pulled ahead of other rewards in both surveys.

The results are below:

The ideal loyalty reward

Question: If a company offered you a gift for being a loyal customer, which gift would you prefer?

Results:

A discount on your next purchase 13.1%
A gift card for a retailer of your choice 76.6%
VIP experiences 4.7%
An upgraded membership 1.3%
Merchandise 4.3%

10,781 total answers

The ideal new customer reward

Question: Which of the follow is most likely to motivate you to switch to a new supplier of broadband, banking, utilities, or insurance?

Results:

A discount off your next bill 24.9%
A gift card for a retailer of your choice 48.8%
A dining out voucher 7.2%
A free takeaway 6.6%
A chance to win a holiday 8.9%
Attraction tickets 3.6%

3,264 total answers

What it could mean for you

The results vary between acquiring and keeping customers, but a gift card that gives someone a choice of retailer has come out clear winner on both polls. Even when options like discounts, holidays, and meals are on the agenda.

We can only make inferences on what that means for the public at large, but as we’ve pointed out before, the choice of retailer is a big part of the lure of the gift card. People like to be empowered to make their own choices, which may also explain why discounts did well. Ultimately that’s a bit of extra cash that consumers can choose how to spend.

Huge sums of time and money are invested every year on discounts, VIP experiences, or free takeaways. It’s possible that, while those rewards are being gratefully received by the public, customers would prefer to make their own choice with a gift card.

Far be it from us to tell you about your own customers, but the data speaks for itself, and speaks in plain terms. It’s plausible that you could be simplifying your rewards, saving money on them, and getting better results, by switching to gift cards or e-gift cards.

At the very least, there’s a strong case for re-examining what your company is offering for loyalty and acquisition if it’s not gift cards.

What’s next?

We’re still talking to the public every day on what they want most. Right now we’re asking about what they’d like as a reward from their company at Christmas. And so far, the Christmas party is out and a choice-driven gift card is in. We’ll have more updates on that soon, but for now, we’re here if you want to ask any questions. Feel free to get in touch if you want to talk about finding, and keeping, more customers for your business.

*These polls were conducted on more than 13,000 recipients of a Love2shop e-Gift Card over a seven-week period in 2021. If you’d like any more details on the polls, or even to talk about suggesting a question, get in touch. We’d be happy to talk.

News: People in the UK are itching to spend their money on making up for lost time

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According to research from Love2shop, people in the UK are most looking forward to spending their money on experiences, not things, as we ease out of lockdown.

Love2shop, with the help of polling agency YouGov, asked 2,020 people around the UK what they were looking forward to spending their money on as we ease out of lockdown. They overwhelmingly said that they’re excited about leisure, travel, and spending time with their family.

Travel in particular was a focal point, with a combined 49% of respondents saying they’re looking forward to travel in the UK, and 40% saying they’re looking forward to travel abroad.

Other popular activities include cinemas, visiting friends, and meals in restaurants. All activities we’ve missed out on over the last 12 months.

The top five activities the UK is most looking forward to spending money on as lockdown eases:

  1. Going on holiday (either in the UK or abroad) – 89%
  2. Having a meal inside a restaurant – 64%
  3. Travelling to see friends and family – 55%
  4. Visiting cinemas, spas, leisure centres, etc. – 44%
  5. Buying clothes in a shop – 34%

Written answers from the survey showed a similar pattern, with social activities being the most popular responses. The most frequent responses Love2shop received involved meeting friends, going to the pub, being able to be spontaneous again and, crucially, spending more time with their family.

In contrast, the public said that they’re least excited about going out to buy new tech and new cars in-person. Just 2% of women, and 6% of men, said they were looking forward to going out and shopping for a new car.

When it comes to technology, young people are slightly more enthusiastic about buying items like phones, laptops, televisions and tablets, with 13% of 18-24 year-olds saying they were looking forward to tech shopping.

However, even the youngest consumers’ enthusiasm for leisure, travel, and social activities dwarfs their interest in buying new tech. Across the board, across gender and age, what everyone’s looking forward to spending money on most is what they feel like they’ve missed out on over the last year.

While the results might be startling for the retail tech and auto dealer industries, other sectors will be delighted by the feedback. Restaurants, travel, and hospitality were popular across all age groups, and in-store clothes retail is in high-demand with women and younger respondents.

Going back to restaurants in particular is universally popular, with more than 60% of respondents, across every age group, saying they were looking forward to the return of indoor dining.

Reacting to the results, Director of Business at Love2shop, Frank Creighton, said, “The data from our survey clearly reflects what our clients and customers say – the UK is desperate to get back to what they’ve missed. The most interesting question for us is how we use the data to help our clients with customer acquisition and customer loyalty.

“When only 4% of the UK is excited to buy a new car in-person, we need to help auto dealers motivate people to go out and take test drives. And, when 64% of the UK are thrilled to eat and drink indoors again, we need to make sure it’s our clients in hospitality that reap the rewards of that with great acquisition and loyalty plans.”

All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 2020 adults. Fieldwork was undertaken between 21st – 22nd April 2021.  The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

How to attract new customers on the road out of lockdown

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The mid-April period is going to be an exciting time for the public, and a time of opportunity for business.

With shops opening, we’re expecting a lot of competition for the UK’s disposable income, and for the public to be excited to go out and do the things they’ve missed out on since 2020. Whether you’re a brick-and-mortar location re-opening, or an online retailer, you have a dog in the fight.

Physical locations will be looking to make a strong comeback and online retailers, whether they were digital-first before lockdown or not, will be looking to protect their gains over the last 12 months. It’s a challenge, but it’s one very few companies in the UK can afford to shirk away from.

Lots of experts in the loyalty and acquisition world will tell you that you’re better off looking for long-term changes. And to an extent they’re right, but long-term changes take time to kick in.

If you’re just focused on making the most of the next few weeks and months, here’s what you can do.

Run a promotion

You can offer discounts, 2-for-1 deals, or attach a reward like a digital or plastic gift card to certain purchases – whatever works for your business. It’s simple, but as our clients will tell you, it works.

Hundreds of our customers use Love2shop rewards to promote their products and services, and we often recommend that they focus not on the gift card itself, but all the possibilities the gift card opens up.

With the one multi-retailer gift card, you can offer your customers gifts from Argos, Currys PC World, and even holidays. Focusing on the outcome, and the experience that your customers will have with their reward, does more to motivate individuals than focusing on the gift or its monetary value.

Even better, a promotion is also the starting point of launching into a loyalty scheme to keep your customers once you’ve won them. We’ll talk more about that in another blog soon.

Be shareable

Aside from their fitness goals updates and park walks, it’s been months since anyone had anything decent to share on social media. Across Facebook, Instagram and TikTok, the content well has been pumped dry. That gives your company an opportunity – be shareable.

What looks good on social media affects consumer behaviour, to the extent that almost one in ten people surveyed have admitted to making purchases with their social media presence in mind.

Not only will offering something shareable get customers to think about coming to your company over your competitors, they’ll do a bit of your marketing work for you by putting your products in front of their friends. And as we’ll point out below, word of mouth matters.

Team up with your peers

As restrictions ease one at a time there will, temporarily, be a slightly unequal situation. Depending on what kind of physical space is available, and which restrictions are affecting their business, some companies will have an advantage over others.

For instance, a pub with a beer garden is at an advantage over a pub without one, in the near term. Working with your peers could be a short-term solution to this imbalance.

Take stock of what’s around you, whether that’s digitally or physically, assess who could complement your business (and vice versa), and reach out to talk about some cross-promotions for the next few weeks and months.

Get a grip on your reputation

We talked recently about how important online reputation is. Consumers are in the habit of checking sites before spending their cash, and they trust what they see on review sites as if it came from their friends.

That means the state of your Trustpilot page, or another review site of your choice, will have a direct impact on whether customers spend money with you while we’re easing restrictions around the country.

You can use our guide here to clean up your Trustpilot page for any recent negative reviews, but it’s also worth asking any current customers for their reviews to make sure there’s recent, positive feedback for your next customer.

Over to you

Attracting customers is about more than just making the most of the next few weeks and months. There are long-term improvements that every company needs to invest in to find new business, but right now we’re focused on how the maximise the benefits of the immediate future.

Redesigning your website, renovating your shopfront, working on your SEO presence, upgrading your services and products – if you haven’t done them by now, there’s no time to get them up and running by mid-April. That doesn’t mean you can’t maximise what’s possible to do now, though.

If you have any questions about setting up a sales promotion to bring some more customers into your business, just get in touch. We’re always up for a chat.

How we turn 1-star Trustpilot reviews into 5-star reviews

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Trustpilot, or the review site you rely on, is now an essential part of your company’s reputation management. And the stats say you don’t have the luxury of disagreeing:

  • 93% of customers check review sites before they buy from a company[1]
  • 91% of consumers trust review sites as much as they trust word of mouth[2]
  • Consumers read an average of 10 reviews before they trust a business[3]

Having a review site isn’t enough, though. It has to be manned, managed, and curated. Like any other digital outlet, consumers expect that you’ll be there for them when they talk to you, and what they see (or don’t see) on your Trustpilot page is a reflection of your business.

It’s is a chance for you to demonstrate a proactive, empathetic approach to customer service, giving your customers faith in your business before they even talk to you.

That includes knowing what to do when a 1-star review comes down the pipe. And no matter how good you are, the bad review will come.

In this article we’ll outline how to turn a 1-star review into a 5-star review, and how to make the most of the good reviews as well.

We wrote this article about Trustpilot, but the advice here is still relevant whether you’re using Google Reviews, Feefo, Birdeye and more.

How we turn 1-star reviews into 5-star reviews

Because we treat our Trustpilot page as a loyalty and acquisition tool, we have an internal process for dealing with all reviews that come in, including bad ones. Actually, especially the bad ones.

We start by making sure the user is in the right place.

Is the review legit?

The first thing we do with a bad review is assess whether the complaint is legitimate. This sounds simple, but it’s important – is the reviewer actually talking about your business?

For instance, you might manufacture tyres. And you may get a Trustpilot review talking about the quality of service they received in an independent fitter selling your tyres.

While their complaint is legitimate, the complaint’s place on your page isn’t. On Trustpilot, you may apply to have the negative review removed on the grounds that it’s not about your company. It might seem harsh, but we’re talking about your company’s reputation.

If it’s a legitimate review, you can move to the next step of the plan.

Dealing with a legitimate bad review

First, check if the user has left their name, or their business’ name.

If they have, connect the name to information in your database, or customer relationship management (CRM) software like Salesforce. If you don’t have a CRM system in place, you can go to your sales or account management team and ask about the customer.

Find more information on the complaint, bug, or delivery issue the customer is experiencing. Armed with this information, you can make an attempt to resolve the issue.

While you’re doing this, be sure to leave a sympathetic reply offering the unhappy customer a chance to get in touch and resolve the issue. Whether they initiate contact in reply, or you get in touch later, it’s important to be seen to engage with bad reviews. We’ll explain more about that later.

You know better than we do on how to talk to individual clients, but in our experience a negative review is often an act of frustration. And it often comes from a sense of not being heard. Opening dialogue is the first step to alleviating that frustration and finding a happy outcome.

With your internal team, and your client, you can find out what the issue is and implement a solution.

Approach the reviewer

Once the issue is resolved, and the customer is happy again, you can talk about their review. Ask the client if they’re otherwise happy with your service, and if they are, ask if they would consider changing (or removing) their negative review.

Precisely when you do this depends on the scale of the problem resolved, and the quality of your relationship with the client – you and your team will know best on this front.

But if our experience tells us anything, a happy client will often be amenable to changing their review. Especially when asked directly – they’re no longer talking to the faceless review site, they’re talking to a human being who has gone out of their way to resolve a problem for them.

When you don’t have the details

Your reviewer might have taken pains to stay anonymous, or you might not be able to match them up to a contact in your CRM system. It happens from time to time.

You should still leave a reply and invite the customer to talk about the problem they’re having. With a bit of luck, they will get in touch and you can resolve the problem with the same process we outlined earlier.

But even if they choose not to get in touch, leaving a reply is better than letting it fester unchallenged. As we pointed out earlier, it’s there for benefit of the next customer that comes along to the page too.

Being engaged and energetic about your review page shows readers that your customer service is proactive and interested. Combined with a high review score, it helps you build confidence in existing and prospective customers that you’re a quality provider.

Tips on leaving a good reply to a bad review:

  1. Be courteous. Not quite formal, but polite.
  2. Be human, using their name if it’s supplied, and using straightforward language.
  3. Express that you’re sorry the customer is having a problem, but don’t apologise or admit blame in your reply.
  4. Offer to help, and leave them with a direct way to get in touch.
  5. Sign off with your own name and title, not the company’s name.

What to do when someone leaves a good review

It’s not all rainy days!

You’re good at what you do, your customers know that, and they’ll express that in reviews. There’s no shame in shamelessly making the most of the good news when you get it.

Here’s how to get the most out of a 5-star review.

Reply to the review

Just as you would for a negative review, get back in touch to thank the user for taking the time to leave positive comments. For all the reasons we’ve already discussed, this is important.

Keep track of them

It pays to start keeping a document of your positive reviews as soon as possible. When you want to draw on them later, it’s much easier to search through an Excel sheet than use Trustpilot’s user interface.

Getting into the habit of logging them pays off down the line when you need information in a hurry. Especially when you want to find one quickly by client, sector, time, or content.

Use them externally

As a review left on a website is in the public domain, you’re free to use a good one to promote your business. That said, we would recommend asking clients for their permission if you want to alter the review.

That would include using it as part of a brochure, adding them to a testimonials section of your website, or using them for your marketing material. And you will want to use them.

A good review from a major client makes for excellent social media content, something to drop into your newsletter to clients, and something you can include on promotional material when prospecting new customers.

Don’t be shy about tooting your own horn when your clients are raving about your company.

Share them internally

If a customer names a specific employee in the review, be sure to pass the review on to that person in recognition of their work.

Or, if the review highlights a particular product or service, let your internal teams know how the end-users appreciate their work.

While doing this, it’s worth CC’ing leadership figures in, so that managers can chip-in with their own recognition, and to make these success stories as visible as possible.

Over to you

Regardless of the review site you use, these simple steps help you turn a Trustpilot page into a legitimate part of your loyalty and acquisition strategy.

If you want to talk about anything else your company can do to bring more customers in, and keep the ones you have for longer, just get in touch!

Could screwing up, and making it right, be the best thing you do for customer loyalty?

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It sounds like a joke, right? Why would anyone be more loyal to a company that messes up, even if they make it right later on?

Many people out in the world would agree – once trust has been damaged once, you’ve made a permanent and indelible mark on your reputation with a client, shifting the balance of your relationship for a long time.

Well, that might not be so. In fact, many have claimed for years that recovering after a fumble may improve your relationship with clients. It’s a theory called the service recovery paradox.

There’s always been a bit of debate about just how much of the phenomenon is fable and how much is fact, but a recent meta-analysis in the Journal of Service, taking in data on the subject from a wide range of sources, gave us some interesting results.

The paradox explained

Sometimes, your service fails beneath where customers think your service level should be. This could be down to a variety of factors, some of them inside and outside of your control.

First, the company has to fix the problem, restoring service to at least to the level before the failure occurred.

Once the service dissatisfaction is gone, the company can build trust, and build the perceived value of the company according to customers. For some clients, this will make them see your company as more valuable to them than they did before they experienced a dip in service, and be more loyal to your company. In turn, increasing their value to you as repeat customers.

That’s the claim made by the service recovery paradox.

Reality bites

The findings of the study we cited above and others, unfortunately, found that while they could find evidence of the paradox working, it’s not something you should bank on.

Both the meta-analysis, an inductive analysis of all available information to the researchers, along with previous studies, paint a tenuous picture for the customer recovery paradox, with too many contingencies and moving parts to be considered reliable.

A previous study from Mangini found that the customer service paradox relied on:

  • Customers having not experienced previous service failure.
  • That the service failure was not thought of as severe by the customer, and;
  • That the failure was largely out of the company’s control.

Even when these criteria were met, and this effect is produced, the meta-analysis found that the paradox did increase satisfaction somewhat, but didn’t impact buying intentions, word of mouth behaviour, or the brand image.

However – you still have to recover that service. Like many of the things we talk about on this blog, there’s no silver bullet out there, or in this case a convenient paradox to make it easy. But keeping customers in the fold is more important than ever, and paradox or not it’s important to get a grip on it.

Service failure and recovery is a bit of a big subject to get into here, but there’s three big things you can start thinking about this week now to make it easier.

Making amends

Words and demeanour

Too often, companies scramble to offer effusive apologise and prostrate themselves on the good will of their customers. They believe that one mistake, even if they recover from it, should be treated as fatal.

The result is customer service teams that flail from one crisis to the next. Treating every small fire as a towering inferno, and passing that sense of insecure panic on to their customers.

Knowing that your own mistakes aren’t the end of the world, and that for some customers they might even be made happier than when they initially complained, should change the mind-set to helping unhappy customers.

Approach the situation with confidence that you’re a quality provider, that you’re in control of the problem your customer has, and that you can fix it and make amends for the inconvenience. And equip your staff to carry that into their interactions with customers.

Access and actions

Your company needs dissatisfied customers talking to your recovery staff. This is to demonstrate as early as possible that you’re in control, that you can make the problem right, and that you can make repair the problem.

Service recovery hinges on being able to talk to customers, and vice versa. Customers can talk amongst themselves, they can quietly leave, they can even complain on public forums like Trustpilot.

You can try to intercept as much third-party negativity as possible, but your service recovery effort is only effective when you’re in direct contact.

That means having clear, well-signposted and well-maintained channels for complaint, manned by knowledgeable, conscientious employees. Not having these in place makes it impossible to run effective service recovery, and takes the idea that customers will be more loyal to your company, regardless of any paradoxes, off the table.

Amends

Rewards make excellent service recovery tools, particularly when dealing with individuals’ complaints. Over a long period, an occasional cash-value reward as a sign of gratitude or, sometimes, apology is a great investment. It’s a relatively small outlay for you but isn’t easily forgotten by customers.

This is particularly effective when you can personalise how you reward. It’s not practical to try and warehouse a gift fit for everyone, so it’s most likely that you’ll be using a multi-choice product like a gift card or reward code. You can’t “personalise” the gift itself, but you can personalise the message around it.

For instance – if you know a customer uses your insurance company to insure a vintage vehicle, you can deduce they have a passion for cars. While you’re delivering them a reward, it might be prudent to point out the customer can enjoy their gift at a track day.

You’re not just showing that you’re reticent about a service failure, you’re showing that you see and appreciate that there’s a human being behind the account number and complaint.

Summary

If you’re not sold on the science when it comes to the service recovery paradox, you’re not alone. There’s definitely more research to be done into the phenomena, but it’s an idea worth talking about.

However, regardless of your opinion on customer service phenomena, service recovery should be a priority. Especially as the world heads into uncertain economic times – money and time spent keeping customers now is money exceptionally well spent.