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Loyalty’s Sore Point – Why 3 million customers don’t spend their points – and what retailers can do to help.

Rebuilding loyalty is one of the biggest challenges for retailers in post lockdown times. Consumers still love points-based loyalty systems but are they still fit for purpose?… View Article


Loyalty’s Sore Point – Why 3 million customers don’t spend their points – and what retailers can do to help.

Rebuilding loyalty is one of the biggest challenges for retailers in post lockdown times. Consumers still love points-based loyalty systems but are they still fit for purpose? Here, founder of innovative new loyalty app Swapi, ex-Harrods and Harvey Nichols’ Pete Howroyd, reveals the hidden problem of unspent points, and what businesses can do to solve it.

The challenge of unspent points and point redemption:

There’s no shortage of customers signing up for loyalty programmes – 77% of the UK adult population are members of one, according to recent research. So why is it 3 million of them don’t bother claiming any rewards? The average person sits on £47 worth of unspent points in their wallet – a figure that equates to £6bn of unspent rewards in the UK and over $360b worldwide? Can you imagine what a boost to the economy that would be if everyone started redeeming all of their points?

We know that customers still love points-based programmes. They are easy to understand and create a tangible value exchange. Brands like them too, as a highly effective way of driving frequency, a measurable ROI, and customer lifetime value. But engagement is clearly a big issue. It’s not really surprising, given that traditional loyalty programmes have suffered from a lack of customer-centricity or innovation for years. But brands can make positive changes to tackle this problem though. Here are my top five tips.

  1. Keep point expiration front of mind

Plan for points expiry and encourage customers to ‘burn’ their points, ideally personalised to their preferences and shopping behaviours. Some brands offer to reinstate points for a fee, others have detailed expiration policies. United Colors of Benetton went one step further, creating a survey asking members why they hadn’t redeemed loyalty points, and how they could do better.

  1. Offer experiential rewards over cashback

Create an ‘earn & burn’ programme that allows customers to redeem loyalty points for products, promotions and experiences rather than traditional cashback systems. We are seeing more companies building experiential benefits into their loyalty programmes which is important for building the more emotional side of customer loyalty.

  1. Enable ethically-driven points redemption

Charity or community-related rewards drive more emotional relevance and align your business with your customer’s values. This is also a great way to support local causes and use charity budgets, bringing customers on the journey with you.

  1. Create emotional and functional benefits 

Build a reward system with emotional and functional benefits including events, personalised offers, gamification and services like ‘book & shop’. Sparks is a great example with over 7 million members, as is My John Lewis, which has focused on surprise-and-delight treats and events to build a brand experience for shoppers.

  1. Increase engagement by offering more flexibility

Allowing shoppers to swap points easily between multiple brands is a huge selling point for a loyalty programme, as the potential for fun and engagement grows significantly. Swapi is leading the way, transforming the traditional relationship customers have with loyalty. This is an app that makes the experience of spending rewards active, promoting the earning of points that can then be spent on a larger catalogue of rewards.

To sum up: don’t let customers sit on their points

Loyalty programmes are worth the investment. When done well, they have the potential to drive real business value, from the rich customer data they provide to their ability to influence customer behaviour, frequency, customer lifetime value, and brand advocacy over time.  However you decide to keep people active in your loyalty programme, ensure that the experience for the customer is clear, simple, and feels like a fair value exchange. Think about what your customers want and how to improve customer-centricity with better engagement, flexibility and an exciting and emotionally rich experience.

Swapi is a start-up tech company aiming to change the game in Loyalty. Set to launch in autumn 2021, the Swapi mobile app is an industry-first ‘digital wallet’ that will transform the way loyalty rewards are earned and spent for both brands and consumers. 

The business recently smashed its £300k equity crowdfunding target on Crowdcube just hours after going live.


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