Tesco and Co-op, the Relevance of Loyalty Schemes

Résumé du document

Postmodern age brings in new opportunities and opens new marketing frontiers. Retailers in different countries successfully use the benefits of loyalty schemes to attract new and retain the existing customers. Loyalty schemes have already become the definitive feature of marketing in different areas of business activity. Retailers are particularly interested in and use loyalty schemes to expand their market presence. Unfortunately, most retailers hold many misconceptions about how loyalty schemes work and what effects they produce on performance. More importantly, retailers fail to recognize that loyalty schemes alone cannot attract and retain their customers. In the context of direct marketing and the benefits which loyalty schemes offer to retailers, it would be fair to say that loyalty schemes are not effective tools for attracting and retaining customers by themselves, rather, information of the customers and their needs can serve as an effective solution to customer retention issues and can help retailers to better satisfy customer needs.

Extraits

[...] Pearson Education Foss, B. & Stone, M. Successful Customer Relationship Marketing: New Thinking, New Strategies, New Tools for Getting Closer to Young Customers. Kogan Page Publishers McCorkell, G. Direct and Database Marketing. Kogan Page Publishers Papworth, J. “What Price Loyalty?” The Guardian. The Guardian April 2005. Web March 2010. [...]

[...] Although loyalty schemes at Co-op are among the most effective in the present day retailing market, there is still much room for improvement. and Co-op should take its chance to retain the existing and to attract new customers. It is important that all loyalty schemes are designed for one specific purpose. In present day retailing markets, where loyalty schemes serve an effective method of gathering information about customers (McCorkell 104), retailers often view loyalty schemes as a universal source of universal benefits. [...]

[...] Co-Op: The Relevance of Loyalty Schemes Introduction Postmodern age brings in new opportunities and opens new marketing frontiers. Retailers in different countries successfully use the benefits of loyalty schemes to attract new and retain the existing customers. Loyalty schemes have already become the definitive feature of marketing in different areas of business activity. Retailers are particularly interested in and use loyalty schemes to expand their market presence. Unfortunately, most retailers hold many misconceptions about how loyalty schemes work and what effects they produce on performance. [...]

[...] The perceived value of benefits for customers must be high enough to make them interested and, as a result, to stay with the program. Tesco, with its emphasis on intangible and non-monetary rewards, obviously overweighs Co- Op. These benefits are unlikely to lose their attractiveness in the short and long run. Second, loyalty schemes should reasonably balance soft benefits with the hard ones: those who limit their loyalty schemes to hard financial rewards should realize that their loyalty programs are doomed to a failure customers will leave as soon as they perceive that the competitor provides better monetary incentives. [...]

[...] As a result, more and more companies engage in the development of loyalty schemes to attract more and to retain the existing customers. A loyalty scheme is a “marketing program designed to enhance brand loyalty by cultivating an ongoing relationship between a marketer and his customer” (Fill 100). In other words, a loyalty scheme is a series of steps and actions designed to attract customers and to make them purchase more. In most cases, customers participate in loyalty schemes to accumulate points for their purchases and to later use these points to access various rewards. [...]