28.03.2011 9510

From discount to bonus

The average Muscovite, according to RBC, has at least 10-15 discount cards of various stores in her wallet. And the owners still think that their discounts can make customers loyal: it is enough to issue this card and people will return to them again and again. However, as practice shows, fidelity does not depend on numbers. What loyalty mechanisms are replacing discount systems? Is there some way to make traditional loyalty cards work more efficiently? Anna Komissarova was looking for the answer to this question.

SR71-Sales-bonus_2.jpgFrom sweets do not become kinder

Who does not have a discount card, let him be the first to throw a stone at me. And when their number approaches the deck of cards, consumers begin to take the discount for granted, stores become like lovers without memory henpecked, who give gifts to the lady of the heart so that she simply does not stop paying attention to them, and in order to keep up with competitors.

And more recently, the creators of discount cards thought that the cards will perform other tasks, namely, to attract and retain the most profitable customers. It was planned that the cards will become the seed of the loyalty program. It turned out - as always. Cards began to be dealt to the right and left, and with almost the same face value. Despite the popularity of discount programs, most experts now agree that a discount is not a guarantee of building a long relationship between a customer and a store, because discounts, if they create loyalty, are only for rewards, but not for the player who offers them.

So, 20% of respondents are absolutely ready to postpone the purchase in the absence of a discount card with them. At the same time, 40% of respondents are ready to postpone the purchase if the discount amount provided by the discount card is significant.

King Solomon's Syndrome

These findings have led to a rethinking of loyalty programs by virtue of increased value to customers. Bonus cards began to replace discount cards. In this case, bonuses can be in the form of prizes from partner companies, or in the form of an accumulated discount, or a gift from a “native” company. The most important thing is to offer prizes that are interesting to the client.

Bonuses were considered a more effective tool to increase loyalty than discounts, since the market is oversaturated with discounts, and consumers will be more interested in the gaming moment: accumulating points and receiving prizes. Moreover, the consumer spends more and more often to accumulate the missing amount of bonuses.

The difference between the discount and the bonus is that the discounts are perceived by the consumer as a contribution of money to an already made purchase, and the bonuses are perceived as an investment in the future, which makes sense to make by returning to the same store. In the case of a bonus, the perceived value of the product or service increases. However, the use of such a discount structure requires more attention from store marketers. Incorrect calculations can lead to the fact that many customers quickly gain the opportunity to receive a significant discount, and the outlet begins to suffer losses. Also, the use of the bonus system is fraught with the admission of some serious errors: setting too high prices for goods that can be obtained in exchange for bonuses; offer uninteresting bonus prizes that do not stimulate buying activity.

If the bonus program is inadequate to the requirements of customers, this will lead to their disappointment: the customer will know that he cannot count on a discount in this store, and he will not want to make purchases for the sake of mythical bonuses. Another mistake when introducing bonus systems: the complexity of the program, when the buyer can not clearly understand how many bonuses he will receive for a particular purchase and how he can spend the reward.

Discount programs in the store: discounts vs. bonuses

pros

Cons

Fixed discount

No need to set thresholds for changing the size of the discount
· Universality of methods applied to the client base
· In the case of a small amount of established discounts - the ability to attract more customers

· Lack of a mechanism for building long-term relationships with a client


· Similar offers from competitors and lack of individuality of the program

Accumulative discount

· Ability to retain a customer seeking to receive a greater discount

· The ability to segment the customer base and the formation of various methods of building relationships with customers of various types

· Getting more information about customer behavior

· The need to process more data

· Setting incorrect discount thresholds can lead to financial losses for the company
· Great demands on the capabilities of automation systems

Personal approach

What can the retailer offer the client so that the latter makes a choice in his favor? The time of price wars passes, the service cannot be improved indefinitely, there remains a transition to personalized relationships with your customers and their customization. This is the loyalty program. A discount system without customer feedback is not a loyalty program. The client is given a discount depending on whether he has a discount card, and not depending on his loyalty to the seller. A consumer may have dozens of discount cards, but this does not testify to his loyalty to these companies.

Card programs are improving towards personalization. The name of the plastic card holder is used not only during mailing to contact the customer by name, but also to identify the client profile and optimize the messages sent to this profile. In addition to newsletters, companies have the opportunity to conduct personalized surveys and receive analytics on customer card holders. An ordinary store through its own system can only find out how customers behave on its territory. He gets a whole focus group: there is an opportunity to track the behavior of new and regular customers, the motives of their purchases, and the dynamics of both of them allows you to evaluate the effectiveness of promotions.

However, improving the card system without expanding the staff and introducing appropriate software is difficult. In order to track partners, collect reports from them, constantly remind them of discounts, a whole department is needed. Companies rarely go for this, as a rule, there are not enough resources, the system gets out of control and gradually dies.


Dead end is not coming soon

Among other things, there are many unresolved problems in the development of loyalty programs, primarily legal ones. The legislation does not sufficiently take into account the marketing needs of enterprises, the issue of the amount of the discount provided is poorly worked out. The tax authorities can initiate an audit if the discount exceeds 20% of the average market price, the company will have to prove that this was caused by marketing policy. Another problem is lack of experience, which leads to an inability to organize an effective campaign to inform consumers about existing programs.
There are few companies involved in the development and implementation of loyalty programs. There are enough fingers on one hand to count those who offer truly high-quality products in this area. For the most part, it all comes down to the issue of discount cards and prizes. Creating a loyalty program involves a marketing and technical component, which means that the developer must be competent in marketing and technology.

According to RBC, the average Muscovite has at least 10-15 discount cards in a variety of stores in her wallet. And the owners still think that their discounts can make buyers ...
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