Do loyalty programs actually save you money?
82% of us have them. You can’t go to the local supermarket without being asked for one. So, has anyone ever actually done the maths? Do loyalty programs and loyalty cards actually ever save us money, or do they just tap into our psychology and encourage our spending while delaying consumer guilt?
It’s so easy to fill your wallet with loyalty cards. You spend over a certain amount, and leave the store with two pairs of jeans and a brand new card, which you are assured with revolutionise your shopping experience. I had a blow-out at Priceline a couple of months ago and was given a loyalty card to assuage my guilt.
Unfortunately, I haven’t been back since so the card just flounders in my wallet, unwanted and unused.
Having said that, some people swear by them. A work colleague assiduously puts all her purchases onto a certain credit card and funds all her overseas travel with it. A friend of mine gets David Jones vouchers, allowing her to buy the nice dress she needs for a wedding or a new piece of equipment for the kitchen.
I must have ten coffee cards in my wallet. Often they lie forgotten, but sometimes they have the opposite effect on me where I buy more coffees just to get to the free coffee. Which leaves me to question whether or not they save me money or just encourage extra spending.
The blogosphere and those in the know suggest that loyalty programs are good things, as long as they are used in a disciplined manner. If you’re doing extra shopping because you’ll get a loyalty program discount, then it might be time to let the program slide because you’re not saving anything. If you are just using it for purchases you would have made anyway, then you’re probably getting a pretty good deal.
From a business side of things, brands expert Kaleidoscope suggest here that loyalty programs may not be the best counter to declining custom in a recession. Simply put, if you’re loyalty program fulfils customer expectations, a loyalty program could increase your business. If you fail to fulfill expectations, a loyalty program is likely to alienate customers for a substantial period- a death knell in business speak.
Steve McKee from Business Weeks suggests that there are differences in how you relate to a company; sometimes you interact with loyalty, which is where you use the company solely for the rewards. Sometimes you interact with a business with what he terms equity, where you would use the company irrespective of whether they offered any benefits. It’s an interesting concept. McKee argues that equity is more important for businesses and customers, and that loyalty programs have been overemphasised in recent years.
So do loyalty programs save you money? As a consumer, if you use your loyalty program well, then it will save you money. Do loyalty programs make you money as a business? The jury is still out. The best way to save yourself some dosh is to research loyalty programs and join up with the ones that suit your spending patterns. http://www.perkler.com/ is the best resource online for that information. You can search for loyalty programs that suit your buying patterns or powwow with other loyalty programs addicts.
Ninemsn have a list of what they think are the best loyalty programs here.
What loyalty programs do you rank as the best?
Interested to know whether you think they are a waste, good for the old piggy bank or perhaps just a marketing gimmick?
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