A loyalty scheme is offered by a company to their customers who make purchases, this is to ensure that those customers keep on returning. A loyalty scheme is there to make the customer feel like they are important, and rewarding them with gifts, special offers, discounts or a points prize often brings them back. The most recognisable loyalty schemes fall with Boots, Tesco and Sainsbury's, but it's more often than not that a company will have a loyalty scheme.
However, in more recent news the popular ASOS "A-List" loyalty scheme has come to an end after 3 years. The scheme was a membership points scheme which used 'tiered levels' to encourage consumer spending. When joining you were automatically at entry level. After this you were be able to earn points and A-list vouchers. The more points you earn the higher the level and the better the rewards. It was five points gained for every pound spent, so it was earning £1 for every 100 points collected.
So, why didn't it work for them?
Loyalty schemes are not the only reason that audiences return. It can be customer service focused, and ASOS have recently been in the news about bad customer service towards celebrity Lucy Mecklenburgh. Lucy reported that she was banned from the site after complaining about a missing parcel to which the brand replied, "It's very rare for items to go missing and ASOS have therefore made the decision to not accept any further orders from you". ASOS have since apologised and unlocked the account after the ordeal was shared on social media. Although this is not the sole reason for people not staying engaged with the company, instances like this can also be a factor – especially when it's a problem promoted by someone in the public eye.
What are they doing right?
One thing that they are doing right, and that many other companies are now following is the Premier Delivery Option where customers can pay a mere £9.95 for a year of next day delivery, with no minimum or maximum value. Imagine ordering something, trying it on and being able to send it back within a day. Knowing people who are part of this scheme have only had good things to say about it.
With the prominence of fast fashion premier delivery services have become more popular and convenient for audiences. It will soon see other brands follow suit.
It seems that with this now it takes more than perks and points to keep long-term customer loyalty.
Good customer service and quick delivery seem to be at the top of the list. According to an article in the Independent (Independent, 2018 Most millennials only purchase items with online reviews, Astrid Hall) Millennials are more incentivised to make an online purchase when the delivery is free, and that all consumers want instant delivery.
Also, ASOS have said to stay posted as they are working on something else to reward their customers for being loyal, so I guess time will tell. But wiping the slate clean and starting again is a brave move, but if it pays off then why not?
What can I do better?
- Try and improve your customer service, incentivise and recognise your employees. Happy employees = a good service!
- Think of different ways to ensure loyalty among your customers. E.g. Awards ceremonies, Gamification.
- Know your audience!
If you have any questions about loyalty, motivation or recognition then get in touch here: email@example.com