The Clubcard will be phased out over a period of months although customers will still be able to redeem their points up until February 28 2009.
The retailer said that the Privilege Card will enable it to provide its customers with extra benefits and email offers, including an introductory email with £20 worth of vouchers, at least £10 worth of vouchers each month and exclusive discounts.
Existing Clubcard members will receive an email inviting them to open a Privilege Card and it will be promoted to potential new customers in store and with point-of-sale activities.
WH Smith introduced its Clubcard in 1997 offering 10 points for every £1 spent but had to conduct a comprehensive overhaul in 2003 after admitting that it was difficult to understand and not generous enough to high-spending customers.
The retailer simplified the scheme by awarding one point, rather than ten, for every £1 spent, bringing it in line with other loyalty card schemes.
It also offered customers spending £150 a year in WH Smith £20 worth of discounts compared with the original £3.
Comments
So long loyalty schemes in your current and outmoded guise, here's wishing you a happy retirement at the Green Shield stamps rest home, sipping your Cinzano with Leonard Rossiter and planning long drives in the country in your Austin Allegro. We'll miss 'ya (not really)...
"So long loyalty schemes"? I'm sure Tesco will be closing their 'unsuccessful' clubcard loyalty scheme immediately based on this news and your shrewd analysis of the situation.
Good loyalty initiatives can deliver relevant, surprising, brand-enhancing experiences. Oh and revenue, too. They are arguably more important and relevant than ever before in this promiscuous consumer age.
Bad ones - usually conceived and run by non loyalty experts who think it looks easy - deserve to fizzle out ignominiously.
But don't tar them all with the same brush.
Actually Damien, you make a good point. As it happens I wasn't talking about Tesco (although that's a separate isue - Who's being loyal - the consumer to the business, or vice versa). However, there are loyalty schemes where the redemption rates versus customer satisfaction don't stack up. How many people actually use their points instead of doing nothing with them. I was looking at it from the perspective of the consumer, where the 'revenue' is of little value. Perhaps that is why WHS have changed, and time will tell if their new approach is beneficial.
ALL Loyalty schemes have customers for whom they mean very little. That's because 80% of any business value is driven by 20% of customers and if you can make that 20% happy and engage a few more, then that's a job well done. Some customers like to go online, but the majority still prefer paper vouchers and paper gift vouchers (rather than the chip and pin gift cards). Business decisions to go online can be as much about commercial cost cutting and business benefit as customer preference. In terms of unused points, most decent loyalty programmes contact 'inactive customers' to remind them of their points. For points outstanding of many years, there are often reminder programmes and then charity schemes to allocate these. The larger majority of any voucher reward mailing is redeemed within 2-3 weeks. The footfall instore in phenomenal. So, yes, people do redeem points in their millions. And Austin Allegro's are retro chic!
I know you weren't taking about Tesco's clubcard Julian, which is exactly why I mentioned it!
As I say, bad schemes leave the customer dissatisfied and the business counting the cost of unredeemed points. Whether offline or online.
Good loyalty schemes today are not 'me too' points programmes. They deliver the brand experience in relevant, unexpected and motivating ways, that enhance and enrich the brand interaction for the consumer. They give the customer real value - whether that's rational discounts or offers, or, increasingly, intangible, feel-good, brand-led rewards. And they give the business increased revenue through frequency lift, up-sell and cross-sell.
For me, the key here is the brand and what it means to your customers. A good loyalty initiative will identify what the brand can uniquely deliver to that audience and then deliver it. Perhaps the WHS problem is that they don't really have a strong enough brand relationship with their customers? Rather than tinkering with an uninspired programme, perhaps they need to get back to the drawing board and design a scheme that reflects their core brand values.
Also, Green Shield stamps were fantastic. Interactive, involving, tactile. Could be time for a come back surely? A sort of anti-digital, back to simplicity, movement.
Lets not forget the other reasons for the loyalty cards. Tracking customer purchases and tracking the buying behaviour is immensely valuable. What products are selling when. Customised communications, specific to the individual consumer and lots of valuable data. All from a loyalty scheme.
What happens if the customer doesn't have access to email...? Admittedly the vast majority do, just a thought. Ad
Comments
Julian Wakeley - 19/08/2008
So long loyalty schemes in your current and outmoded guise, here's wishing you a happy retirement at the Green Shield stamps rest home, sipping your Cinzano with Leonard Rossiter and planning long drives in the country in your Austin Allegro. We'll miss 'ya (not really)...
Damien Parsonage - 20/08/2008
"So long loyalty schemes"? I'm sure Tesco will be closing their 'unsuccessful' clubcard loyalty scheme immediately based on this news and your shrewd analysis of the situation. Good loyalty initiatives can deliver relevant, surprising, brand-enhancing experiences. Oh and revenue, too. They are arguably more important and relevant than ever before in this promiscuous consumer age. Bad ones - usually conceived and run by non loyalty experts who think it looks easy - deserve to fizzle out ignominiously. But don't tar them all with the same brush.
Julian Wakeley - 21/08/2008
Actually Damien, you make a good point. As it happens I wasn't talking about Tesco (although that's a separate isue - Who's being loyal - the consumer to the business, or vice versa). However, there are loyalty schemes where the redemption rates versus customer satisfaction don't stack up. How many people actually use their points instead of doing nothing with them. I was looking at it from the perspective of the consumer, where the 'revenue' is of little value. Perhaps that is why WHS have changed, and time will tell if their new approach is beneficial.
Michelle Nicholas - 25/08/2008
ALL Loyalty schemes have customers for whom they mean very little. That's because 80% of any business value is driven by 20% of customers and if you can make that 20% happy and engage a few more, then that's a job well done. Some customers like to go online, but the majority still prefer paper vouchers and paper gift vouchers (rather than the chip and pin gift cards). Business decisions to go online can be as much about commercial cost cutting and business benefit as customer preference. In terms of unused points, most decent loyalty programmes contact 'inactive customers' to remind them of their points. For points outstanding of many years, there are often reminder programmes and then charity schemes to allocate these. The larger majority of any voucher reward mailing is redeemed within 2-3 weeks. The footfall instore in phenomenal. So, yes, people do redeem points in their millions. And Austin Allegro's are retro chic!
Damien Parsonage - 26/08/2008
I know you weren't taking about Tesco's clubcard Julian, which is exactly why I mentioned it! As I say, bad schemes leave the customer dissatisfied and the business counting the cost of unredeemed points. Whether offline or online. Good loyalty schemes today are not 'me too' points programmes. They deliver the brand experience in relevant, unexpected and motivating ways, that enhance and enrich the brand interaction for the consumer. They give the customer real value - whether that's rational discounts or offers, or, increasingly, intangible, feel-good, brand-led rewards. And they give the business increased revenue through frequency lift, up-sell and cross-sell. For me, the key here is the brand and what it means to your customers. A good loyalty initiative will identify what the brand can uniquely deliver to that audience and then deliver it. Perhaps the WHS problem is that they don't really have a strong enough brand relationship with their customers? Rather than tinkering with an uninspired programme, perhaps they need to get back to the drawing board and design a scheme that reflects their core brand values. Also, Green Shield stamps were fantastic. Interactive, involving, tactile. Could be time for a come back surely? A sort of anti-digital, back to simplicity, movement.
Adam Irwin - 29/08/2008
Lets not forget the other reasons for the loyalty cards. Tracking customer purchases and tracking the buying behaviour is immensely valuable. What products are selling when. Customised communications, specific to the individual consumer and lots of valuable data. All from a loyalty scheme. What happens if the customer doesn't have access to email...? Admittedly the vast majority do, just a thought. Ad