|
|
 |
|
THOUGHT PIECE
Is Loyalty Dead?
By A.B.Sample
No one on these shores could have missed the launch of Nectar last year. The fanfare was huge, and the press eagerly recounted the technical problems the card encountered in its first weeks.
|
|
Early blunders aside, with well over 18 million collectors Nectar has actually been rather successful. Indeed, anecdotal evidence suggests that Nectar cardholders are carrying and using their cards with considerable enthusiasm. I can vouch for this myself as, on a recent drive back to London from Cornwall, I bypassed several petrol stations in anticipation of a BP garage, in spite of my wife's mounting concerns over the paucity of remaining petrol. In the event, I ended up at Texaco. But the thought was there.
But what was that thought exactly? Like most people, I like being given free stuff; and this is, essentially, my motivation in keeping a Nectar card in my wallet. But does it make me loyal? And, if so, what am I loyal to?
In a way, Nectar is little more than electronic Green Shield stamps. My hanging out for a BP garage wasn't motivated by a desire to buy BP petrol, but a wish to accrue Nectar points. Okay, petrol is not exactly a differentiated product, but my 'loyalty' is to Nectar, not BP.
Most people's purchasing habits are based on a number of criteria, from habit to lack of choice to plain laziness. I shop at Sainsbury's, which also adds to my Nectar points, but my store is convenient and local. If I lived closer to Tesco, I suspect it would garner more of my custom.
Which brings me neatly to the Tesco Clubcard, often held up as a shining example of a loyalty scheme. Of course, Clubcard holders redeem points much in the way that Nectar cardholders do. But its primary purpose is to gather copious amounts of customer data, which Tesco then uses to improve its overall offering - not just matching product offers to customers' buying behaviour, but also other aspects, from aisle planning to stock control. Nectar would seem to be different. Okay, customer data is gathered at subscription and data is pooled, but it is hard to see that all information is shared across each of the partners - especially as there are certain conflicts of interest, such as the fact that Sainsbury's sells both petrol and financial products.
There are many rational and emotional reasons people might be 'loyal' to a brand, but the key factor is the quality of the product. Asda claims that people would happily select low prices over a loyalty scheme, and a recent NOP survey supports this fairly emphatically. If this is the case, and if Nectar doesn't serve to evolve the core offering of its partners, it may offer little beyond simple sales promotion. With the considerable investment required to launch a scheme (Nectar's launch marketing alone was £40 million, plus several more on systems and logistics), there is a strong case to suggest that, if it isn't going to improve the product, it really isn't worth the bother.
|
|
