Postcards from Perkistan

Okay, so after being asked by a range of media outlets what I thought of the Choice wrap-up of loyalty programs I thought I’d better sit down and pencil in a response for our members.

Firstly - if you haven’t read the Choice material, you should.

Here are some top of mind thoughts - I’d love to know what you think.

Loyalty Card Review or simply supermarkets?

Firstly (and I know this is being a bit trite) but headlining your article as a Shopping Loyalty Cards story and then only really reviewing two supermarket programs in detail and anecdotally looking at a couple of other larger programs seems a bit disingenuous.

I used Choice a lot when I was having kids and I didn’t expect them to do reviews of prams or cots and only look at the two major brands… If it’s a review of Supermarket Points Based Loyalty then call it that!

The reason this is important is that the media (and now Choice) can be guilty of not relating the loyalty market to a total consumer point of view. Supermarkets are important but a large amount of discretionary spending takes place in other retail segments - holidays, transport, insurance, fashion etc.

Picking one segment and then using this to say ‘loyalty programs don’t offer anything’ is simply wrong. Saying - ’supermarket programs in their current form offer low earn ratios when used without any related offer’ is a bit more correct. But it would have been a short report then!

I take on board that they also looked briefly at Myer, Priceline and a couple of others but this story was all about having a close look at the big two supermarkets (in my opinion).

We have over 650 loyalty programs in the Perkler database, ranging from membership entitlements and pure discount programs through to points accumulation. Each one of these types of programs, across multiple retail segments, is the consumer reality. This breadth of the industry simply isn’t addressed by Choice.

And that’s okay, just be clear about it when you are using the loyalty market to get publicity!

The maths of loyalty

The part of the report focused on the maths around earning points and the time taken to earn vouchers and flights is spot on (as you’d expect). I think Choice have always done an excellent job of breaking complex consumer interactions down to the simplest form to helppeople.

I guess what I also expected to see here is the linking of bonus deals and related programs that make this point generation more attractive. Phil Hawkins from FlyBuys certainly touched on this in the press that he did, and in fact Choice acknowledge the existence of these deals in one of their tables without then bothering to add those scenarios into their top line equations.

Under ‘What you get for your loyalty’ they say “You’ll earn more points and rewards sooner if you pay with an affiliated credit card, use your card at other program stores during the same week, do only one weekly shop, spend more or make use of bonus point promotions” Exactly. So where is the modelling to show how this affects the assumptions they made?

I think it’s a shame that Choice didn’t look into this. It could alter the story by a fair amount.

What those mean retailers really want!

This was the part of the story I found the most bewildering. Not because any of what was said was wrong, but because it seemed so naive. The report makes constant references to supermarkets and other retailers trying to trap consumers into giving away information, get them to shop exclusively at their stores and discriminate on discounts.

I would have thought that all of these tactics are widely known and accepted by consumers. Maybe I’m wrong, tell me if I am, but part of the loyalty dynamic is that consumers accept that the retailer is collecting information about them in exchange for a benefit!

So when I see “Discount Discrimination” in a story that is critical of programs not offering enough, I don’t get it.

I also think “Discount Discrimination” is “Tailored Benefit” something we’ve been trying to push programs to get better at. If it is a loyalty program, why should the guy who doesn’t buy as much get the same offer, even if we live under the same roof?

And Finally

I’ve only really touched on a few of the points here. I may be too close to this market now but I guess my overall feeling on the story was, yeah - so what?

The gaps in analysing the broad range of programs, investigating the relative worth of bonus shopping days and hidden member benefits like those you find in affiliated programs left me a bit underdone on this one.

From what I can tell, Choice got good press on this one so good luck to them - whether it helps anyone understand the loyalty market and how they CAN save I’m not so sure on.

But there’s always perkler.com for that

PS: no retailers were involved in the drafting of this response - not even our clients