Swiss retailers must offer more than just collecting points

According to a representative survey by the consulting firm Deloitte, 62% of Swiss consumers use a loyalty program such as Cumulus, Supercard or IKEA Family at least once a week. Despite this, just over a third (36%) of respondents only redeem their points or discounts rarely or not at all. Today's customer loyalty programs must therefore offer more than just collecting points. Emotionality and experience, tailored offers and targeted communication are crucial. New digital technologies can also help to significantly improve interaction with the customer and thus bind them more closely to the company.

Whether supermarket, furniture store or petrol station - customer cards are now part and parcel of shopping. Two thirds (66%) of the largest Swiss retailers now offer a customer loyalty program. In most cases, the Swiss collect bonus points that can be redeemed on their next purchase. Three quarters (75%) of all loyalty programs are transaction-based and therefore depend primarily on the amount spent.

Loyalty and loyalty programs are widespread in Switzerland, but many of them often remain unused. A new Deloitte report shows that 62% of Swiss consumers pull a loyalty card out of their wallet at least once a week when shopping. However, a third (36%) rarely redeem their bonus points or do not take advantage of the discounts offered by vouchers and collection campaigns.

Just collecting points is not enough

"Customer cards, collection and discount campaigns or personalized vouchers are the core component of classic customer loyalty programs. They enable companies to increase customer loyalty to the brand or its products and thus ultimately increase their purchases," says Markus Koch, Head of Strategic Development Consumer & Industrial Products at Deloitte Switzerland. "If the consumer has a loyalty card but hardly uses it - as is the case for over a third of respondents - loyalty cannot be increased as intended."

The size of the wallet increases with every new customer card and loyalty promotion - until there is simply no more room for it. According to Deloitte survey results, 61% of Swiss consumers want much more than just a card to collect points. Constant bonus points and discount campaigns do not make customers more loyal, but if used correctly, loyalty programs can increase customer loyalty. The emotionality surrounding the company itself and the brand experience in particular are becoming increasingly important for 45% of the Swiss consumers surveyed.

Emotional customer loyalty and individual offers

Purely transaction-based loyalty programs should therefore address emotional aspects in the future and thus enable a stronger sense of belonging. "Migros and Aldi are already doing this, for example, with their "Migros belongs to the people" and "ALDI-Kind" advertising campaigns launched in 2017. Customers are actively involved in the company's plans and mission. This enables them to have a relationship at eye level, for example by giving them a say in the creation of new products or services in community forums, events or on social media and allowing them to contribute their ideas," explains Luc Zobrist, economist and author of the report.

61% of consumers surveyed also value the option of personalized offers or discounts based on their previous purchasing behavior in return for helpful, practical and personal experiences. A clear majority of consumers surveyed also want loyalty programs that take their individual lifestyle more into account. "Those who provide offers and benefits tailored to individual needs can score points with customers and increase their loyalty. On the other hand, loyalty programs that are not geared to the individual needs of customers, or only to a limited extent, can even have a negative effect on their brand loyalty," says Luc Zobrist.

More loyalty thanks to digital technologies

At the same time, online business is gaining momentum with Amazon's imminent entry into the Swiss market and the ever-increasing sales of Zalando, Galaxus and Co. As a result, it is becoming increasingly difficult for bricks-and-mortar retailers to differentiate themselves. One way to do this is an integrated customer loyalty program with, for example, a well-functioning app that makes it easy to access products and services (e.g. recipes for healthy food or lifestyle coaching tips) and responds to the individual needs of the customer. Markus Koch says: "Such loyalty programs and community activities, which can be found on the participatory platforms Migipedia or Fooby, for example, pay off. The personal encounter between customer, company and like-minded people takes on a whole new significance and creates long-term trust - provided that digital and analog are combined correctly."

Consumers want the ultimate brand experience

The experience offered by a loyalty program is closely linked to emotions. Almost half (45%) of the Swiss consumers surveyed believe that the experience factor is crucial. This involves smooth, fast and targeted interaction with the company or brand as well as playful elements such as interactive competitions (gamification). Membership in an exclusive club for customers, such as those offered by Ochsner Sport or IKEA with their club memberships and associated special services, can also increase the experience factor. For retailers, this raises the question of when a customer should be approached with which content and on which channels to encourage them to make a purchase or visit the store.

"A consistent brand experience only works for the customer if the choice of communication medium at the right time and in the right place is also taken into account. Different customers prefer different forms of communication - be it by email, smartphone or social media. What is important here is an overarching interaction strategy, i.e. contextualizing when, how and with what content to interact with the customer," says Roger Lay, Head of Digital Experience & Innovation at Deloitte. "The smartphone should therefore largely replace the physical customer card as the central component of a loyalty program in just a few years."

The study can here can be downloaded free of charge as a PDF.