RE: UKNM: Loyalty points

[Jeff Marshall]

 Sanjay Mazumder said:


<I think the general thing is that its only worth it if <you make many

<repeat purchases.  That's why Tesco, Sainsburys etc <have been so

<successful with their loyalty cards, since we all have <to buy food all

<the time.


Please forgive these ramblings on this thread, particularly if I'm teaching

granny to suck eggs.


The real value of loyalty cards (to the merchants) is in being able to

identify the contents of shopping baskets (which stores have been able to

analyse for years through EPOS) with real shoppers and demographics (which

stores couldn't do until they introduced loyalty cards).  Storing all this

info in a database (big one, when I was last involved in one of the big

three previously mentioned there were 8m card holders, purchase histories

kept for two years, providing terrabytes of data), allows sophisticated data

mining and campaigning, specifically up-sell and cross-sell campaigns aimed

at particular sub-sectors of the database, based on previous shoppers

behaviour.


In e-commerce, we can always link shoppers to purchase history, and we have

a direct lowcost line of communication from merchant to shopper.  If we

aren't using these to provide similar targeted campaigns which result from

data-mining and analysis, then we aren't doing our job properly.  


At the supermarket, the loyalty card is the mechanism to link shopper to

purchases, as well as providing the reward to the shopper for allowing this

information to be collected.  On-line shopping doesn't need the link -

because we have to deliver the goods, therefore know who the shopper is.

Maybe we don't need the reward either, the (supposedly) faster, better,

cheaper service may be enough.


The holy grail of one-to-one marketing (which is what we are talking about,

and what loyalty cards are there to facilitate) is acquire more customers,

retain them for longer and increase their profitability whilst we are at it.

The beauty of new media should be that it directly supports these three

things without needing to resort to loyalty cards.


Jeff Marshall

WorldWide Web Services Limited

(a member of VIA Net Works Inc.)


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