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Research questions efficacy of loyalty schemes

Loyalty programmes are not the best way to retain customers, research by professional services firm KPMG has shown.

Around three-quarters (74%) of consumer said product quality was “very or extremely important” in earning their loyalty, while only a third (37%) cited reward programmes as an effective way to retain their business.

Linda Ellett, UK head of consumer markets at KPMG, said: “Few consumers are willing to have their wallets stacked with loyalty cards, nor do they want to be members of a whole host of loyalty programmes. In any case, more cards or memberships doesn’t necessarily equate to greater loyalty.

”Businesses must look beyond this somewhat simplistic view of what drives consumer purchase decisions.” 

The research also suggested ”friends and family” advocacy may not be as effective a tool for brands as some believe.

“Interestingly, the vast majority of consumers (86%) believe that loyalty would prompt them to recommend a brand to their friends and family,” she explained.

“However, only 36% said that popularity with their friends or family was a particularly important factor in determining their own loyalty.”

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