Loyalty cards versus customer service

With the recent demise of a number of high street brands I have been able to reduce the burden on space in my wallet. The removal of loyalty cards for Blockbuster and HMV has freed up some space, but also made me consider how effective are loyalty card schemes for the long term growth of a retailing business in the first place, compared with providing excellent customer service?

Where should the balance be between offering some form of financial incentive to customers to return to a shop through a loyalty card versus the provision of an excellent customer experience being enough of an incentive to remain? Looking at both the more successful retailers and who are the exemplar case studies in our 2011 report on Delivering Excellence in Retail Customer Service it is those that are renowned for their service levels rather than loyalty cards who are proving to be more successful in today’s challenging retail environment.

Clearly there is a role for both cards and service, but experience shows that for long term customer retention and growth, delivering exceptional customer service is always going to win over delivering a piece of plastic.

Let me know your views.

Colin Bates, Director, Customer Champions


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