Local Loyalty : Key Principles

Local Loyalty : The Right Way

Local Loyalty : The Right Way


  • There’s an emotional connection – tap into it!

Although shoppers are always attracted to a good deal, a local loyalty scheme taps into the fact that most people really care about where they live.

  • Make it varied and interesting

With the mix of businesses typically involved and a points-based solution, it’s fairly easy (but still important) to make the rewards varied and interesting

  • Use the power of many

Shoppers enjoy when businesses act together, to organise interesting events – even something as simple as a double points day!

  • Make joining easy – and immediate

Asking shoppers to log into a web site to join, ensures a significant drop-off in take-up. Instead, make it quick and easy for them to join in-store

  • Don’t give it away

It’s important to charge for membership of the local loyalty scheme. After paying to join, you’ve automatically got a motivated shopper!

Local Businesses

  • Copy what works

The largest retailers run two ‘streams’ of activities in parallel

(a) Short-term, time-limited discounts and special offers and

(b) A points-based loyalty scheme

They do this, because it improves customer retention rates and customer spending. They’ve already figured out what works. Do the same. (We also know that our local loyalty members spend 30% more than other shoppers.)

  • Rewards must be affordable

We recommend that for every £100 the customer spends, the reward should have a face value of £2 to £3. This is another reason to avoid discounting, since a discount has to be 10% or above, to change consumer behaviour.

  • Make sure you can quickly change the rewards

Businesses need to be able to quickly and easily change both the level and type of reward they offer, to cover products, clearances and time of year.

  • Must be quick and easy – with no on-going admin

Setup and operation needs to be quick and easy to setup and use, with no complex calculations and no on-going admin.

  • Musn’t need wi-fi

Although a growing number of businesses now have wi-fi, it’s often not reliable, so the local loyalty scheme needs to still work in this environment.

Local Partnerships, Councils and BIDs

  • Must work for every type of business

The local loyalty scheme should be able to include every type of organisation; large and tiny; high and low value; high and low footfall; products and service providers; profit and non-profit; even charities and sports centres

  • Simple, no admin

Everyone is already busy, so it needs to be simple, with no (or minimal) setup and admin

  • Inclusive

It shouldn’t implicitly exclude people that don’t have a debit or credit card (for example ‘unbanked’ families and young teenagers)

  • Affordable – and without any long-term commitment

It’s important that businesses only remain in a local loyalty scheme because they see the benefits – not because they’re caught in a contract

  • Self-funding

A poorly designed scheme needs constant top-up funding. A well designed scheme doesn’t need on-going funding

  • Quick and easy to launch and run

Admin overheads can’t simply be transferred from individual businesses to a central admin function. Instead, minimal admin needs to be built into the way the local loyalty scheme works