• 79% of Brits are members of at least one program which spotlights the significant role these programs play in shaping consumer decision making.

• Ogilvy’s Behavioural Science department underscores the importance of understanding psychological factors, such as scarcity bias and the goal gradient effect, when designing loyalty programs. These elements can significantly impact consumer motivation and retention.

• Supermarkets rank as the leading sector for loyalty programs, with high-frequency and high-spend programs. Tesco Clubcard, Nectar, and Boots Advantage Card were the most popular loyalty programmes in the UK.

• There is a strong consumer expectation for promotions within loyalty programs, with 73% of consumers participating in promotions and 72% expecting all brands to offer them.

Emma Kirk, General Manager of the IPM, kicked off the event with a keynote speech addressing the transformative impact of digitalisation on loyalty programs. She comments on the remarkable advancements in personalisation, scarcity, and the integration of artificial intelligence. These developments present a wealth of opportunities for consumers to save and celebrate, especially during the ongoing cost-of-living crisis. Emma observes the effects of loyalty on Generation Z and Alpha before underscoring the exciting prospects ahead for the loyalty sector.

“With the advancements in technology and a customer base hungry for offers, discounts and promotions, there has never been a more exciting time for loyalty”.

Emma Kirk, IPM General Manager, IPM

Dan Bennett, Behavioural Scientist at Ogilvy, began by quoting David Ogilvy (“The Father of Advertising”: “People Don’t think what they feel. They don’t say what they think. And they don’t do what they say”. This proverb starts his exploration into the behavioural concepts behind our favourite loyalty programmes. Including the dual-process theory of decision-making (System 1 and 2), evolutionary programming, scarcity bias, and goal gradient effect—each crucial for crafting effective loyalty programs. Dan also discusses the four types of loyalty bonds and how a focus on emotional as opposed to the financial biases can lead to a more loyal, more forgiving and less price sensitive customer base.

Charlie Hills, a recognised expert in loyalty strategy and Chief Strategy Officer at Mando-Connect, delved into the research conducted in partnership with YouGov, to reveal that an overwhelming 97% of adults find at least one loyalty program appealing. Supermarkets emerged as the most popular sector for loyalty programs, capturing 67% of the market. While Tesco Clubcard, Nectar, and the Boots Advantage Card emerge as the most popular loyalty programs in the UK. Promotions were found to play a key role in the loyalty mix, with 73% of consumers actively participating in promotions and an equal proportion (72%) expecting brands to offer such incentives. These findings from Mando-Connect and YouGov’s research provide a compelling narrative for the importance of promotions in loyalty programs today.

The event concluded with a compelling panel discussion featuring loyalty and brand partnership experts. According to beauty skincare founder, Simon Leonard (Gruum), despite the initial challenges in establishing brand partnerships, they are highly cost-effective ways of generating brand visibility. Alec Short, Account Manager at Sainsbury’s, shared insights into the difficulties of attracting new shoppers outside of peak seasons (like Christmas), noting how strategic partnerships can effectively draw in new customers. Matt Eldridge, Propositions Manager at VOXI highlights the success of leveraging scarcity through limited prize rewards to increase platform engagement.

Overall, this event successfully brought together the best and brightest minds in loyalty to share their insights and expertise. The IPM remains committed to supporting and advancing the loyalty sector by supporting this research beyond the UK and into Europe.