THE CLARUS Blog

Why U.S. Grocers Need to Look at Tesco’s New Premium Loyalty Program

As the grocery industry stands as a huge opportunity for premium loyalty, British grocery giant Tesco has moved swiftly in that direction.

Next week Tesco will become the first major British supermarket group to offer a premium loyalty program. Tesco officials hope that the program will help stem the market share gains of German-owned discounters.

The new loyalty program will allow about 19 million Clubcard members to upgrade to Clubcard Plus for £7.99 ($10.27) a month.

Clubcard Plus members will also receive 10 percent off selected Tesco brands in-store, such as F&F, Go Cook, Tesco Pet, and Fox & Ivy.

What does this mean for U.S. grocers and your customers?

 

Premium Loyalty is a Big Opportunity for Grocers

A great opportunity to create and implement effective premium loyalty programs exists for grocers.

Grocers do have some inherent challenges to overcome: They operate on very thin margins, limiting the value of the rewards and benefits they can give back to their customers within a loyalty program.

Grocery loyalty program owners are challenged by both the economics of the industry and the limited opportunities to differentiate the customer experience for their best customers.

Given all the available shopping options, today’s new generation of consumers is looking for immediate rewards and personalized benefits.

That’s where premium loyalty enters the picture.

With new challenges from leading brands like Walmart and Amazon, grocers need to double down on creating customer loyalty.

Just like Tesco.

 

How Tesco is Harnessing The Power of Premium Loyalty

Sixty-one percent of consumers want to see benefits from a premium loyalty program at least once a week.

That’s the strength of a premium loyalty program because it offers instant benefits 24/7/365.

Also, the study says that the biggest factor (40 percent) that impacts a consumer to renew a premium loyalty program is frequency of benefits.

Besides giving loyalty points redeemable for money-off vouchers, Clubcard Plus also offers 10 percent off two in-store shopping trips of up to £200 per month.

By increasing engagement and touch points, premium loyalty programs ultimately enable retailers to build loyalty that extends beyond the coupon.

 

Premium Loyalty Makes People Feel Valued

No matter where they are, your customers want to feel valued.

They want to feel special and recognized. They seek benefits, communications, and offers that are relevant to them and want to feel a bond with the brands they do business with.

Consumers have strong emotional connections to their favorite loyalty programs and this reality lies at the heart of premium loyalty.

Nearly nine in 10 (86%) consumers who are satisfied with the special benefits offered by a retailer’s paid loyalty program will likely choose that retailer over a competitor that is offering a lower price.

Premium loyalty programs offer the best benefits to your best customers and make them significantly more valuable.

 

Listen to Customers and Their Demands

No matter the industry, Loyalty programs need to be creative and innovative to attract long-term members.

If grocers effectively listen to their customers and identify their pain points, there will come a time when these two-way relationships will be more profitable for companies, and more engaging and valuable for consumers.

Don’t you want to get the most out of your best customers by offering them the best of your brand through a premium loyalty program?

Are You Ready to Go Premium?

If you want to become a 24/7 presence in your best customers' lives, it's time to get started.