When it comes to loyalty, many businesses have taken short cuts. Morrisons’ Match & More scheme and Sainsbury’s lowering the value of its Nectar card points are prime examples. Both schemes are generic points-based initiatives, with Morrisons offering 10 points for every one penny spent and Sainsbury’s offering now only one point per pound spent.

Although this kind of quick payout may appeal in the short-term, it won’t do much to drive the customer longevity Morrisons and Sainsbury’s are looking for. It’s time retailers began to reward with more sophistication.

The retail and fmcg market is more competitive than ever and brands need to look for ways to connect with customers on a personal and individual level, building a relationship that differentiates on context and connection rather than solely through price. With technology accelerating, we are able to process more and by harnessing data, brands can understand this context - the why, when and how customers behave and not just the ‘what’. Only this will allow brands to offer content and rewards that really resonate with each customer.

One scheme that has effectively done this is VIP (Very Important Pets) for Pets at Home. The VIP club offers its members the usual loyalty rewards but also delivers rewards to their nominated animal charities. Similarly, Waitrose’s scheme offers its cardholders free coffee, discounted newspapers and special prices on everyday products. Ultimately, getting people to sign up requires giving something of real value, something the brand knows they really want.

This doesn’t mean the points-based loyalty scheme is dead. Rather, it highlights the need for these schemes to evolve and offer customers a channel to combine a rewards system with something of personal value.

Tesco has made a positive step in this direction by using its wealth of customer insight to see how their customers act as ­individuals and how they shop. The brand is then able to personalise its offers and incentives. Other retailers clearly need to follow suit.

Matt Fanshawe is group COO and global brand director of Havas EHS

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