Boot’s CMO Pete Markey on why loyalty programmes must focus on both immediate and holistic value in the cost of living crisis

Purple Square have been speaking to customer experience leaders from top global brands about Reimagining Customer Experience (CX). In this interview Tim Biddiscombe speaks to Pete Markey, CMO at Boots UK.

Tim: What can you tell us about how Boots’ approach to customer loyalty has evolved?

Pete: Probably the biggest evolution has been in the last year with the launch of Price Advantage. The Boots Advantage Card has evolved to be about more than points and saving in the everyday. The immediacy of earning and spending points still fulfils our customers’ need for ‘jam today’, which is especially important in the current cost of living crisis. Not forgetting the need for ‘jam tomorrow’, we also understand that highly customised rewards are powerful for customer retention. The roll out of our monthly Price Advantage discounts and more personalised offers and benefits through our app, as well as our clubs and discounts all help to keep customers interested, engaged and connected.

We’ve seen a lot of evolution and learning flowing into where we are now. Some have thrived, while other have faded away. Being aware of the higher stakes and trends is essential, but always remember that simple ideas work. Showing value and building relationships with our customers is essential, especially as the cost-of-living increases. Constantly reviewing your offering and evolving it to meet the needs of your customers are the key to a good loyalty scheme.

Tim: How has a better understanding of your customers, driven by data and insights, impacted the quality and effectiveness of your loyalty messaging?

Pete: Everything we do in the loyalty programme is powered by the strength of the data we have. We have a good data science team we work closely with. It is all about us asking the right questions and that team bringing the insights to us about what our customers want, need and expect from us.

We are very insight driven and data and technology continue to help us to get our programme right. We’ve invested in the Adobe Marketing Cloud and that’s starting to help us deploy our activities more effectively. It’s data but it’s also tech that’s really helping us more and more.

Tim: Do you see any broad trends that are hindering or helping loyalty programmes in the market right now?

Pete: It is a fascinating and exciting time. We need to keep evolving and moving to stay competitive. What am I loving at the moment? Value and immediacy, gamification and the sense of brand endorsement and referral being part of a loyalty scheme as well.

Technology is really important. Our app is more and more essential to our card. The way you can play with that and gamify it. Providing value in your app and giving customers a reason to engage with and come to you is essential to in today’s ‘attention economy.

Attracting new customers relies not only on how much you do in your own environment – in store, through the website, emails and the app – but also on how you refer potential new Advantage Card users through other platforms. Having a referral mechanism is becoming increasingly important. Using gamification in TikTok, for example, is an interesting prospect to think about for engaging younger people.

Tim: In loyalty, marketers have a unique advantage because members expect their data to be used to create something meaningful to them. How can marketers rise to this opportunity?

Pete: As a retailer, it is important to know what offers are working, which customers are most engaged and the brands they love. While data is at the root of this, it is still essential that we draw parameters of how we will and won’t use our customer’s data.

We have an understanding with our customers – they are sharing their data with us in exchange for us providing them with products and services they value. We make it clear we will never sell their data on or take our relationship for granted by being overly familiar or over-contacting them with irrelevant offers.

Brands like L’Oréal or Estée Lauder are interested in how they can connect with our customers through the data we hold. We can help them, not by sharing or selling our customers’ data, but by highlighting specific products from these companies to customers who may be interested in them with targeted messages and offers.

Whether they are new to the brand or regular buyers, introducing new products and offers through personalised communications allows us to provide value to our customers, as well as build relationships with our supplier brands.

The communications need to be relevant and genuine. The customer needs to feel that the brand knows them.

Tim: There’s a train of thought that suggest loyalty schemes will move away from frequency-based programs that reward consistent repeat sales, to a more holistic, relationship-based model.  Is that something you’d agree with? 

Pete: If we look at the Boots Advantage Card I think we strike a good balance between the two, you’re earning rewards points and getting benefits but we’ve really made the programme more of a family or club feel where if you’re in it then you get extra benefits such as early access to certain deals. And we have our connected clubs, like the parenting club and over 60’s club that give customers additional benefits.

I think you can do both. A loyalty programme must have clear benefits for the customer, so they know each time they shop, how the club is benefiting them.

Tim: How can loyalty programmes find the right balance between effort and reward for younger members who’ve grown up in a more gamified culture?

Pete: I think this is a broader marketing challenge, not just loyalty. We have a war for attention now with with multi-screening and the like and getting people to more frequently use your app is really important. Whether that’s by playing games or earning treats, it is only going to grow in importance.

There’s really tough, competitive markets and particularly with the cost of living, brands need to demonstrate value to show they’re building a relationship in the long term. Watch this space, I think there’s going to be lots of evolution in the next few years. 

This interview was also featured in a related article on on 23rd February 2023. Read it here.

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