We’ve previously spoken about whether cash is the best incentive for employee rewards schemes, but what about your most loyal customers? Keeping your existing customers happy and maintaining customer loyalty is essential to a business’s success. So how can you best show a token of appreciation to those who have spent their hard-earned cash with your company, time and time again? 

ASDA Rewards

ASDA recently decided the answer to boosting loyalty and competing with the other big hitter supermarkets, was to introduce their own nationwide rewards scheme with a gamification element. 

What is the ASDA rewards scheme? 

The ASDA customer loyalty scheme is facilitated through a smartphone app and can be used both in store and online. ASDA describes it as an exciting opportunity to earn ‘ASDA pounds into a Cashpot’ which you can then spend on groceries.

As part of the scheme, there are two types of offers; Star Products and Missions. Star Products are specific items that earn the customer a certain amount into their Cashpot, each time they purchase one of them.

Missions are offers that customers complete as they shop. These require a customer to shop a certain number of times or spend a certain amount of money on qualifying products. Completing a mission earns the customer a specified amount into their Cashpot and is tracked within the app.

The points can then be swapped for ASDA Pounds vouchers, which can be spent in-store and online. These rewards are redeemable for up to six months, at which point they expire.

Pros

• The majority of the offers give the customer around 10% back on their purchase. 
• If you shop online, purchase a star product, and this isn’t in stock at the time of collection, you will still receive your points, even on a substitute item.
• Milestone Missions often require multiple transactions, so those shopping regularly will be able to easily meet these requirements and build their Cashpot.
• If you already have an ASDA credit card, you can earn 1p per pound spent in the supermarket equaling 1% back - for spending elsewhere this is 0.25% with 1p per £4 spent.

Cons

• There may be cheaper alternatives to the star product even with the discount, so purchasing an alternative may actually save money.
• For those not shopping regularly, they may not reap the benefits of the ‘Missions’.
• Cashpot value expires meaning that there is a time limit on spending your rewards.
• Cashpot value cannot be exchanged for any other benefits.
• For those doing smaller shops or choosing to shop own brand products are less likely to see their rewards build up as quickly.
• If you choose to cash out your points and have £5.50 you will only receive £5 as the number of points must be in denominations of £1.

How does it hold up against competitors?

Unlike ASDA, Tesco and Sainsbury’s offer their customers enrolled in their loyalty scheme, the opportunity to cash in their points for discounts to spend with other rewards partners, including theme parks, hotels and other experiences. Bringing an extra incentive and flexibility to their offering, compared to ASDA which focuses on saving on your grocery shop.

Promotional events run by Tesco and Sainsburys also allow customers to increase the value of the points collected through various seasonal schemes and ongoing promotions. This includes turning 50p into £1.50 on rewards partner vouchers with Tesco. Equally, Sainsbury's runs seasonal ‘double up’ events where users can double the value of their points.

The time limit on the ASDA rewards may be an issue for those who are less frequent shoppers, whereas Nectar and Tesco points do not expire, but once converted into vouchers, these have an expiration date added. With Tesco this is two years from the date of issue and Nectar vouchers expire a year after issue, compared to ASDA’s 6 month time limit.

Summary

Supermarkets are facing a competitive period of time, during which customers will face a decision on where to spend their salaries. As an essential part of daily life, obtaining an edge on your competition through loyalty schemes is crucial. 

We’ve seen the evolution of the Tesco Clubcard and Nectar points in the past, and it’s likely that the ASDA rewards scheme will change as the business better understands the needs and wants of their customers.

Not only does a reward scheme provide a useful incentive for encouraging customers to shop with your supermarket over a competitor, they also provide valuable data insights into shopping habits and behaviours. With this understanding, companies like ASDA can better tailor their offering on a personal level, within an account, and on a wider scale in terms of value and functionality of the programme.

Although the promise of ‘cash rewards’ by ASDA may seem tempting, the value of the rewards are completely dependent on the customers' individual shopping habits and the value associated with the rewards.

In recent years, a great deal of time and effort has been invested into the supermarket retail industry to develop user friendly and enticing reward programmes that influence the spending behaviour of their customers in a highly competitive industry. The same can be said for almost any sector in the world, with the introduction and influence of online or budget driven competitors, the need to develop additional services that continually engage and motivate customers has become far greater.

There are now multiple examples where good price and great service are only the first requirement to instill brand loyalty with an audience, this is often supported by a well-rounded rewards scheme that taps in to modern thinking and the idea of rewarding customers not just for spending money, but for ongoing and public engagement with a brand. The whole market will continue to evolve to find new ways of using this technology to enhance their business and increase their market share in a challenging world.