Loyalty Programs

Loyalty programs are used extensively in many stores to encourage more sales, engagement, and customer loyalty.

In this article, I will focus on examples of the main grocery-store loyalty programs in Finland, yet they can be applied to other loyalty programs also.

Benefits Of Loyalty Programs

Loyalty programs offer discounts, deals and accumulate points from sales. They increase customer loyalty to the store and keep the customer coming back.

For example, the Lidl reward program is amazing, registration is made through an app, no need for a physical card.

It is a great reward system that helps customers accumulate points and get special rewards.

They are only available for people who are enrolled in the program through the app.

The same applies to K-plussa but with a physical card.

Criticism Of Loyalty Programs

One of the criticisms of loyalty programs is that they do cannot monitor customer purchase behavior and feedback.

Criticism is mainly from customers who do not join the loyalty program as they are not eligible for the same discounts that loyal customers receive.

Personally, I am a fan of Lidl (free to join) and K-Citymarket's loyalty program (8€ as a one-time membership fee) as it is easy to join and rewards customers for their loyalty.

Examples Of Loyalty Programs In Finland

• K-city market : 8e to the one-time membership fee, sometimes it is free or discounted depending on deals, points accumulated, points can be transferred to cash which can only be used in K-retail chain and exchanged for items, a loyalty program can only be used in K retail chains such as kmarket, city market, k-rauta,
• Lidl: free to join, app-based, points accumulated, points can be transferred to cash which can only be used in Lidl and exchanged for items, a loyalty program can only be used in Lidl.

Benefits Of Loyalty Programs

Loyalty programs in general offer many benefits among them price reductions, points for purchases that are accumulated in the customer loyalty account and then converted to cash after they have reached a specific point number.

For example, the K-plussa student membership offers 5% cashback for purchases and accumulated points in exchange for items. In many cases, it is not refundable for money since it needs to be exchanged for items in the store.

Free Or Paid Loyalty Programs

1. Lidl's program is free since it is an app-based program that is done online through scanning the QR code, your phone needs to be with you so you can access the discounts and register each individual purchase.
2. K-plussa can be accessed with your bank card as it is registered there (updated version) or in an individual K-plussa card, no internet required and it costs 8e to join.
3. H&M loyalty program is online, free to join, and accumulates points which then are exchanged for money that can be used to purchase physical items or gift cards.

Different Levels Of Loyalty Programs

K-plussa has different levels of loyalty programs based on your identity, for example, a normal K-plussa loyalty program is available for individuals who accumulate points and have access to discounts.

While a student card also accumulates points but provides 5% cash back and there is also a business K-plussa program.

I think you are able to drop a level since once you move from the student status to a normal resident you drop a level and the same applies to when you move from a resident to a student level.

In some loyalty programs, you obtain a higher level due to the points you accumulate and how much loyalty you provide to the brand. I am not aware of such a program in Finland but in Australia it exists where you are able to accelerate to a higher star level as a reward for your engagement with the brand, as in posting on social media, liking and sharing as well as extra services.

Disadvantages Of Loyalty Programs

Criticism is mainly from customers who do not join the loyalty program as they are not eligible for the same discounts that loyal customers receive.

Cannot monitor customer purchase behavior and feedback.

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About The Author

Noor is a second-year business student at Tredu. She is also studying for a Diploma in International Smart Industry at Tampere University. She is passionate about marketing and content creation.