IMI Magazine

Join the club!

Whether you’re buying toiletries in Boots or garden furniture from Homebase, the chances are that you will hand over two pieces of plastic – one to pay for the goods and another to collect ‘loyalty’ points.

According to research, the number of these incentive schemes where points are redeemed against future purchases has increased two and a half times in the last 10 years. More than 40 per cent of top companies have one.

But retailers are now looking at ways to reinforce that loyalty bond.

Arvato Loyalty Services – whose clients include Shell, Lufthansa and Harley Davidson – believes that loyalty or brand clubs, rather than mere points-collecting schemes, are the next big thing in marketing.

“A loyalty scheme is defined as a transaction-based rewards infrastructure,” explained Arvato’s head of sales Andrew Mitchell. “But a loyalty club is a membership organisation that delivers a set of privileges to customer members.”

In research just published by Arvato, 46 per cent of people surveyed said they would be interested in joining a brand club – with close to 40 per cent expressing an interest in one with automotive connections.

Brand passion
Andrew Mitchell said Harley Davidson, renowned for brand loyalty among motorcyclists, was a good example of what car companies could do. “HOG (Harley Owners’ Group) membership includes a welcome pack, two different magazines, a mileage programme and a calendar of events. Clubs like this work best for brands which people are passionate about, and there are plenty of those in the automotive sector, from Smart to Mini.”

Mitchell believes any car company can make a club work, but what the member will want and expect will depend on the brand. “While companies will have to offer good incentives to attract consumers to join their club, it offers the chance to form exceptionally strong relationships with people who have a special interest in the brand.”

Examples of membership benefits are limited only by the imagination of corporate marketing departments. There’s obvious stuff like enthusiast weekends, but clubs could also offer new car test drives ahead of the general public, exclusive accessories not available through dealers, design competitions to create future add-ons, Q&A sessions with key company personnel, or complimentary motor show tickets.

But should all this be a free part of the ownership experience, funded by the car companies to create a better relationship with the customers? Or would people be willing to pay?

Perceived benefits
“There are examples of clubs that have proved so compelling that people are prepared to pay a fee for membership,” said Mitchell. “They perceive the benefits of being a member repaying many times over the cost of joining. If well-constructed, brand clubs can be at least self-supporting, if not profitable. More than a fifth of the people surveyed in our study said they would be happy to pay over £100 to be a member.”

Outside the automotive sector, brand clubs are already booming. The rise in consumer power means buyers want a voice in the products they love. The club becomes a communication channel between company and individual if you can get a core 5-10 per cent of owners involved. The travel sector boasts the P&O Portunus Club, First Scotrail’s Advance Loyalty Club and the Cunard World Club. For other products, there’s Nivea’s Club Blue, Nestle’s Buitoni Club, Club Benecol, Discovery Foods’ Cookery Club, and Huggies’ Mother & Baby Club.

Of course many car firms have enthusiast clubs; it’s just that they’re run by owners on internet forums rather than by the company. So why haven’t the manufacturers caught on yet? “Historically it’s been expensive to communicate with customers because you had to send a letter to each one,” said Mitchell. “But now it’s being driven by a number of factors, one of which is the advent of the digital age. It’s now much easier and cheaper to communicate with your owners by email.”

Something tangible
One manufacturer that has already developed the idea into something tangible is Alfa Romeo with the launch last year of its Cloverleaf Club. “It’s proved very popular – we have over 6,500 members already and that number just keeps growing,” said Nicholas Bernard, marketing director of Alfa Romeo UK. “We expect to have doubled the membership base within the next year, in line with our growing sales.”

Highest price for 12 months’ membership is £75, with £150 securing three years’ membership for non-owners.

The club offers a year-round programme of initiatives and events for Alfisti, the official name for enthusiasts. Benefits include a quarterly magazine with content driven by members, exclusive track days and a dedicated website at www.cloverleafclub.co.uk. Among its functions, it gives users the ability to reserve limited edition models before they are made available to the public.

“The idea is to deliver engaging customer experiences and promote loyalty, and to build a community by connecting members to other Alfisti and the brand,” said Bernard. “We want to inspire members to be involved in new initiatives and to contribute.”

At a time when new car marketing has got to be far more sophisticated than buying a 30-second slot in a TV ad break, and showing a clip of your new model driving past a field of wavy corn, that’s a mantra no car company boss can afford to ignore.

Richard Yarrow