Community Gives Brands What Loyalty Programmes Can’t

Image provided by Alpkit

A senior retail marketeer contacted me. 

He’d read an article I’d written on community, highlighting how community and loyalty weren’t the same thing and how brands would need to invest in the right way to merge these concepts. 

It was a warning that hit a nerve with this guy as he looked at a network of stores which stretched from Europe to Asia. 

How could he capitalise on the ‘local opportunity’ he was sitting on and strengthen the direct relationship with customers?

The context was Adidas and their ‘Adiclub’ and Nike’s ‘Marketplace of the future’ – and the shifts to DTC.

It was clear even then that the narrative around ‘community’ was more than a passing trend.

A couple of years on, in the middle of a cost of living crisis when certain sectors are seeing a sales dip, ‘loyalty’ is back on the agenda. 

But not everyone is talking about loyalty programmes and community in the same breath, but they should be and here’s why:

1. There is no such thing as loyalty* 

I’m being slightly facetious but there’s a question mark over the use of the term. 

Few are more scathing of loyalty programmes than Byron Sharp, the marketing academic from Australia. 

In his view loyalty programmes simply reward people who would have bought from you anyway.

He has a point, but critics of Sharp would flag the new revitalised Tesco Clubcard.

It puts price at its heart and fosters an immediate reaction instore (buy now, save cash). 

Tesco tell us that 21m Brits use their Clubcard.

It’s proof that non regular customers (aka, me, the bargain hunter) will sign up and buy – which is why Sainsbury’s has replicated it instore with Nectar Prices and why Asda, Morrisons, Coop are all investing.

But let’s be honest, it’s not loyalty, which is why it cannot work on its own long term – it’s a race to the bottom with tactical loss leaders to drive it along the way.

2. Community can be loyalty’s saviour 

The benefit of creating a ‘community’ alongside a loyalty programme is the level of depth it adds to your offer long term. 

Fundamentally it has the power to generate true ‘loyalty’. 

When we began to explore this, we mapped out what good looked like (see the next point). 

For most brands – especially retailers – it’s about cross selling. 

John Lewis Partnership has recently begun a hefty investment in its ‘pan partnership’ loyalty programme, which seems feasible considering its similar audience across the two store brands – Waitrose and John Lewis. 

And yet there are warnings that we learnt while working with another retailer with various customer facing brands. 

We identified some serious dangers of creating a ‘one card fits all’.

Community building is the value add that takes time and investment, but once it becomes too generic (across different audiences) it can stop being a community. 

In other words, serious climbers don’t really see themselves as part of a community that includes tennis players (obviously), while customers of a premium brand (like Waitrose) might not consider themselves too aligned to those who shop at Farmfoods.

It might seem flippant, but this is the danger with John Lewis’ more affordable strategy, launching Anyday and bringing in more affordable brands like Mango and Nobody’s Child. 

John Lewis has a strong identity with a premium price point. 

When you stretch a brand like that, you stretch the sense of community and you can weaken the core. 

3. Experience is what matters  

‘Community’ is bandied around by all sorts of brands but rarely is the term unpacked.

The reality is that it’s all about the authentic experience.

Asics is working hard to build a brand around the mental health benefits that running brings.

It sits well with Asics’ positioning of ‘Sound mind in a sound body’ supporting physical events with Mind, exploring the scientific benefits of exercise with Dr Brendon Stubbs and projects like the ‘Mind Games’ experiment to look at the benefits that exercise can bring to those playing all sorts of games - how it sharpens the mind. 

All these clever tactical ideas layer up nicely to the bigger proposition.

It’s all about the long-term investment. 

Some outdoor brands are pioneering here – taking the long view. 

The British outdoor brand Alpkit has defied the common logic, going from online retailer to opening 10 stores, organising localised events from its stores and an annual ‘Big Shakeout’ Festival, with over 1,000 outdoor activities and courses, live music and street food over a weekend in September.

All profits go to its foundation – so reinvested.

Ellis Brigham has a similar affair in North Wales, while Swedish brand Fjallraven’s ‘Campfire Events’ are smaller but have similar feel – backpacking, trekking and workshops.
They all signal a positive shift. 

The key that makes community ‘work’ is being authentic (and passionate) but also to be ‘in it’ for the long term) – using it to shift discounted stock is not making best use of your ‘community’ and I can testify that this is the motivator in some cases.

It cannot be a passing fad.

It can often mean a physical event programmes (ones that the beancounters would never normally sign off on).

And that is probably why genuine, inspirational community ideas are few on the ground when it comes to physical retail, which is surprising considering the state of the high street and the battle against online. 

4. People want to be part of a community

If there’s a term that’s been overused it’s ‘community’, but if there was one thing that came out of the last few years, it’s the demand by people to be part of something, to share with like-minded people, sharing the same interests or values – this was one of themes highlighted in our own work into the shifts in attitudes since 2020.

A brand based on simply commercial transactions is not really building up the trust and loyalty it’s aiming for.

5. It’s all about emotion

In the same way that brand building is about the emotional pull, not the functional product sell, community works because of emotion. 

Community feeds people’s increasing desire to belong. 

I have used outdoor as an example, because the data backs up what we all know; people are spending more time outdoors, but these learnings can be used across multiple sectors, in particular, retail – this is where the big opportunity lies. 

To hear more from Scott, email scott.mccubbin@wearecontinuous.net. To learn more about Continuous visit here.