{"id":7269,"date":"2023-03-14T15:57:15","date_gmt":"2023-03-14T15:57:15","guid":{"rendered":"https:\/\/www.promomarketing.info\/?p=7269"},"modified":"2023-03-14T15:57:18","modified_gmt":"2023-03-14T15:57:18","slug":"is-pounds-not-points-really-the-way-to-go","status":"publish","type":"post","link":"https:\/\/www.promomarketing.info\/is-pounds-not-points-really-the-way-to-go\/","title":{"rendered":"Is &#8216;Pounds, Not Points&#8217; Really the Way to Go?"},"content":{"rendered":"\n<p><strong>Opinion From IncentiveSmart<\/strong><\/p>\n\n\n\n<p>There are some things we can\u2019t help but resent spending our money on. When that \u2018Check Engine\u2019 light starts glowing, or when the school uniforms get a little too tight once again, or when the dentist sits back in her chair and says, \u201cI\u2019ll need you to book another appointment\u201d. They are the bare necessities \u2013 and, unlike the&nbsp;<em>bear<\/em>&nbsp;necessities, they definitely aren\u2019t free to scavenge from the forest floor as you hum a merry tune.<\/p>\n\n\n\n<p>The supermarket is another place where spending hard-earned money rarely feels like a joy. Besides the occasional treat snuck into the trolley, there are plenty of bare necessities that make their way down the conveyer belt quite unceremoniously.<\/p>\n\n\n\n<p>This is, of course, why supermarket loyalty schemes prove so successful. Most of us&nbsp;<em>have<\/em>&nbsp;to go to the supermarket at least once a week and, unless it\u2019s way out of our way, the supermarket with the most beneficial (and, most importantly, memorable) loyalty scheme is likely to be our destination.<\/p>\n\n\n\n<p>That brings us onto to Asda, who recently unveiled a new pounds-based rewards scheme for their customers \u2013 a novelty in the supermarket circle, given the emphasis Asda\u2019s main competitors place on points, rather than pounds. And, when it boils down to the age-old debate between money and points, Asda\u2019s new efforts are just as relevant to\u00a0<a href=\"https:\/\/www.incentivesmart.com\/customer-loyalty\" target=\"_blank\" rel=\"noreferrer noopener\"><span class=\"has-inline-color has-vivid-cyan-blue-color\"><strong>B2B loyalty<\/strong><\/span><\/a>\u00a0as they are to the traditional, B2C loyalty schemes.<\/p>\n\n\n\n<p>So, here it is \u2013 our in-depth, up close and personal look at Asda\u2019s new rewards scheme \u2013 what we admire, and what experience has taught us we\u2019d rather steer away from.<\/p>\n\n\n\n<p><strong>Asda\u2019s Rewards Scheme: What\u2019s the Deal?<\/strong><strong><\/strong><\/p>\n\n\n\n<p>Back in August,\u00a0<strong><a href=\"https:\/\/corporate.asda.com\/newsroom\/2022\/08\/16\/asda-confirms-shoppers-nationwide-can-now-access-its-loyalty-programme\" target=\"_blank\" rel=\"noreferrer noopener\"><span class=\"has-inline-color has-vivid-cyan-blue-color\">Asda started rolling out its first loyalty programme<\/span><\/a><span class=\"has-inline-color has-vivid-cyan-blue-color\">.<\/span><\/strong> While they were late to the game (Tesco launched their Clubcard back in 1995, for instance) the supermarket had maintained a competitive edge through the years with its rollbacks and competitive pricing strategy.<\/p>\n\n\n\n<p>Asda Rewards is centred around a \u2018Cashpot\u2019, which grows larger each and every time shoppers scan their app at checkout, or complete \u2018challenges\u2019. This is the interesting part &#8211; the money in this Cashpot can be redeemed through a voucher, which can be put towards their next Asda\u2019s shop (either in person, or online). Is that not a voucher scheme we ask?<\/p>\n\n\n\n<p>The scheme is made more unique by the challenges ASDA offers to shoppers (for instance, \u00a31.50 can be earned for any 10 items of fruit and vegetables), and by the \u2018Star Products\u2019 found throughout the store that can earn a 10% return in their Cashpot. It\u2019s obvious that these challenges are designed to encourage shoppers to spend more time in store, more time looking for things (and trying&nbsp;<em>new&nbsp;<\/em>things they wouldn\u2019t usually go for), and, ultimately, spend more money.<\/p>\n\n\n\n<p>It&#8217;s a great idea, aside from one pretty big detail \u2013 historically, points-based rewards have demonstrated far better success rates in the long-term, even though we love having a little extra cash to spend when temptation is right in front of us.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/IncemtiveSmart-Asda.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"602\" height=\"391\" src=\"https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/IncemtiveSmart-Asda.jpg\" alt=\"\" class=\"wp-image-7271\" srcset=\"https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/IncemtiveSmart-Asda.jpg 602w, https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/IncemtiveSmart-Asda-300x195.jpg 300w, https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/IncemtiveSmart-Asda-600x390.jpg 600w, https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/IncemtiveSmart-Asda-400x260.jpg 400w\" sizes=\"auto, (max-width: 602px) 100vw, 602px\" \/><\/a><\/figure>\n\n\n\n<p><strong>Our Reservations Over Cash-Based Rewards<\/strong><strong><\/strong><\/p>\n\n\n\n<p>We get it. Finding an extra \u00a320, getting that better-than-expected tax rebate, or opening a birthday card to find a handful of notes is a good feeling. We all like to know we\u2019ve got a little no-strings-attached cash to spend on something extra, or just take the sting out of an unavoidable expense. This is, of course, the motivator behind Asda\u2019s scheme. Shoppers can spend their accumulated \u2018cash\u2019 on a few extra treats among the usual cupboard supplies.<\/p>\n\n\n\n<p>The counterargument, however \u2013 and one that we align with at Incentivesmart \u2013 is that cash isn\u2019t memorable, and the kind of stuff we usually spend those unexpected extra doses of cash aren\u2019t long lasting, either.<\/p>\n\n\n\n<p>Remember what we said at the beginning of this article, about how there are some things we will always resent spending money on because they\u2019re boring necessities? Add to that list things like toilet roll, dishwasher tablets, toothpaste, lightbulbs, washing up liquid, and socks! Saving a little on these humdrum expenses is all well and good, but it\u2019s not&nbsp;<em>exciting<\/em>&nbsp;or memorable in the same way that accumulating points is \u2013 when you have to take time to think about exchanging them for rewards and experiences that actually mean something.<\/p>\n\n\n\n<p>It&#8217;s very likely that Asda is aware of this. Why? Because their in-app challenges cater to that part of us that enjoys working toward a goal, rather than simply accumulating points with each purchase. It gives customers a more active role in the scheme \u2013 something which is usually reserved for points-based reward schemes.<\/p>\n\n\n\n<p>Now, the obvious counter-counter argument in favour of cash-based rewards is that Asda operates in a very different ecosystem to most businesses. Supermarkets aren\u2019t like other businesses offering rewards schemes. We go to the supermarket&nbsp;<em>very<\/em>&nbsp;regularly and, often, our choice of supermarket is&nbsp;<em>also<\/em>&nbsp;dependent on other factors: which one is closest to where we live? Which one stocks the brands\/products we like the most? Which one suits our budget?<\/p>\n\n\n\n<p><strong>Where Do Points Have the Edge?<\/strong><strong><\/strong><\/p>\n\n\n\n<p>There are plenty of reasons why\u00a0<a href=\"https:\/\/www.incentivesmart.com\/blog\/5-reasons-points-work-better-than-cash-for-b2b-customer-rewards\" target=\"_blank\" rel=\"noreferrer noopener\"><strong><span class=\"has-inline-color has-vivid-cyan-blue-color\">points continue to hold an edge over pounds<\/span><\/strong><\/a>, even in the unique world of supermarkets \u2013 and even when you take into account the surface-level appeal of cash over points, which only hold value within a closed loop environment.<\/p>\n\n\n\n<p>Consider the fact that, in a recent survey,\u00a0<strong><a href=\"https:\/\/www.grocerygazette.co.uk\/2022\/11\/10\/tesco-clubcard-rewards-scheme\/\" target=\"_blank\" rel=\"noreferrer noopener\"><span class=\"has-inline-color has-vivid-cyan-blue-color\">Tesco\u2019s points-b<\/span><\/a><\/strong><a href=\"https:\/\/www.grocerygazette.co.uk\/2022\/11\/10\/tesco-clubcard-rewards-scheme\/\" target=\"_blank\" rel=\"noreferrer noopener\"><span class=\"has-inline-color has-vivid-cyan-blue-color\"><strong>ased Clubcard still ranked #1 among customers<\/strong><\/span><\/a><strong><span class=\"has-inline-color has-vivid-cyan-blue-color\">.<\/span><\/strong> Asda ranked fourth, behind Sainsbury\u2019s and The Co-Operative, both of which\u00a0<em>also<\/em>\u00a0offer points-based schemes. The offer of cash is not, in and of itself, an instant selling point; customers are a lot savvier than that.<\/p>\n\n\n\n<p>We spend a lot of time thinking about rewards schemes, and how to offer the best (and most enticing) programme to your customers, so we have some ideas of our own about why this could be. Here are just a few\u2026<\/p>\n\n\n\n<p><strong>Points make consistency easier for businesses<\/strong><\/p>\n\n\n\n<p>Giving away tangible rewards or experiences makes better financial sense than giving away cold hard cash. Why? Because, with a carefully planned points-based rewards scheme, you can accrue and offer some genuinely enticing rewards to customers without narrowing your margins on your own products or services.<\/p>\n\n\n\n<p>Consider the fact that Asda\u2019s first \u2018Milestone Mission\u2019 for customers is to spend \u00a350 in-store or online. If they hit that milestone, they get \u00a31.50 back, which works out at 3%. Another offer mentioned on Asda\u2019s own site is \u00a31.50 for any 10 fruits or vegetables (so unlocking this milestone will, presumably, cost less than \u00a350), while another will see \u00a35 invested into the Cashpot for every \u00a325 spent on school uniforms.<\/p>\n\n\n\n<p>The rules are inconsistent. It could be argued, of course, that this inconsistency is what keeps the scheme fresh, and what keeps customers checking in on their Asda Rewards app. If it was the same old deal every time they went in store, it wouldn\u2019t be so memorable, right?<\/p>\n\n\n\n<p>But how long can the novelty sustain itself? The benefits of a scheme that is based on a very simple, memorable, and clear system (for instance, 1 point for every \u00a31 spent, and \u00a31 for every 100 points accrued) remain clear as day \u2013 and, judging by Tesco\u2019s popularity with customers, the lack of novelty is not a fatal flaw. Why? Because the&nbsp;<em>rewards<\/em>&nbsp;themselves change \u2013 not the rules of the game.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/incentiveSmart-Asda2.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"602\" height=\"391\" src=\"https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/incentiveSmart-Asda2.jpg\" alt=\"\" class=\"wp-image-7272\" srcset=\"https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/incentiveSmart-Asda2.jpg 602w, https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/incentiveSmart-Asda2-300x195.jpg 300w, https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/incentiveSmart-Asda2-600x390.jpg 600w, https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/incentiveSmart-Asda2-400x260.jpg 400w\" sizes=\"auto, (max-width: 602px) 100vw, 602px\" \/><\/a><\/figure>\n\n\n\n<p><strong>Points keep customers within your closed loop, without restricting them to a limited range of rewards<\/strong><\/p>\n\n\n\n<p>One of the biggest reasons why cash rewards are a bad idea for businesses is because, after the reward has been handed over, you get no more insight into&nbsp;<em>what<\/em>&nbsp;customers are spending that cash on, or&nbsp;<em>where<\/em>&nbsp;they are spending it.<\/p>\n\n\n\n<p>Asda know this, and they have circumvented the issue with their Cashpot, which can only be redeemed or \u2018emptied\u2019 in Asda\u2019s stores or through its website, so it\u2019s pretty much straddling the fence between cash and points. It looks like money and acts like money, but only&nbsp;<em>within<\/em>&nbsp;Asda\u2019s own big-little ecosystem. Is that really cash because as we know cash can be spent anywhere!!<\/p>\n\n\n\n<p><strong>Money can be spent thoughtlessly; points are better accrued<\/strong><\/p>\n\n\n\n<p>Asda\u2019s Milestone Missions&nbsp;<em>do<\/em>&nbsp;give shoppers something to work towards they\u2019re accruing the cash just the same. Points require imagination \u2013 they give shoppers a definitive goal to work towards, and a real, motivating reason to keep accruing those points, and not to just spend them for the sake of it each time they start to build-up. And, provided you can focus on offering a really strong, versatile and exciting selection of rewards for customers to spend their points on, allow them to mark favourites so they can identify what appeals to them, you can capture their imaginations for the long-haul.<\/p>\n\n\n\n<p><strong>Points are best for getting customers emotionally involved in the scheme<\/strong><\/p>\n\n\n\n<p>Building loyalty isn\u2019t just about giving customers a reason to come back to you each time they need the product you offer, or the service you provide. It\u2019s also about cultivating a long-term, steadfast emotional connection that will keep your customers loyal even when your competitors are offering a better on-the-spot deal.<\/p>\n\n\n\n<p>An emotional connection is the difference between casual loyalty, and the evangelistic behaviour that can enable businesses to really thrive \u2013 the customers who will recommend you to friends and co-workers, and who will represent the bedrock on which your business\u2019s success is built.<\/p>\n\n\n\n<p>Cash is, as we mentioned above, unmemorable, and pretty workaday. Unless it\u2019s a massive lump sum inheritance or prize money, you\u2019re probably not going to remember it a couple of weeks, a few months, or a year down the line.<\/p>\n\n\n\n<p>Points create a story in our heads. The process of picking out a reward you want and very gradually working toward it is&nbsp;<em>different<\/em>&nbsp;and, provided the rewards are relevant enough to really inspire your customers to earn them, very memorable indeed.<\/p>\n\n\n\n<p><strong>Points are better value<\/strong><\/p>\n\n\n\n<p>The final cherry on the cake is that commercially, points provide better value than cash. We&#8217;ve provided a simple points vs cash model to demonstrate this:<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/incentiveSmart-model.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"400\" height=\"711\" src=\"https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/incentiveSmart-model.jpg\" alt=\"\" class=\"wp-image-7273\" srcset=\"https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/incentiveSmart-model.jpg 400w, https:\/\/www.promomarketing.info\/wp-content\/uploads\/2023\/03\/incentiveSmart-model-169x300.jpg 169w\" sizes=\"auto, (max-width: 400px) 100vw, 400px\" \/><\/a><\/figure>\n\n\n\n<p><strong>So, What\u2019s our verdict?<\/strong><strong><\/strong><\/p>\n\n\n\n<p>Asda\u2019s rewards scheme is likely to prove a success. They already have a significant (and, in all likelihood, loyal) customer base, and a solid reputation for offering competitive, in-store deals and prices that kept customers coming through the doors long before it launched this scheme. So, for many people, this will represent something of a cherry on the cake, rather than a game-changing, supermarket-switching prospect.<\/p>\n\n\n\n<p>That\u2019s not to say Asda\u00a0<em>won\u2019t<\/em>\u00a0attract brand new customers, but that they will enjoy the main benefit of a successful loyalty scheme:\u00a0<strong><a href=\"https:\/\/www.incentivesmart.com\/blog\/why-b2b-customer-loyalty-marketing-is-an-essential-ingredient-for-customer-retention\" target=\"_blank\" rel=\"noreferrer noopener\">customer retention<\/a>.<\/strong><\/p>\n\n\n\n<p>More interesting to us is the fact that Asda\u2019s rewards scheme seems to take advantage of the very best of both worlds. Cash is, at face value, a very compelling offer. We\u2019ve said it before and we\u2019ll say it again \u2013 ask any group of people whether they want to be rewarded with cash or&nbsp;<em>stuff<\/em>, and the overwhelming majority will probably say cash. But, once spent, that cash is forgotten \u2013 the purchase is lost to the sands of time \u2013 and the customer\u2019s attention needs to be grabbed all over again. You give away more money, and the cycle continues.<\/p>\n\n\n\n<p>The cash Asda gives to its customers through its Milestone Missions and Star Products acts a lot like points. It goes into a \u2018Cashpot\u2019 and customers can see that value accruing, which caters to our desire for money over&nbsp;<em>stuff<\/em>, but it can\u2019t be redeemed as cash-in-hand or spent anywhere other than within Asda\u2019s bricks-and-mortar or online stores. It keeps people&nbsp;<em>within<\/em>&nbsp;Asda\u2019s closed loop, much like points.<\/p>\n\n\n\n<p>What can we take from this? That collectability (aka points!!) will always offer the greatest possible benefit to businesses. They keep the loop closed and motivate the customer to keep returning and, in so doing, accruing points. You&nbsp;<em>definitely<\/em>&nbsp;don\u2019t need to dress them up as cash to trick people to think that\u2019s enticing, and you don\u2019t need to invest crazy amounts of money into the rewards you offer. Instead, you need them to be relevant, memorable, and always interesting to your returning customers.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Opinion From IncentiveSmart There are some things we can\u2019t help but resent spending our money on. When that \u2018Check Engine\u2019 light starts glowing, or when the school uniforms get a little too tight once again, or when the dentist sits back in her chair and says, \u201cI\u2019ll need you to book another appointment\u201d. They are [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7270,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3079,647,442,3077],"tags":[1002,183,391,1163],"class_list":["post-7269","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-incentives-1","category-loyalty","category-opinion-1","category-rewards-1","tag-incentives","tag-loyalty-tag","tag-opinion","tag-rewards"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Is &#039;Pounds, Not Points&#039; Really the Way to Go? - IPM Bitesize<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.promomarketing.info\/is-pounds-not-points-really-the-way-to-go\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Is &#039;Pounds, Not Points&#039; Really the Way to Go? - IPM Bitesize\" \/>\n<meta property=\"og:description\" content=\"Opinion From IncentiveSmart There are some things we can\u2019t help but resent spending our money on. 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When that \u2018Check Engine\u2019 light starts glowing, or when the school uniforms get a little too tight once again, or when the dentist sits back in her chair and says, \u201cI\u2019ll need you to book another appointment\u201d. 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