A Question of Loyalty

Versione stampabile

Htec’s GemPoints system is a loyalty solution which allows any size of retailer to operate a comprehensive loyalty scheme, issuing and redeeming points in the same way that large high street chains do. Samantha Slater spoke to Jeff Dakin, Head of Data Services for Htec, to get his views on loyalty and how this scheme is benefitting smaller outlets.

 
Kiosk Europe: What prompted Htec to launch the GemPoints system?
 
Jeff Dakin: We had been operating the ‘Morrisons Miles’  loyalty programme for some time (for the UK’s fourth biggest supermarket chain Morrisons) so we understood how this model worked for a large tier 1 organisation but thought what about the small guys? We looked at how our sophisticated technology could be used in just single stores so that retailers could benefit from gaining loyalty from customers.
 
KE: Explain your understanding of loyalty:
 
JD: Because loyalty means many different things to different people, your interpretation will be slightly different to mine, but I believe that loyalty is all about creating an affinity with your customers so that they spend their disposable income with you rather than someone else. Essentially if you boiled all of this down, loyalty is about service. On top of that though, if you want to apply a system where you give someone a credit for coming and shopping with you that they can redeem later on, then you need a pretty robust system to do it. We all know of loyalty systems out there, like some coffee companies, who will give you a little paper card with a stamp on it, well what we’ve done is turn that technology.
 
KE: So how do you do that?
 
JD: At the high end we have systems that link to a retailer’s POS that look at every barcoded item in a customer’s shopping basket, whether on the web or actually in the shop, so that we can credit points and make special offers that are unique and interesting to them. That’s only possible when you integrate into the POS but with smaller shops you tend to have a very small POS and lots of them, making it this very difficult. What we’ve been able to do is put our technology directly on the terminal instead. We thought ‘how can we make it simpler’ and the answer was not to network it.  So you could have a single shop with a single terminal running the loyalty software. The only connector you have for these terminals is a three pin plug that you put into the wall; it’s not connected to a computer, it’s not connected to the payment unit... it’s a stand-alone loyalty terminal.
The points that are given to the customer are stored on the terminal so when the customer puts their card in, the points are debited from the device and the card is credited. When he comes back he can redeem those points either partially or fully. So you can have full earning and redemption with the GemPoint system. We’ve got ten tariffs, and those tariffs can be anything from double points, 100 point bonus... whatever they are, you can have up to ten different schemes. Plus, every person who uses a terminal has an ID to sign on and we’ve got about 50 of those, so if you’ve got 50 staff then they can all use the same terminal. If you were operating this then you would have to put in your ID before you started your shift. Then we’d know that who exactly was giving the points away. So really it’s a very simple mechanism of giving a card to a customer, giving them points and taking them off again. But then we thought how can we make it simpler still? The answer was ‘don’t have a commercial contract’. We do it on a straight-forward rental model, you can rent it for four months and if you don’t like it we’ll go and get it.
 
KE: Do many people give the terminal back?
 
JD: Well no, they don’t give it back - they like it. There is no contractual obligation; a retailer can rent it on a four-month contract initially and then can have a monthly rolling deal. Small companies don’t want long contracts and lease deals so we wanted to make this really easy for the smaller guys to use, adopt and enjoy. In essence what you’ve got is a very simple rental agreement, a very simple loyalty system which is very easy to use, which is absolutely under your control - it’s their business, so they decide how to give points out and how they use them. The retailer is completely left to their own devices to drive the scheme - we don’t have the right to tell anyone how to run their business. What we’re trying to do is provide a very simple to use and simple to understand platform that’s reliable and resilient.

 
KE: Why are these schemes important?
 
JD: The global retailer Tesco got into loyalty around 15 years ago with the launch of the Tesco Clubcard. What it enabled them to do is to understand the pattern of behaviour of its customers and to respond to things that its customers wanted. It changed the entire business model – stock lines, the configuration of the stores, it changed its promotions and offerings plus Tesco could watch what happened in real time at the till.
That’s why loyalty programmes work: if you can understand what your customers do and respond to that, in real time, then you will have a satisfied customer. Why is loyalty important to the average independent business? Well, customers have disposable income which they are able to spend anywhere – but you require that spend to be with you rather than with someone else. Customers have choice and loyalty schemes focus the choice on your products and services vs. somebody else’s products and services. So loyalty is all about creating an infinity between you and your customer.
 
KE: Do you think your average smaller retailer really understands that?  
 
JD: Yes, absolutely. I go into my small village shop and I get a smile; a smile is the most basic form of loyalty scheme. For small businesses loyalty is about making sure customers come back and spend money in, say, the village shop rather than driving eight miles to go to the supermarket. All small businesses require loyalty schemes – and believe it or not they’re doing it already. They might not have a mechanism like this to track their customers, but they are doing it in their own way. What this enables them to do is expand that in a more modern way and at an affordable level.