Marcus Hadfield, Chief Strategy Officer, Apadmi
“Lidl’s decision to overhaul its loyalty scheme is a very rational one. Coupon-based rewards are expensive and not always easy to control. Points systems are easier to predict and account for, simpler to communicate and can neatly align with data strategy. So, from a business perspective, this move makes complete sense.
But customers are a lot more emotional. They make decisions based on feel and finance. And right now, Lidl’s customers aren’t feeling it.
We know from speaking to consumers that a lack of a clear value exchange is a barrier, and creates an impression that the reward isn’t worth what it costs to earn it – even if, on paper, it’s a better deal. Lidl has just handed their customers exactly that feeling, at scale, overnight. Their customers enjoyed the immediacy and ease – and emotional win – of the free bakery treats. Spending just a tenner could get you a croissant; now it’s harder work (and more money). They are feeling loss, not gain.
There will be loads of spreadsheets that can explain why this is better for the shopper and Lidl, but customers don’t think that hard. Whilst the new points system is more flexible and will allow Lidl to run double points campaigns, partner offers and targeted rewards in ways the old coupon model couldn’t support, the experience isn’t as enjoyable. Lidl will only unlock the value of the revised programme if the experience layer on top of it is rewarding enough to keep customers engaged. They’ve got work to do to make the most of messaging and the mobile experience to keep things interesting.
Should Lidl reconsider? It’s too late for that, but they should bring back that feeling of winning and feeling good with every shop. They’ve no doubt built a points platform that can deliver genuinely personalised, high-value moments. They need to move fast to make those moments matter for their loyal shoppers.
The Lidl Plus app is in the pockets of millions. It has played a massive part in their record market share growth – now 8.4%. It is loved by customers across Europe, and it would be madness to lose that feeling.”
