Loyalty Programs: The Essence Remains the Same, but Models Are Becoming More Innovative

It is hard to find a retail outlet in Croatia where you will not be asked at the checkout if you have their loyalty card. This is the first question cashiers ask after ‘good day’ and is now completely commonplace. Loyalty programs have become an integral part of business for companies, which in this way attract and retain customers, and more importantly, gain insight into their desires and needs. They are offered by retailers, pharmacies, post offices, furniture sellers, household appliance vendors, almost everyone who trades in something, and even organizers of games of chance. Millions of loyalty program cards from various companies are found in the wallets of Croatian citizens or on the applications of their smartphones. The largest number of loyalty club members is found in consumer goods stores like dm and Konzum, whose numbers exceed a million.

However, the path to this achievement was not crossed overnight; it took years and required investments in designing loyalty programs through various marketing campaigns and discounts, but it has paid off. Because a strong customer base brings profit to the companies that have it, but customers also benefit from loyalty programs by collecting points that they can exchange for euros when paying bills, thus reducing them, or obtaining discounts through coupons, as well as some other benefits, depending on the type of store.

Collecting Points

The best example of the profitability of membership in loyalty clubs is dm, whose customers saved more than 85 million kuna or 11 million euros last year in this way.

– The dm active beauty loyalty program is one of the most popular loyalty programs in Croatia, and today it has more than a million active users. Our program offers a rich and diverse range of benefits for earning additional and multiple points that customers can exchange for a reduction in their bills when shopping at dm stores. When shopping at dm stores or the dm online shop, customers receive one point for every euro spent, and after collecting a minimum of 200 points, they can use them to reduce their bill. For example, a customer who has collected 500 points can reduce their bill by five euros – explains Gordana Picek, procurator and head of the Procurement and Marketing department at dm.

She adds that pregnant women and new parents who are also members of the dm active beauty program can expect special gift packages and booklets with coupons for earning multiple and additional points when purchasing necessary products.

It is important to emphasize that dm’s basic discount mechanism is designed to allow customers to decide for themselves how many points to exchange and at which purchase. In this way, customers can best meet their needs as they have complete control over the use of collected points. This is a feature of the program that dm’s customers greatly appreciate, as evidenced by the fact that in the last business year, users of the program dm active beauty saved more than 85 million kuna, which is 27 percent more than in the previous business year.

And for Business Users

– Along with numerous benefits within the loyalty program, we thank our trusted customers by continuously improving existing services and developing new ones. The new smartphone application My dm is fully integrated with the dm active beauty program, allowing users to make purchases through the app and activate and use coupons for earning additional and multiple points. In addition to providing customers with a simple and quick purchase in the dm online shop, the dm world app puts everything in the palm of every smartphone user because program users can track their points balance and all the news we bring them – lists Picek.

She emphasizes that by following market trends, last year they launched the dmLIVE service for app users, which allows them to learn about products from dm’s assortment through live video with the help of experts. Additionally, all viewers of the dmLIVE shows are offered exclusive benefits as well as opportunities to earn multiple dm active beauty points when shopping in the dm online shop and dm stores.

IKEA‘s vision is to create a better everyday life for as many people as possible, and it aims to achieve this through the loyalty programs IKEA Family and IKEA Business Network. This second loyalty program was launched at the beginning of this year and is intended for business customers throughout Croatia, supporting small businesses, but companies of all sizes are welcome in the new club. IKEA states that these are free programs that offer a range of benefits to customers and clients.

Thus, members of IKEA Family enjoy numerous discounts when shopping: free insurance for every case (if something breaks during transport or rolls away during assembly), numerous events and workshops such as the workshop on smart solutions for homes Home Smart, free hot drinks when visiting the IKEA Zagreb store, or more playtime in the Småland playroom. Owners of the IKEA Family card can receive a 10 percent discount on all merchandise at any Hoću knjigu bookstore in Croatia, and at the Zagreb Youth Theatre, with the purchase of two tickets, they receive a 50 percent discount on the second ticket.

Bonuses and More Benefits

Membership in the IKEA Business Network brings various benefits: once a year, a free consultation with IKEA design experts, a 50 percent discount on the Interior Design service for apartments, houses, and business spaces, and they can also enjoy free black coffee from Monday to Friday in IKEA’s Swedish restaurant, as well as other discounts. The IKEA Family club currently has 413,644 members in Croatia, while the IKEA Business Network has 2,670 members. Given that this is a completely new loyalty program, the number of members in the IKEA Business Network is increasing day by day.

Lidl Croatia has had the Lidl Plus app for over two years, a digital loyalty card that brings customers savings and numerous benefits. During the week, the app offers between four and seven coupons that users can utilize, and after each purchase, there is a feature called Discoverer, which brings additional coupons with extra discounts.

The latest benefit in the app is Coupon Plus, which rewards app users’ purchases; when they reach spending thresholds, they receive a free product that they can pick up in-store. Additionally, every receipt generated in the Lidl Plus app is stored, so in the case of purchasing non-food items, it serves as a guarantee that is valid in all stores just like a printed receipt. The number of users of the Lidl Plus app is growing day by day, and Lidl is preparing more benefits to reward customer loyalty.

Croatian Post launched the loyalty program My Post in 2016, which currently has more than 425,000 users. Program users collect points through a loyalty card used when paying for services and products at post offices, earning one point for every 1.3 euros spent.

Combining Coupons

Collected points can be exchanged for coupons for the online store Yellow Click, for purchasing from more than 40,000 available items.

One of the advantages of coupons is the ability to combine them – users can use one coupon in multiple transactions or multiple coupons for one transaction, as long as their total value is not exceeded. Additionally, points from the card can be linked with members of the same household or family, allowing the conditions for rewards to be met even faster. A large number of users actively use their loyalty cards, which is the best indicator of interest in the program.

At Konzum, they believe that constantly providing additional value to customers for their invested money is precisely the factor that customers recognize as an important criterion when choosing a retailer. The market is saturated, but research shows that Konzum has a large reach among customers, and most of them have made a purchase in one of its stores at least once a year. In Konzum’s loyalty program, the key role is played by the MultiPlusCard, the central year-round loyalty reward program for Konzum customers, also the largest loyalty program in Croatia, which the company launched in collaboration with Zagrebačka banka back in 2010 and which has around a million users annually. With the MultiPlusCard, Konzum aims to be a place where customers receive additional value for their money.

Expanding the User Base

For example, since September 2022, customers using the MultiPlusCard have been able to make immediate purchases of as many as 1,500 products at an average discount of 20 percent, and until August 31, 2023, users of this loyalty program in more than 150 Konzum stores on the coast and islands receive a five percent discount on every purchase.

In creating the loyalty program, Konzum primarily follows the lifestyle of the modern consumer, but also important social issues, considering that as the largest domestic retail chain, it carries the greatest responsibility to the community in which it operates. Examples of this are the loyalty programs ‘Health Lovers’, ‘Zumići’, ‘Morsovci’, and ‘Return of Health Lovers’, which were designed with the idea of socially responsible action through education aimed at children, but also adults. Konzum is aware that the extraordinary success of its loyalty programs is largely due to loyal customers, so all activities are designed in accordance with their wishes and needs, as their satisfaction and well-being are important to them.