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What Sainsburys do that you shouldn’t

Written by Jose Gonzalez on February 6, 2010 - View Comments
Categories: Having a system, Posts & Articles, Your Reputation

A few days ago something happened to me in Sainsbury’s which caused me to rant for an hour afterward – in disbelief – at their antiquated points system.

In fact, every time I drive past Sainsbury’s I’m now reminded of this, which is bad for them and a lesson to every business owner.

It’s bad for them because I now drive past Sainsbury’s rather than into the place, and it’s a lesson to the rest of us because the last thing you want is your customers avoiding you and going straight to your competitor because of something you did to them.

How Sainsbury’s lost me

It started out as a normal midweek day. I found myself shopping in Sainsbury’s with my other half. We were in Scotland at the time, picking up some groceries.

At the till, we realised that the Sainsbury’s Nectar card we’ve been using for quite some time now must have amassed quite a few points.

We asked, and the till woman informed us that we had a gazillion points worth millions of pounds. She didn’t say it that way, nor did she say those words exactly, but the fact that we could cover the shopping we picked up sounded like music to my ears.

It’s always nice to receive an unexpected bonus, or to find a stray £5 on the floor. These are small pleasures that can change the entire mood of the day and be remembered for a long time.

So, armed and pleased with this new knowledge, we decided that it was time to redeem the points on the card.

I’m talking about the Nectar card.

If you’re not familiar with it, the Nectar card is a loyalty card issued by a handful of retailers. That’s my definition of it, and whether it’s technically correct or not doesn’t affect the argument of this post.

The point here is that Sainsburys use the Nectar card to reward their customers with points every time they shop at one of their stores. Once there are enough points in the card, the customer can then redeem the points and use them to pay for some more shopping.

In other words, the points are exchanged back into purchasing power, as long as whatever is being purchased, is being purchased from a store that participates in the Nectar point scheme – in this case, Sainsbury’s.

Again, my definition may be a bit off the mark here (because I didn’t read the small print…) as far as the organisation behind the Nectar card is concerned, but this is irrelevant either way to this business lesson (and to my rant).

What is relevant on the other hand is that when we tried to redeem our hard-earned points, we were told that this was not possible because the card had been acquired from a Sainsburys store in London.

Does that make any sense?

The fact that the points had been gathered by shopping in this particular store don’t seem to matter.

The real problem for me is that I’m not planning to swing by the original store in London any time soon. In fact, I’m not even sure if I will ever be in that particluar store again! But even so, if I picked up a card in a branch 3 miles away, let’s say when I was visiting my mother and I decided to pop into her local Sainsbury’s to pick up a few bits, it’s still not convenient for me to have to travel 3 miles out of my way each time I want to redeem my points, instead of being able to redeem them at my own local store.

Sure, it’s a chance to visit my mother (some would say) but what if she moves to somewhere else and I now have no need to ever pass that part of town again? And what if that part of town was not 3 but 30 miles away?

Sainsbury’s system is not only inadequate, but unrealistic and highly inconvenient.

And so there we were, standing at the till, being told that our loyalty to Sainsbury’s only counts in one store.

Even though we’ve been consistently giving them money through various branches all over the place…

And therein is the lesson.

I don’t care whether it’s the Nectar group that set out the rules: Sainsbury’s are the ones who decided to adopt the nectar card to reward their customers. They adopted the system, so they are responsible for how the system works within their own organisation.

Nothing pleasant went through my mind when I had to pay for items that I find more expensive than at other stores (it wasn’t my idea to shop at Sainsbury’s) whilst holding a card full of points, which reminded me of just how many times over the past 24 months I’ve been shopping at Sainsbury’s.

Yes, you can say I should have read the small print. But when a friend tells you something, do you read the small print?

Sainsbury’s are not my friend, but the very concept of a loyalty card implies that I am being rewarded for my custom, that I am appreciated. It doesn’t imply that we’re entering into some sort of legal contract filled with pages of small print.

Evidently we are. My bad.

It’s a question of semantics: the key is in the word loyalty.

The bottom line is that Sainsbury’s hacked me off, and now I gladly drive a couple of extra miles in order to shop at a different non-Sainsbury’s store.

For the small business owner, this can be make or break. For the big fish, it can be the beginning of a steady decline in customer loyalty.

Why is this so bad?

The real problem (for Sainsbury’s) is that in this day and age, consumers are spoilt. Both you and I have choices when it comes to shopping. Banks, high street stores, phone companies, supermarkets and just about anybody with enough capital and enough competition try to secure our continued business, and loyalty cards are one of the ways in which they attempt to do this.

Generally, it is a very good time for consumers, because everybody’s falling over themselves to provide us with the best services and products just to retain our custom.

I don’t regard as a luxury the fact that I can withdraw cash from an ATM machine in central London, jump on a train, pay for coffee with the very same bank card on the train, and then draw some more cash from a different ATM in Edinburgh.

I don’t even blink at the fact that I can use ATMs from different banks to my own in order to access my own money.

In truth, it’s a miracle and the great convenience. The banks bent over backwards to provide us with this luxury, and the truth is that there is no excuse not to be able to do this in a networked world.

But the real point here is that I’m not impressed by these facts: I expect them. The fact I expect them doesn’t make me bad, clever or arrogant. Instead, it’s a reflection of how many choices I have as a consumer.

I didn’t demand any of these things (but thank you, I like being able to buy coffee whenever and wherever). Instead, the big establishments spoilt me – and you – with these great choices.

Which brings my argument full circle: how can Sainsbury’s justify the ridiculousness of their system when it comes to redeeming loyalty points, in a time when consumers expect to be able to use cards in just about any conceivable way?

Every (or most) Sainsbury’s supermarkets in the UK take part in the Nectar point scheme. Is it not logical then to expect to be able to redeem a loyalty card issued by Sainsbury’s in the first place, in any branch? Do they really think that in the 21st century nobody moves around, that we shop at the same supermarket throughout our lives?

To me this is the same as insulting your customers: something you can’t afford to do when you have competitors who will gladly do things better than you do to pick up the customers that you loose through your carelessness or through your inability to put in place a system that reflects your customers’ needs.

If you’re a small business owner then you certainly can’t afford to create this kind of attention between your company and your customers: don’t hide important things in small print, and if you’re going to implement a loyalty system, make sure it’s fair, because fair and loyal the two words that belong in the same family. Introducing small print here is an opportunity for friction to arise.