Consumers Want Loyalty (Rewards)
Consumers Want Loyalty (Rewards)
U.S. consumers have a desire for more loyalty cards in their wallets—even though they use only half of the programs they're enrolled in now, according to the newly released study: “Maritz Loyalty Report™: U.S. Edition,” which examines brand loyalty across six different industries.
More than seven in 10 of the 6,000 surveyed consumers said they had room for additional loyalty programs, even though the currently participate in an average of only 4.7 cards of the 7.4 programs in which they are enrolled, according to Bob Macdonald, president and CEO of Maritz Loyalty Marketing.
Only 35 percent of respondents were active in all of the programs in which they were enrolled, while 47 percent stopped participating in one or more programs in the past year. This high percentage of drop offs illustrates the importance of keeping customers engaged in loyalty programs, says Scott Robinson, Maritz Loyalty Marketing senior director of loyalty consulting. “Sixty-seven percent will modify where and when they buy and half will change brands depending on a loyalty program's benefits.”
So, it's essential that marketers recognize what will engage customers in a program and what will cause them to actively leave the program or to passively quit using it, Robinson notes. “Marketers can't afford to outspend each other,” he says. “They can't rely on enrollment discounts to maintain engagement. They need to focus on creating an experience.”
For example, loyalty programs should offer special experiences such as free upgrades, preferred seating, and similar benefits designed to meet customers' desires and go beyond simple discounting, according to Macdonald.
The report's best programs in this regard, based on customer satisfaction scores, were:
- Chase Ultimate Rewards, (84 percent) financial services
- Kroger Rewards (83 percent), grocery
- Carmike Cinemas Rewards (79 percent), entertainment
- Kohl's Rewards (73 percent), retail
- IHG Priority Club Rewards (67 percent), hospitality
- Southwest Airlines Rapid Rewards (58 percent), airlines
Beyond an engaging program, other essential elements of a successful loyalty program focus on communications and balancing those communications with the customers' desire for privacy, Robinson notes. Ninety-four percent of those surveyed said they want to receive communications from loyalty programs, but only 53 percent said that the communications that they receive are relevant. A program's delivery of relevant communications is closely tied to participant satisfaction, according to Robinson, citing the marketing axiom of the right message needing to be delivered to the right customer at the right time. Using the right channel and the right context are equally important.
Loyalty program participants are open to more frequent communications as long as they're relevant, Robinson adds, pointing to the study's findings that only 12 percent of loyalty program participants say they get too many messages. But one member's communication frequency and channel preferences may be far different from another's, so marketers need to pay close attention to those differences and recognize that preferences change. Consequently, marketers need to stay abreast of individual customers' communication preferences.
Similarly, to be effective, loyalty marketers need to determine the amount of personal information that a customer is comfortable with sharing and with the company using. Some customers like the idea of a company using previous purchases to make offers, while other consumers find this “creepy and weird,” Robinson says, adding that Maritz has developed a “cool to creepy” index for loyalty program communications.