They Don't Want No Stinkin' Badges; Loyalty Users Want Discounts

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Consumers aren't playing games here. They know what they want out of loyalty programs, and what they want is cash.

Badges don't wash with "Sierra Madre's" Alfonso Bedoya--or consumers.
Badges don't wash with "Sierra Madre's" Alfonso Bedoya--or consumers.

Asked about their primary motivations for joining loyalty programs, 57% of consumers said “saving money,” and an additional 38% said “receiving rewards.” Gamification payouts such as the badges distributed by FourSquare have apparently had their day. Forty-four percent of consumers said they'd be less likely to join a loyalty program that used such social rewards, and an additional 40% said they'd be much less likely.

These are the key findings of a survey of 3,162 U.S. loyalty program users conducted by TechnologyAdvice, an online service that hooks up business operators with tech service providers. The company had noticed a strong uptick in digital loyalty program adoption by SMBs and local businesses and wanted to tap consumer insights to share with its customers.

Insight number one turns out to be that the grocery chains that built loyalty card programs decades ago on numerous, small discounts had it right. Such a straightforward model still rules, the study says, whether the program be card-based or digital. Consumers want rewards that put cash in their pockets, not emblems on their smartphones.

Consumers are so single-minded about the value proposition of their loyalty programs that they're format agnostic. Thirty-seven percent said they preferred card-based programs, 33% favored digital, and 30% were undecided.

The digital loyalty case is made, however, by apps. Fifty-nine percent of survey respondents said they'd be more likely to enlist in a program that had a mobile app.

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