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Poll: Slow Rewards Boost Loyalty Program Defection

When consumers leave a loyalty/rewards program, 70 percent cite the length of time needed to amass points as the main reason, according to a poll released yesterday commissioned by Maritz Loyalty Marketing.

The figure jumps to 79 percent in the 18-24 age group.

“Marketers need to provide consumers with realistic and achievable goals,” said Gail Sneed, market development director at Maritz Loyalty Marketing, a loyalty marketing solutions provider in St. Louis. “Particularly with the crucial college-age demographic, it's the chance to win or lose a lifelong customer.”

The poll also found that customer defection resulted from other perceived problems such as: “not being rewarded properly” (23 percent); “disliked the fee” (22 percent); “disliked the reward options” (20 percent); “other programs seemed better” (18 percent); “program rules kept changing” (17 percent) and “poor customer service” (16 percent).

Individuals with income surpassing $125,000 spend money and collect points faster, but they are choosy and likely to comparison shop. Of this demographic, 27 percent left a rewards program because “another company's program seemed better” or they didn't like the reward options.

“The customer has to be able to believe that they can earn an appealing reward in a reasonable amount of time,” Sneed said. “Effective loyalty programs use analysis and modeling tools to ensure the right rewards are offered to the right customers and are achievable within a reasonable length of time. Programs that customize potential rewards based on the individual customer's hobbies and interests hugely increase reward program satisfaction.”

The poll also revealed the Internet's importance as a communication tool. When asked, most people prefer to be updated about their rewards programs via the Internet (58 percent), and 9 percent said that they even stopped participating in a rewards program because they got too much mail from the company. This trend is even more common among customers ages 18-24: 65 percent say they prefer communication via the Internet, and 13 percent stopped participating in a program because they got too much mail from the company.

“A robust loyalty program will include a link on the company's Web site where customers can immediately access their reward points, easily determine required point values and redeem points with the click of a mouse,” Sneed said.

Maritz Research conducted the survey earlier this year to gauge attitudes and behaviors toward rewards/loyalty programs for retailers, hotels, airlines, credit cards and restaurants. Data are based on 1,047 interviews with randomly selected adult participants in an online panel.

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