Loyalty Report

The Top 3 Alarming Discoveries found in the 2015 Loyalty Report

I recently read this 2015 Loyalty Report conducted in January of this year. It is a sample of over 11,000 North American consumers in which over 1,700 have household incomes greater than $70,000.  It confirms that consumers overwhelmingly agree that loyalty programs are worth the effort and the extent to which loyalty programs influence customer behavior shows no signs of diminishing.  The report explores year-over-year changes in consumer attitudes and behaviors to uncover insights on loyalty initiatives, brands, and over 200 programs in industries such as retail, consumer packaged goods, financial services, entertainment, and dining. Much of this content is taken directly from this report. The report, conducted by Bond Brand Loyalty, shows 5 key finds, but we are focusing on the top 3 which are:

1. Customer Loyalty program enrollment is up, despite a limited capacity for engagement.

Meaningful year-over-year increases are observed on all key sentiment trackers:
  • “Programs are definitely worth the effort”
  • “Programs make me more likely to continue doing business with certain companies”
  • “I modify when and where I make purchases in order to maximize the benefits I receive”
  • “I modify what brands I purchase in order to maximize the benefits I receive”
  • “Programs are part of my relationships with the brands”
The loyalty report shows that an average consumer is enrolled in 13.3 loyalty programs, up from 10.9 per person in 2014.  So, consumers are still very likely to enroll in a loyalty program and are actively enrolled in many. Despite the increase in active enrollments, the average number of programs in which people are active, (i.e., actively purchasing) has decreased from 7.8 to 6.7. This confirms that consumers can only actively engage in so many programs. That means it is more important than ever for brands to discover how their loyalty and engagement programs can stand out from all the other programs out there.

2. The program must serve the brand, not just the program.

34% of customers say they would not be loyal to the brand if it weren’t for the brand’s loyalty program, and programs are seen as an extension of the brand as affirmed by the 76% of Americans who think that loyalty programs are part of their relationships with brands. As such, the ultimate role of the loyalty program is to drive loyalty to the brand; it is not sufficient for programs to drive program satisfaction without fostering corresponding and sustained loyalty to the brand.

3. Mobile in loyalty not only improves the program experience but ultimately drives loyalty to the brand although only 12% actually download the app.

Mobile is a strategic high ground in loyalty. It’s at once a combination of a communication conduit, a unique identifier, and a payment vehicle. It is the customer’s link between the online and the real world. Mobile adds utility to marketing as part of improved customer experience in a way that loyal customers appreciate and yet there is contradictory data regarding whether consumers want to interact with programs via mobile. While 48% of members agree, “I would like to engage with loyalty programs through my mobile device,” only 12% of customers have downloaded a program app, and 60% of smartphone owners are not aware whether or not their program even offers a mobile app. This is a great opportunity for a program that utilizes mobile capabilities but does not require an app to download. While the role of mobile in loyalty is, in part, to improve the program experience itself, the higher-order objective is to improve the brand experience overall and, ultimately, drive loyalty to the brand. More than ever, today it is important for businesses to provide an easy to use program that both effectively rewards and engages their customers. It’s obvious that people’s wallets are full of loyalty cards and punchcards, so stand out with a digital rewards program that customers will remember and enjoy.  ( 13 cards in a wallet is a load!) With people only using about 50% of their loyalty cards is also important to keep them engaged with special offers, announcements, etc. to keep your brand ever-present in their minds.

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