For those businesses wondering if their loyalty rewards programs are effective, the answer is “Yes,” according to an annual study conducted by Bond Brand Loyalty, a company focused on customer-centric marketing and building loyalty to brands.
The online survey, ’15 Loyalty Report, targeted over 11,000 consumers in North America and found that 70 percent of those participating in loyalty programs alter their buying patterns to meet the demands of the programs and to get the most from their benefits. This marks an increase of more than five percent over last year. In addition, 64 percent of those surveyed indicated that the purchases they made were adjusted as well and for the same reasons (a nine percent increase).
Customer satisfaction with loyalty programs increased by four percent over last year, with 43 percent reporting being “very satisfied” with their programs. This may account for the growth in program enrollment figures as they increased by almost three per customer to an average of 13.3.
What is fueling consumer engagement in loyalty programs is more than simply getting something in return. While the nature of the reward, how easily rewards can be redeemed, and how quickly they can be accumulated are the top economic drivers, the study found that the program must also be attractive enough to warrant participation, meet the needs of the customer, and deliver an enjoyable experience.
While the functional elements are still key attributes, the report observes that “relying on these…is a pitfall to which many brands have succumbed – locked in to an endless cycle of outspending the competition on discounts…and many brands cannot simply continue to one-up or out-discount the competition while still expecting to remain profitable.” In fact, the study found that the second most important attribute was the brand meeting the needs of the consumer, and suggests that this can be a profitable approach.
According to Scott Robinson, Senior Director of Loyalty Design and Solutions at Bond Brand Loyalty, “Consumers are now making a shift to view loyalty as a relationship with a brand and not just a way to get a return.”
On a final note, the study suggests that while almost all loyalty programs are built on the traditional foundation of functional financial attributes, these may no longer be sufficient. As competition for loyalties increases, those brands that can adapt by addressing customer needs with solutions tied to their brand while at the same time reinforcing the ease and enjoyment of the program are the ones that will separate themselves and continue to build a brand-loyal customer base.
Reference:
Bond Brand Loyalty. “ ’15 Loyalty Report,” January, 2015.
BusinessWire. “Maritz Loyalty Marketing Rebrands as Bond Brand Loyalty to Lead Evolution of Marketing Industry and Launch Complete Brand Loyalty Agency,” June 03, 2014.
MarketingCharts. “More Loyalty Program Members Modify Shopping Habits to Maximize Benefits,” April 07, 2015.
