Toronto based Maritz Loyalty Marketing surveyed 6000 consumers in 2013 to determine American attitudes and behaviors in regard to their participation in loyalty rewards programs. Their findings can be very useful to small, local businesses that have a loyalty program or are planning on one in 2014.
The number of loyalty rewards programs in the US has skyrocketed over the past year or two. As consumers we are hard pressed to find a retail store that does not have one. The fact is, with so many programs out there, merchants now must compete for consumer participation in their programs.
According to the survey, the average consumer belongs to 7.4 loyalty programs and 71% would like to have more, were it not for the complexity of carrying cards and key fobs. In an earlier study 52% of consumers cited the need to replace the numerous cards and key fobs they were expected to carry with a simpler mechanism. 57% agree with “I modify what brands I buy to maximize the loyalty benefits I receive”, and 80% agree the programs are worth the effort. A full 70% say that the programs they participate in are an important part of their relationship with the brand.
These are pretty powerful numbers and should serve as real incentive to those businesses who do not yet have loyalty programs.
Consumers also identified some barriers to their participation in loyalty rewards programs. A whopping 68% of consumers cited fees as a reason for not joining a program, and 66% cited irrelevant rewards (things they did not want or rewards that were too insignificant to warrant their attention). Further, 53% of Members enrolled in a program stopped participating (shopping!) without notifying the merchant. So for a loyalty rewards program to be effective, it must have the ability to identify and engage participants that have passively opted out of their program. Only 7% of those who stop using a loyalty program actually notified the merchant of their intention to opt out.
Finally we have the issue of communications. A full 94% of Members said they like receiving communications from merchants, and yet only 53% described the communications they actually received as relevant. While many merchants fear sending communications too often, only 12% of consumers said they received too many communications. This clearly indicates that simply sending email and text messages to consumers is not a viable marketing plan. The timing and content of all messages must be carefully planned to guarantee relevancy to recipients.
It is clear that 2014 is the year for small, local businesses to employ intelligent loyalty rewards systems that compete effectively against the big brand programs and do so with the help of Loyalty Marketing professionals.
By Glenn Gilchrist