Aug 5, 2016 | Customer Loyalty News

How Consumers Actually Use Loyalty Programs

by Margaret Link — Marketing at Thanx

New Survata survey data reveals how consumers interact with brands' loyalty programs — the answers might surprise you. We broke down the most interesting stats to help merchants avoid the pitfalls of traditional loyalty programs and instead, create a program their guests actually want to use. 

Most loyalty programs fail. Here's why:

1. Customers are members of multiple programs, but their engagement wanes over time.

70% of people are members of multiple loyalty programs, but most people only engage with a select few. 

While the typical American household is enrolled in 29 loyalty programs, they only actually participate in about 12 of them. Why would a customer sign up for a loyalty program, then totally neglect to use it? It's this engagement piece- the reason why customers fail to participate in loyalty programs long-term, that needs to be solved. That is the part that should scare you about this statistic — you can offer the best rewards ever, but most of your customers will statistically fall off of the wagon. When your customers stop participating in your loyalty program, you are at risk of losing their business long-term. 

2. Businesses ask too much of customers — requiring people to bring loyalty cards will limit engagement over time.

When asked what the biggest hassle of loyalty programs was, the ol' plastic card was the #1 agitator, with 37% of people surveyed responding that they disliked the experience of bringing a loyalty card or a punch card (our merchant partners know this well). Other things customers disliked? The lack of clarity surrounding rewards with traditional loyalty programs, and the process of providing personal information (phone number, for example) with every transaction.

3. Customers want better rewards.

Customers would prefer credit automatically applied to their credit or debit statements, as well as electronic coupons. 

Add value to the customer experience with a program customers actually use.

The only way a loyalty program can add value for merchants is when customers engage with the program long-term. Value needs to be added at all points in the customer lifecycle; be receptive to what customers are asking for from your loyalty program. 

Additional perks that customers wanted to see the most included:

1. VIP Program: Top spenders earn more rewards

2. Merchant feedback: easy, direct way to leave feedback to your favorite merchant

3. Shareability: Earn rewards for sharing your favorite brands with your friends.

 

See more here:

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We published “2016 Customer Loyalty Benchmarks," a guide designed to help multi-location merchants better understand customer behavior and improve marketing ROI. 

We dug through more than 20 million transactions to understand how customers make decisions... and we're making it available to Thanx Blog readers for free. Check out the eBook here:

 

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