Warc Blog

Loyalty programs can do more

23 May 2013
MELBOURNE: Loyalty programs do not equal customer loyalty, but there are significant opportunities for retail brands to become more valuable to consumers by offering multiple emotional and transactional benefits, a new report has argued.

For Love Or Money?, from strategic marketing company Directivity and digital agency Citrus, examined Australian loyalty programs, based on the findings from an online panel of 1,010 Australians over the age of 16.

It found that while 80% of consumers buy more from retailers with loyalty programs and 55% choose brands that have a program compared to those without, just 46% feel more loyal to the retail brand despite being a member of their program.

Some 41% of respondents felt loyalty programs had improved in recent years and offered good benefits to members. The authors suggested that this presented an opening for loyalty programs to "strive to be more valuable".

Unsurprisingly, most consumers rated financial rewards highly, with 80% saying discounts were very important when making purchases.

Points-based programs where members can redeem points for vouchers, products or other rewards were the second most popular benefit, on 77%.

The unexpected was also rated highly, in third place with 67% valuing surprise gifts or rewards that arrived without making a redemption.

"Basic monetary rewards give retailers a 'ticket to play' in the loyalty game," said Adam Posner, CEO of Directivity, "but the real opportunity lies in building deeper engagement with members through more personally relevant, unexpected and emotional rewards."

"This plays out in the research which shows surprise rewards such as a gift on your birthday, exclusive offers or special experiences go a long way to overcoming the belief that programs don't offer any real value," he added.

His words were echoed by Citrus CEO Peter Noble, who observed that while financial rewards were the motivation for joining loyalty programs, "a winning program is one that also has multiple emotional and unexpected benefits creating an element of 'surprise and delight' and tailoring offers based on consumer needs and preferences".

Coles Flybuys, Woolworths Everyday Rewards and Qantas Frequent Flyer were the loyalty programs most mentioned by respondents as 'doing a particularly good job'.

Data sourced from Directivity, Citrus; additional content by Warc staff

 
Envelope
EMAIL UPDATES

Sign up to Warc News – free daily bulletins on brand and market strategy, digital media and innovation


 

News content feedPrint