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Aussies engage with loyalty schemes

News, 26 August 2015

SYDNEY: Australian consumers are more active in loyalty programs than ever before, with a significant proportion buying items they don't need just to earn rewards, a new study has found.

A total of 1,367 consumers who were members of at least one loyalty program – and 84% of Australians fall into this category – were surveyed by by strategic loyalty consultancy Directivity and retention agency Citrus.

The subsequent For Love or Money report stated that 59% of members were active in all of their programs – the average number of memberships was 3.8 – and that this represented a 31% incremental increase from a similar 2013 survey.

They were also spending more: 82% of respondents indicated that they tended to buy more from those companies whose loyalty programs they were members of, a slight increase on the 80% figure of 2013.

And 16% confessed they even bought things they didn't need in order to earn rewards, a figure that jumped to 26% for men under 45.

"If you do the maths, that's a reasonable additional spend that goes straight to the bottom line," observed Adam Posner, report co-author and CEO of Directivity.

"Loyalty programs are a real business imperative for driving brand loyalty and profitability," he said. "While consumers are telling us they're more selective with their programs, they're also more active and engaged."

One reason for that is that brands are keeping their programs simple and fewer people are dropping out.

The research also revealed that consumers are slow to embrace new technology: two thirds (67%) of members preferred a traditional loyalty card while only 10% would choose a mobile app to interact with a program.

"We found this one of the most surprising findings of all," said Peter Noble, report co-author and CEO of Citrus. "It goes to show that getting the card into a person's wallet or purse is a critical piece of brand real estate and connection."

The report also revealed that members would like some form of acknowledgement for interacting with brands: 53% wanted to be rewarded for answering surveys and 46% for opening emails.

Data sourced from The Loyalty Point; additional content by Warc staff