By Dr. Eugene Brink
Almost as ubiquitous as the purchases you make, is the omnipresence of loyalty programmes. Many of us have a wallet or purse that is bulging with store cards rewarding with points or other goodies when you swipe.
As the demand, competitiveness and popularity of loyalty programmes grow, so does consumers’ demand for improved quid pro quos.
“Loyalty programs are ubiquitous, but consumer appetite for the promise of savings and recognition is not dwindling. Consumers are asking for more and expect programmes to deliver beyond the points,” says Emily Collins, a principal analyst focused on customer loyalty at Forrester.
To be sure, the points still matter but they are no longer the sole reason for joining loyalty programmes. US-based TechnologyAdvice surveyed over 3000 people in 2017 to find out why they seek to join loyalty programmes.
A whopping 80% of respondents indicated that they were more likely to shop at stores that offered them some kind of loyalty deal. Some 57% said they join such programmes to save money, while 37% said “receiving rewards” is what they’re after and 3.6% stated that they like to earn rewards.
“We first wanted to establish what motivated people to join loyalty programs. The clear takeaway is that most consumers join programs hoping to save money, or receive discounted products,” says Cameron Graham, one of the authors of the study. “The second most cited reason for participation was receiving rewards. This is the strategy employed by companies such as Starbucks with their My Starbucks Rewards system. Instead of offering consistent discounts, consumers can build up points, which can then be redeemed for rewards or free products.”
Moreover, The Loyalty Report 2018, published by Bond Brand Loyalty, an annual report based on a survey of 50 000 consumers in North and South America and Europe, found that consumers spend 37% more with brands when they are loyalty programme members. Seventy percent are furthermore more likely to recommend brands with good loyalty programmes, and 77% stated that loyalty programmes make them more likely to continue doing business with a brand.
“But the loyalty game is changing, as evidenced by new players, evolving experiences and increased customer expectations. Regardless of sector, brands need to rethink their current loyalty strategy in order to increase customer engagement and build loyalty,” says Bob Macdonald, president and CEO of Bond Brand Loyalty in a statement.
The report also cautions retailers to avoid the four most common sources of loyalty member frustration:
- Having points expire;
- Not having desired awards available (because of blackouts, catalog changes or out-of-stocks);
- Representatives who aren’t knowledgeable about the programme; and
- Receiving an “overwhelming” volume of emails.
The Forrester survey showed 72% of online adults belong to at least one loyalty programme and, on average, those who belonged to loyalty programmes said that they belonged to nine. Fifty-six percent of consumers reported that they enrolled in loyalty programmes of brands they like. A slightly higher percentage (59%) said they like the special offers and treatment not available to other customers is important to them.
In South Africa, 75% of consumers belong to loyalty programmes, according to the Truth & BrandMapp Loyalty Whitepaper survey. Not surprisingly, the most popular loyalty programmes in the country is the Clicks Clubcard and Pick ’n Pay Smart Shopper, according to various surveys. Other popular programmes include Vodacom Rewards, Woolworths Rewards, FNB eBucks, and Jet Thank U.
Lastly, the BrandMapp survey showed that cards still trump apps as far as the use of loyalty programmes are concerned: 59% preferred a card to 47% who preferred to make use of an app.
BusinessTech, 26 October 2018, “These are the best loyalty programmes in South Africa”, https://businesstech.co.za/news/finance/279973/these-are-the-best-loyalty-programmes-in-south-africa/.
Cameron Graham, 23 July 2014, “Study: Why customers participate in loyalty programs”, https://technologyadvice.com/blog/marketing/why-customers-participate-loyalty-programs/.
Emily Collins, 8 May 2017, “How customers really feel about loyalty programs”, http://www.oracle.com/us/solutions/consumers-loyalty-programs-3738548.pdf.
Marie Griffin, 21 May 2018, “More than one-third of shoppers would pay for enhanced loyalty programs”, https://www.retailtouchpoints.com/topics/crm-loyalty/more-than-one-third-of-shoppers-would-pay-for-enhanced-loyalty-programs.
Tina Mulqueen, 1 August 2018, “Beyond points: Companies are using innovative rewards programs to draw In customers”, https://www.forbes.com/sites/tinamulqueen/2018/08/01/beyond-points-companies-are-using-innovative-rewards-programs-to-draw-in-customers/#11db40a4732d.
WiGroup, 2018, “South Africa’s loyalty and reward landscape in 2018”, https://www.wigroupinternational.com/2018/12/12/south-africas-loyalty-and-rewards-landscape-in-2018.