Your clients likely know that keeping a customer is less costly than scoring a new one. If your clients want to keep customers AND add new ones, they need to enhance and promote their loyalty programs.
The new Loyalty Report from Bond is based on a survey of more than 50,000 members of 800 loyalty programs. Over 70% of respondents say they value these programs as part of their experiences with a brand. For the marketer, a well-run and promoted loyalty program is the path to higher sales. While 87% of members expect customized rewards and engagement, only 21% say the marketer encourages them to use the loyalty program. This is a huge disconnect!
If your clients don’t make their programs attractive and easy to use, they risk losing clients. In fact, only about 29% of consumers say they are "loyalists." The rest are not as engaged and may decamp to another marketer for a better deal. The findings of a Maritz-Wise study indicate shoppers will defect to a competitor because of:
- Price 57%
- Product quality 29%
- Availability of products/services 8%
- Recommendation from friend/family 5%
Your clients can address these issues using technology to communicate with loyalty program members. Over 90% of these customers are interested in VR, chatbots, wearables, AR/360 video and biometrics in terms of hearing from their favorite retailers.
Another strategy might be to roll out a pay-to-play loyalty program. Analysts point to Amazon Prime as a famously popular program which bestows benefits like free video in exchange for the annual fee. Over 40% of millennials and Gen Z consumers are willing to pay for a loyalty program if it offers a richer experience.
The Bond survey reports that loyalty programs are faring better in some sectors than in others. For example, programs in the grocery, credit card and dining sectors enjoy satisfaction rates of 50%, 48% and 48%, respectively. On the other hand, apparel-related loyalty programs score 38% and the airlines’ programs come in at 36%.
Talk with your clients about how to improve the design and advertising of their loyalty programs. To understand the demographics of consumers who maintain memberships in multiple programs, check out the AudienceSCAN report on Loyalty Card/App Users in AdMall.com. Remember that consumers are seeking programs that meet their needs, are enjoyable and improve their brand experiences.