Instant Redemption Opportunities Attract Loyalty Program Participants

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When it comes to con­sumers choos­ing one loy­al­ty pro­gram over anoth­er, near­ly half (47%) of con­sumers polled said that instant redemp­tion oppor­tu­ni­ties — such as cash back at the reg­is­ter — were an incen­tive that could poten­tial­ly entice them to use a par­tic­u­lar loy­al­ty pro­gram more than oth­ers, accord­ing to recent research by Mintel.

Con­sumers are sim­i­lar­ly attract­ed to rel­a­tive­ly gen­er­ous cash back oppor­tu­ni­ties — an option that would be the decid­ing fac­tor for 36% of respon­dents. Mean­while, con­sumers are some­what dis­en­chant­ed with air­line miles; only 7% of those sur­veyed say a pro­gram that offers air­line miles would be an effec­tive incen­tive to choose one over anoth­er. These con­sumers tend to be in the high­er income groups.

In any sec­tor that uti­lizes loy­al­ty mar­ket­ing, loy­al­ty pro­grams are fast becom­ing a very impor­tant part of the rela­tion­ship with the cus­tomer,” says Susan Menke, VP, behav­ioral econ­o­mist at Mintel Com­pere­me­dia. “It seems that now is the time to focus on adding or improv­ing loy­al­ty pro­grams to help engage cus­tomers and main­tain and even grow their rela­tion­ship with the post-recession con­sumer.”

So, once they’ve cho­sen a rewards pro­gram, what do con­sumers want to see more of? Sixty-one per­cent of respon­dents say low­er over­all costs for mer­chan­dise they would have pur­chased any­way is an impor­tant attribute of a loy­al­ty or rewards pro­gram. Get­ting mer­chan­dise or tak­ing trips that they wouldn’t nor­mal­ly be able to take was deemed impor­tant by 25% of con­sumers.

Loy­al­ty pro­gram mem­bers are quite often the most prof­itable cus­tomers for mar­keters, and those who use loy­al­ty pro­grams tend to be more brand-loyal,” adds Susan Menke. “By per­son­al­iz­ing redemp­tion oppor­tu­ni­ties and offer­ing easy to redeem sav­ings, com­pa­nies can lure and retain more cus­tomers.”

Twenty-four per­cent of those sur­veyed say they active­ly exam­ine cred­it card offers in order to com­pare rewards pro­grams, while 10% have switched to a dif­fer­ent pri­ma­ry cred­it card in the past because of a bet­ter rewards pro­gram.

[Source:  "Instant redemp­tion oppor­tu­ni­ties lure in loy­al­ty pro­gram cus­tomers, reports Mintel."  Mintel.  17 Nov. 2010.  Web.  19 Nov. 2010.]