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Four Ways 2020 Events Impacted Consumer Perspectives of Loyalty Programs

The historic events of 2020 have had a significant impact on society and life as we knew it. COVID-19 has amplified consumer concerns around wellness and finances, while heightened awareness around social injustices have driven many consumers to examine where and with whom they choose to spend their dollars. While much has changed, the results of our updated Merkle Loyalty Barometer survey indicate that many consumer perceptions remain constant regarding loyalty programs. Consumers continue to expect and appreciate discounts and savings, strong reward utility, gamification and engaging content, relevant experiences, and recognition and gratitude. What has shifted, however, is how consumers want these expectations to be put into practice in four key areas:

1. Ways to Earn - Clear and Consistent Savings

Increases in unemployment and financial strain due to the pandemic have amplified consumers’ focus on the value and savings that loyalty programs can provide. Brands should assess the value proposition of their loyalty programs, ensuring that a strong savings message is prominent and that it is clear and transparent how consumers can earn rewards. 

2. Gamification and Engagement - Connection and Control 

Social distancing has strained consumers’ connections to friends, family, and their community, creating a sense of isolation and lack of control. Because of this, consumer interest in engagement and gamification mechanics has increased. Tactics like milestone tracking and challenges can provide a feeling of purpose, control, and achievement, and leaderboards and shared social goals can foster a sense of community – both of which have been diminished in consumers’ daily lives. 

3. Personalization and Privacy – Heightened Sensitivity and Discomfort

The implementation of contact tracing to curb the spread of COVID-19, alongside overall mistrust of the media and the social unrest that is closely tied to demographic data, has increased consumer sensitivity and accelerated privacy concerns. This trend makes it increasingly important to inform consumers on how their information will be utilized to enhance their experience with the loyalty program and remind them of the brand’s commitment to its privacy policy.

4. Taking a Stand – Visible Shared Values

The survey results indicate that taking a stand on societal issues is a secondary driver of purchasing decisions, with quality and affordability being the primary drivers. This is representative of the market’s sensitivity to the uncertain economic impact caused by COVID-19 and is not specific to the unique needs of a brand’s consumers. Survey data aside, recent consumer behavior shows that many consumers are making purchasing decisions based on a brand’s actions (or lack thereof) on societal issues. When a brand takes a stand on societal issues, it allows consumers to identify and connect with the brand more deeply on their shared values. It is imperative that a brand fully understands its customer identity, preferences, and values to take effective and impactful action on societal issues.

Each individual has been impacted by 2020 in different ways and, despite the significance of these impacts, the enduring “secret” to driving loyalty remains: create an emotional connection and build trust—which can only be done by tailoring marketing strategies to ensure that individual consumer need-states are met.

To learn more about consumer perceptions of loyalty programs and the shifts that have occurred in 2020, see Merkle’s July refresh of the 2020 Loyalty Barometer Report.