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What Consumers Think of Loyalty & Reward Programs, Part 1

With the quickly evolving landscape of loyalty marketing, we’ve released our annual Loyalty Barometer Report to keep you current on the state of loyalty by diving into key themes and trends. Here are some of the top takeaways from the 2019 report:

Evolution of the Loyalty Landscape

A key shift in loyalty marketing over the last year has been the rise of emotional loyalty and a greater focus on “Big L” loyalty (the overall brand experience), not just “Little L” loyalty (the loyalty program mechanism).

Loyalty programs are now ubiquitous in the marketplace, even across verticals where they weren’t traditionally found (insurance, banking, automotive, and more). Because of this, consumers are more demanding in their expectations of a company’s loyalty program and more discerning about which brands will actually earn their loyalty. Brands can no longer rely solely on the “little L” to drive true loyalty, and the need to consider the entire brand experience is crucial.

To keep your loyalty initiatives relevant in 2019 and beyond, focus on the following:

1. Free products and discounts remain king of rewards:

75% of consumers still cite discounts and offers as a reward type they like. Free product, free samples, and free services also remain highly popular. Chance-to-win rewards, where consumers can win larger prizes, are increasing in popularity.

2. Reward utility is critical:

Consumer complaints center around how long it takes to earn a reward, how difficult it is to get a reward, and how quickly rewards or points expire. When a consumer’s hard-earned rewards expire before they can figure out how to use them, for example, it can damage the relationship you were trying to reward in the first place.

3. Surprises drive emotional connections:

When asked what the most important way a brand can interact with them, consumers most commonly said ‘surprising them with offers just for being a customer.’ This wasn’t, however, one of the top ways consumers said they like to be rewarded, so it’s important to consider how surprises are positioned — both within and outside of formalized loyalty programs. Test and learn to understand when these tactics have the most impact.

4. The loyalty experience is the brand experience:

As you plan your overarching brand communication channels, make sure to include loyalty. Consumers expect to interact with a loyalty program in the same way that they interact with a brand. That includes via new or existing technologies.

What Consumers Expect

Discounts and offers are table stakes in loyalty programs, and discounts, offers, and free products are the top reasons consumers participate in loyalty programs. Surprises and chances to win prizes as rewards, however, are the differentiators.

Incorporating surprise rewards and chances to win via promotional overlays will help differentiate your loyalty program and strengthen emotional connections with your consumers. Promotional overlays are short-term tactics proven to drive key member behaviors like enrollment, purchase, and feature adoption. Integrated into the loyalty platform, overlays go far beyond traditional sweepstakes and leverage established behavioral science theories to increase repeat engagement and lifetime value. Overlays may include sweepstakes, instant win games, digital punch cards, contests, personality tests, polls and surveys, scavenger hunts, trivia, and more.

Preferred Way to Earn and Redeem

People still expect a “do/get” structure, but also want to be rewarded for their loyalty in authentic ways. In addition, coalition programs are continuing to decline in favor of true brand loyalty.

Top 5 Favorite Loyalty Program Structures

Takeaway: While responses still indicate an appreciation for simplicity and tradition, we observed subtle differences in program structure preferences: consumers are looking for new ways for brands to reward their loyalty. Consumers’ tastes are shifting away from an aggregate approach to loyalty as they desire personal and emotional touches from individual brands.

Consumers also have a desire to drive their own rewards experience.

Top 5 benefits loyalty programs should offer

Takeaway: Consumer expectations trend similarly across different verticals. Despite ranking “personalized rewards” low, consumers love the idea of being able to choose their own rewards, indicating their desire to drive their own experience. Consider this when positioning program benefits.

Want to learn more? Download the full report now.