Which loyalty programs work, which don’t, which ones pay and you don’t?

June 19, 2018 9:26 am


Rising cost of living and growing expenditures have driven consumers to spend smartly.

With frugal living now becoming a trend, more and more consumers are looking for gaining a ‘return’ on their purchases, and are also shifting their loyalties based on what they perceive is a more ‘economical’ brand.

Brands across the world are making use of loyalty programs, now more than ever. Sales, discounts, and reduced-price offers are now more frequent. Premium brands too have their own loyalty programs or are a partner in a larger loyalty scheme to create an ‘experience’.

Loyalty programs offer a chance for retailers to customize their offerings and reach out to customers at a personal level.

Developing meaningful loyalty programs that meet customers’ needs while deepening their relationship with brands has proven they can to influence consumer behavior. Evidently, more and more consumers feel that loyalty points determine their purchases and that they are more connected to brands that have personalized loyalty programs.

Read: 30% increase in consumer complaints during Q1 2018

Loyalty defined

But what drives loyalty? According to a research, fun is an important loyalty driver for 60% of millennials. Value for money on their purchases is valued somewhat more greatly by Baby Boomers (70%) and Gen X (70%) than by Millennials (65%).

80% of Millennials find points or rewards for purchases made in-store, on a website or mobile device appealing, as well as the ability to choose among several types of rewards (81%), and opportunities to earn bonuses by doing some specified activity (81%).

Among Millennials in particular – which has been a challenging audience for many to connect with – recent studies show that millennials are 2.2 times more willing than ‘baby-boomers’ to pay a premium for products and services if they can also earn loyalty and reward points.

Almost 68% of female members vs. 60% of male members are interested in earning rewards for non-purchase activities (updates to profile, refer-a-friend, and social activities).

Arund 6 out of 10 millennials are comfortable receiving product recommendations based on their purchase history, compared to only 4 out of 10 baby-boomers. Substantially, more millennials value programs that offer special services like concierge (59% of millennials vs. 38% of baby-boomers).

Read: Who won the Ramadan UAE advertising race for consumers’ hearts?

Out with the old, in with the new digital

And how do brands make loyalty programs more relevant? By structuring a comprehensive program that can be adopted digitally.

Nearly 40% of “digital native” Millennials rely on mobile apps to track and redeem their rewards, while across all age groups, the use of plastic membership cards dropped by 4% during 2016. Demand has increased among 57% of members who want to engage with programs on a mobile device (62% of women and 52% of men). Accordingly, 33% of Millennials have conveyed their dislike of previous rewards programs because there are too many cards to carry, while 29% rated “too many programs to keep track of” as one of their top three things they dislike about loyalty programs.

Outside of a program app, consumers are most interested in using their mobile device to check their points balances (57%), redeem reward points (55%), find a location or store (54%), and browse reward options (54%).  So, they are maintaining, discovering and spending and taking action through the mobile device that is in their hands every day. This should not be a surprise, that ‘convenience is king’ to increasing frequency and expanded use among consumers.

So, consumers want it convenient, want it all, and want it now.  This does not sound unfamiliar to marketers, but, digital loyalty programs are providing a response that is helping to satisfy those demands.

Read: The top reasons why consumers shop online. Note: It’s not discounts!

By Mujeeb Rahman, Chief Operating Officer, Bebuzzd

Bebuzzd is a one-stop loyalty program that is digital, flexible, industry agnostic and easy to use. It permits businesses to easily build bespoke digital loyalty schemes enabling them to connect and reward their customers in a personal and efficient way. Considering customization is key, the Bebuzzd program has a personalized loyalty system, that creates a reward scheme which seamlessly fits client’s business needs.

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AMEinfo Staff
By AMEinfo Staff
AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.



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