More than 6 in 10 consumers modify their spending in order to maximize loyalty program points, according to figures in Bond’s latest annual Loyalty Report [download page] for 2020. The report takes a look at how brands can best encourage loyalty from members, as well as the benefits they are likely to see with membership programs in place.
Based on a sample of 17,000 US consumers, the study posits a member engagement score based on satisfaction, advocacy, emotional connections and spend. When ranking sectors based on this score, it was Entertainment that came out at #1, followed by Gas at #2, Hotel at #3 and Dining at #4. Sectors rounding out this list included Apparel Retail, Airline and Drug Stores.
It’s clear that engaging members with loyalty programs is benefiting brands, particularly when looking at the outcome framework of “say, stay, spend” (advocacy, retention and spend). Some 7 in 10 (72%) consumers said they were more likely to recommend brands with good loyalty programs, with an even greater percentage (78%) claiming that such programs make them more likely to continue doing business with brands. And, nearly two-thirds (64%) said that they modify the amount they spend to maximize points associated with loyalty programs.
The study also found that the trend for inactive memberships remains: though new memberships are steady, not all of them are “active.” In fact, for every 14 memberships just half (7) of them are considered active. This is on par with last year’s figure. Sector by sector, Payment memberships are the most prominent in consumers’ wallets, accounting for 1.9 memberships on average after an 18% increase since 2019. Speciality Retail is next with 1.3, after a 20% decrease since last year, followed by High-Frequency Retail (0.9, down 14%), Travel (0.8, up 11%) and Dining (0.8, up 6%).
Experience is Key
Experience factors were shown to account for around three-quarters (76%) of what driver loyalty program engagement. These factors included recognition and support (12% share), personal relevance (12%), ease and enjoyment (12%) and brand alignment (10%) among others. Not only that, but programs offering personalized experiences were shown to be experiencing 47% higher engagement, despite only 1 in 4 members strongly agreeing that they are currently made to feel special and recognized by program representatives.
And, returning to the “say, stay, spend” framework, the personal quality of digital experiences is shown in the study to have a notable impact on loyalty outcomes, provoking a 7.5x lift in “say”, a 5.4x lift in “stay” and a 6.4x list in “spend”. In particular, credit card programs achieving personalization experience a lift in spend on the card of some $196 per member, per month.
Top Loyalty Programs
Here are some of the loyalty programs identified as leaders in their field:
- Airlines: JetBlue True Blue
- Hotel: Hilton Honors
- Grocery: Food Lion MVP Program
- Drug Store: Rite Aid Wellness+
- Health & Beauty: My Bath & Body Works Rewards
- Apparel: Nike+
- Speciality: Amazon Prime
Interested in learning how to optimize your customer experiences and customer loyalty?
Download V12’s Customer Experience Success Kit for access to some of our most informative resources on customer experience marketing trends, strategies and tactics. The most convenient way to research, this success kit contains topic focused blogs, webinars, white papers, case studies and more – all with one download.