The How, What and Why: Customer Expectations of Loyalty Programmes

Are you giving your customers a loyalty programme they'll use?

In a time when customers are on a constant hunt for both quality and value — loyalty programmes are still very much alive and well. 83% of members agree that programmes make them more likely to continue doing business with companies (Bond). That’s a massive number.

The decision to build a foundation from which loyal customers can thrive is half the battle — but genuine interaction with your audience is, at best, brief and very limited.

You imagine that investing in a loyalty programme is a pretty weighty commitment. And the absolute worst case scenario keeps knocking around in the back of your head.

“What if no-one cares about my programme?”


Peace of mind wouldn’t go amiss.

When seeking to harness loyalty, with any type of programme, understanding customer attitudes towards rewards is essential.

Do you know WHAT kind of rewards your customers want to receive? HOW they want to receive them? Or WHY you need to offer them in the first place?

 

How Customers Want

57% of customers are happy with a loyalty programme when using the accompanying mobile app (Bond). When compared to the considerably lower satisfaction rate of 45%, among members who have not downloaded the mobile loyalty app — we already know that technology plays a huge role in the success a loyalty programme.

But beyond ease of redemption, how else are customers encouraged to engage consistently with a single programme?

With so many formats to choose from, there is bound to be a spectrum of efficacy. Some are certainly more popular than others — but is following trends always a good thing?

As many as 45% of loyalty programmes are following a tier-based method (Cap Gemini).

Customers clearly love a challenge. With the promise of higher value rewards over time, there is clearly an appeal for the tiered approach — one which brands have definitely picked up on.

But don’t forget that loyalty programmes are meant to differentiate your brand. You want an approach that will stand out from the crowd, not align with nearly half of the other programmes out there. Disruption is a key aspect in motivating customer engagement.

Don’t leave yourself languishing in the shadow of other brands.

Communicate Like You Mean It

Quality of communication is another practice you’ll need to refine. It’s crazy how quickly customers can lose interest when they don’t feel valued by the service they’re receiving.

In fact, 49% of millennials stopped using a loyalty programme after receiving irrelevant communications (Colloquy).

Millennials or the ‘connected generation’ will likely make up a large percentage of your programme participants. This is an incredibly influential demographic, so don’t chance it. To prevent almost half of your millennial audience — and 37% of all participants (Colloquy) — dropping off your radar, incorporate a channel of personalised communication/offers.

What Customers Want

Loyalty programme enrolment is on the rise (Selfstartr). The good news is that there is still an undeniable demand for them. The bad news is that competition for loyalty is now fiercer than ever before.

To combat this effectively, one of the biggest and most pressing questions you need to ask yourself is: What types of rewards do my customers actually care about?

Loyalty is cultivated with customer incentives, but the danger lies in offering irrelevant and/or unappealing rewards. Depending on your audience, coming through with a well-rounded answer to this question may be initially very challenging.

No matter! In the long term, a sophisticated loyalty programme can improve your offering in a measured manner. There is a sizeable demand for supermarket and High Street rewards, due to the nature of necessity. But you can also get some great scope in utility, cinema and travel rewards. Making up a third of all reward preferences, all three are desirable and represent a strong avenue of reach.

Rewards Should Be Relevant And Attainable

The top two reasons consumers stop participating in a loyalty programme are:

  1. Did not provide rewards/offers that were of interest
  2. Too hard to earn points for rewards (Colloquy).

Whether you opt for a points programme or not, make rewards realistically attainable and don’t miss a glaring opportunity to market yourself to a larger audience. Turn loyalty into a permanent fixture for your brand, by offering a diverse mixture of rewards.

Give your programme real traction on a deeper level, by providing participants with rewards from multiple brands. This way you’ll engage a sense of freedom and show that you trust them to return to your brand once external incentives have been redeemed.

Why Customers Want

Customers want to feel appreciated by their brand of choice. Emotional connections are attractive prospects, but notoriously hard to come by.

By nailing your programme and giving customers exactly what they’re after, you don’t just reward them — you enhance their entire journey. Safe in the knowledge that they’re earning something more for their money, they will buy into your brand that little bit more at every touch point.

If you don’t offer this experience to them, no doubt someone else will. So you’d better get a move on! Get it right first time round and your customer base will bloom.

5 Key Takeaways

  • Introduce a variety of rewards from multiple industries: Supermarkets and High Street stores dominate demand but travel and cinema remain integral
  • The right loyalty platform isn’t always the most obvious one: If bigger brands or competitors are already offering the same advantages, you’ll likely get lost in the noise. Be different.
  • Personalised communication is a must: Irrelevant offers and generic marketing is disengaging — especially among millennials
  • Make ‘em feel special: Customers don’t just want to save money. They want to feel privileged and appreciated by brands. Loyalty goes deeper than material discounts.
  • Contact Us – there’s absolutely nothing wrong with requesting a trial to see what we can do for you.