Study: Brand loyalty programs fastest route to a millennial's heart
Loyalty programs are proving valuable with consumers and are paying off in more ways than one.
That's the feedback from Bond Brand Loyalty and its sixth annual loyalty report. The report was conducted in collaboration with Visa and is the largest of its kind, according to a news release.
The report obtained responses from roughly 12,000 U.S. and 7,000 Canadian consumers on 58 different loyalty program dimensions including actual behavior changes as the result of such programs.
Major findings reveal consumer satisfaction with such programs remains steady — at the same 32 percent rate as last year — despite significant innovations. The study also found that although such programs are challenging to pull off, those who do it well not only cut operational costs, but also have substantial positive effects on customer behavior.
Other key findings include:
- Re: Loyalty impact
- Consumers belong to an average of 11.3 loyalty programs, but are active in only 7.3 programs
- An increasing number of consumers modify brands they patronize to maximize points
- 66 percent of members are more likely to recommend brands with good loyalty programs
- 63 percent of consumers modify brand spending to maximize points
- Re: Program satisfaction, brand alignment and rewards redemption
- Program satisfaction is steady from last year
- 23 percent said their program fits very well with their brand expectations
- Re: Rewards and redemption
- They are key to satisfaction, yet more than a quarter of members have never redeemed anything
- Rewards are important to retention, with non-redeemers twice as likely to defect
- Credit card loyalty programs can benefit from instant retail and online points redemption
- Re: Demographic differences
- Millennials are 1.5 times more willing than boomers to pay a premium if they also earn loyalty points
- 44 percent of millennials don't mind product recommendations based on purchase history, while only 30 percent of boomers do
- Substantially more millennials value programs with special services compared with boomers
- Re: Mobile is a largely missed strategic advantage
- 44 percent want to engage via mobile device
- More than half don't know if a mobile app exists to complement their loyalty program
- Consumers are most interested in mobile to check points balances, read emails, find a store and redeem rewards