Consumers and rewards programmes – it’s complicated
New research by customer analysis and data marketing specialist GI Insight shows that cost savings trump convenience and special extras when it comes to driving membership and continued participation in UK loyalty schemes.
But the research also shows that many consumers are not simply drawn to loyalty programmes by reward points but a range of factors attract them to join and remain active in schemes.
The survey of more than 1,000 UK consumers reveals that, while consumers are most excited about earning redeemable points when it comes to loyalty programmes – with 74% saying this is what attracts them – 60% point to vouchers or coupons providing a percentage or cash value discount as a primary driver for joining and staying active in schemes and 54% cite access to special offers.
In the report, The Lure of Loyalty, a significant proportion of consumers also indicate that convenience is an important motivating factor, with 24% pointing to a simple sign-up process as an inducement, 21% noting the appeal of an easy-to-get-to location, and 19% citing the fact they buy from a brand frequently as a draw.
The findings demonstrate that few consumers, however, view accessibility to a loyalty scheme via a mobile app as real driver for enrolling and remaining active in a scheme, as just 6% list this as an element that excites them.
Additional loyalty scheme benefits such as free drinks and snacks, special deals linked to personal events and exclusive access to new products and select offers have less impact than cost savings but a noteworthy minority see these as compelling features of a scheme, with 17% seeing the freebie treats as a real plus while 12% list the other perks as an enticement.
When comparing women and men, the research reveals just a few notable differences: female respondents are more drawn than male consumers by redeemable loyalty points (78% versus 70%) and by the offer of free treats such as coffee or cake (19% versus 15%), while men are more enthused by the availability of a mobile app (8% versus 4%).
Older consumers place a greater emphasis on convenience than their younger counterparts, with more respondents in the higher age groups seeing store or business location and existing customer relationship as influential factors:
· 34% of over-65s and 23% of 55-64-year-olds say they gravitate toward the loyalty schemes of stores and businesses that are easy to get to, while only 14% of 24-34-year-olds and 15% of 35-44s say this is a deciding factor;
· 29% of the over-65s and 21% of the 55-64s say shopping regularly with a brand is good reason to join a scheme, versus 12% of 25-34-year-olds and 15% of 18-24s.
On the other hand, the research shows younger consumers are noticeably more excited by mobile app access to a scheme, as 10% of 18-24-year-olds and 14% of 25-34-year-olds list this as compelling reason to participate in a loyalty programme, compared to just 1% of over-65s and 2% of 55-64-year-olds.
Andy Wood, GI Insights Managing Director, comments: “With consumers becoming more demanding about what they expect from the companies they deal with, the opportunity for organisations that run loyalty programmes to increase both membership volumes and participation are there. This can only be achieved, however, by understanding the key motivators for loyalty scheme participation and using the customer data captured to ensure that these elements are managed and executed in a way that suits the customer base. With all the right elements of a loyalty scheme in place, a business as the perfect platform for encouraging customers to remain loyal, spend more, buy frequently and generally expand their relationship with the business – which in turn will drive greater profitability.”