Do rewards and loyalty programs still matter? More than ever.

by | Apr 21, 2020 | Marketing, Public Relations

With all the hoopla about social media and Gen Z, what’s happening to consumer benefits like rewards or loyalty programs? Are they still popular, or even wanted? Are they necessary?

That’s what data analytics and technology marketing company Merkle wanted to know when it surveyed more than 1,500 consumers late last year

The findings

What Merkle discovered is that not only do loyalty programs abound everywhere, but more importantly, it’s justone piece of a bigger puzzle. To be successful, any loyalty or rewards program must be integrated with other consumer points of contact that not only convince them to buy, but also instill trust and future business.

The recipe

To foster customer loyalty, Merkle identified four key areas of focus. They were reward utility, engagement, personalization, and acknowledgment combined with surprise. Here’s a deeper look at each.

Reward utility

What Merkle found is that the number one cause of customer dissatisfaction with rewards is the time required to earn something. Customers said it was either too hard or took too long. The firm also learned that in some cases, such delays had a negative effect. Companies that can find an equitable balance in the time it requires for consumers to earn rewards that appeal and also make it easy to redeem will see greater results.

Engagement

It was no surprise that customers told Merkle that they wished to be recognized but they also expressed an interest in a deeper connection with the brand. Of those polled, 35 percent told surveyors that they wished they could also discover and open up new doorways to additional features or access tools to find products. Consumer surveys, polls, and online reviews to keep consumers engaged between their purchases may be helpful in fulfilling those wishes.

Personalization

Other articles have discussed the importance of personalizing communications with consumers. Even with a loyalty or rewards program, personalization is equally important. Merkle pointed out, however, that brands should strike a balance in its usage because too much personalization too often could actually turn off some customers concerned about privacy and data sharing. A big revelation from the survey is that 85 percent of consumers said they wanted to be the ones to select the rewards they receive.

Acknowledgment

All marketers know that demonstrating appreciation to consumers is important. But what Merkle added to the equation is that 58 percent of the people they surveyed also cited surprise offers and gifts as the most important way a brand could relate to them. Of course, those surveyed also said they expect to be thanked and felt that the surprises would not only keep them engaged but instill a sense of loyalty.

The top three rewards or benefits cited by respondents were free products, discounts, and free samples. Free services, a chance to win something, and surprises from the brand made up the bottom three.

Considerations

When this annual survey was launched in 2018, earning points for rewards was the reward of choice. Although the latest survey confirmed that it remains number one, another entry has begun to gain in popularity. That is the option to earn points for the same program from more than one brand or merchant.

Brands interested in gathering more data on customers and receiving feedback would be interested in the other finding. When asked what they would do to earn points quicker, 71% of respondents identified the top response as participating in a survey.  Answering poll questions, writing online reviews, downloading an app, and viewing articles or video about the brand were next.

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Ronn Torossian
Ronn Torossian is the Founder and CEO of 5W Public Relations: 5WPR is one of the 20 largest PR Firms in the United States.

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