Fair weather friends? Consumers tie loyalty programs to getting discounts and freebies.

September 26, 2020September 28, 2020 Phillip Nones Advertising, Branding, Business, Marketing, Marketing Communications, Marketing Research Advertising, brand loyalty, Branding, HelloWorld, Loyalty Barometer Report, Loyalty Programs, marketing, Merkle

As more consumers than ever before have gravitated online to do their shopping, loyalty programs continue to grow in importance.

But what do consumers really want out of these loyalty programs?

The short answer to that question is “freebies and discounts,” the Loyalty Barometer Report from HelloWorld, an arm of Merkle, makes clear.

Of the ~1,500 U.S. consumers polled, ~77% of the respondents said they expected benefits for their loyalty to be in the way of free products, and an almost-equal percentage (~75%) expect to be offered special offers or discounts.

As for the most important reasons people participate in loyalty programs, the Merkle survey reveals that most people take a purely “transactional” approach to them. Discounts and free products far outweigh other considerations:

Participation to receive discounts or offers: ~43% of respondents cited as the most important reason
To earn free products: ~27%
To gain access to exclusive rewards: ~10%
To receive members-only benefits: ~9%
To stay connected to a “brand I love”: ~6%
Other factors: ~5%

Notice how far down the list “brand love” falls.

As for negative aspects of reward programs, it turns out that there are a number of those. The following five factors were cited most often by the survey respondents:

It takes too long to earn a reward: ~54% cited
It’s too difficult to earn a reward: ~39%
Receiving too many communications: ~36%
The rewards aren’t very valuable: ~32%
Worries about personal information security: ~29%

[For more details from the Merkle report, you can access a summary of findings here.]

The results of the Merkle survey suggest that rewards programs may be more “transactional” in nature than many brand managers would like them to be. But perhaps that’s happened because of the very way the loyalty programs have been structured. When loyalty marketing is focused on discounts, it’s likely to drive transactions without necessarily engendering much if any actual customer loyalty.

On the other hand, if we define customer loyalty as when people are willing to pay a premium, or go out of their way to purchase a particular brand’s product or service, that represents a significantly smaller group companies than the plethora of companies offering loyalty programs to their customers.

Which brands do you consider to be true loyalty leaders? A few that come to my mind are Amazon, American Express and Nike — but what others might you posit? Please share your thoughts with other readers here.

For brand loyalty … follow the money.

July 25, 2018 Phillip Nones Branding, Business, Marketing Research brand loyalty, Branding, Loyalty Marketing, Maritz, marketing, Wise Marketer Group

When it comes to brand loyalty, are we mercenaries? Loyalists? Cultists?

Or maybe we’re just lazy?

With major brands spending billions of dollars each year using various strategies to build and keep brand loyalty, these questions are important.

Recently-published consumer research by Maritz Motivation Solutions and Wise Marketer Group seeks to get to the nub of the issue.

Maritz/Wise surveyed nearly 2,100 American adults age 18 and over via online questionnaires and consumer research panels. The respondents were filtered to include purchase decision-makers or key influencers within one or more of six major consumer categories:

Airline travel
Banking services
Credit card services
Hotels/lodging
Restaurants
Specialty retails

The results of the research reveal that brand loyalty isn’t one monolithic mindset, but consumers tend to fall into one of four categories, as follows:

“Mercenaries” – Loyal to brands that pay them to be loyal: ~55% of respondents
“True loyalists” – Stay true to a brand because people connect with it above and beyond any explicit incentives to do so: ~30%
“Sloths” – Can’t be bothered to switch brands due to inertia: ~8%
“Cultists” – The brand represents their personal identity: ~7%

What the Maritz/Wise research also tells us is where people come down on brand loyalty attributes is based more on attitudinal characteristics than something that can be segmented easily based on conventional demographics.

In other words, brand loyalty characteristics aren’t driven by age, gender or income level; mercenaries and cultists are found in their expected proportions across the spectrum of loyalty.

In another finding, when it comes to the “transactional” nature of brand loyalty, the research discovered that the “art of the deal” is based on money.

Gift cards, cash-back and credits are overwhelmingly preferred forms of reward for brand loyalty – and these apply to everyone no matter where they may land on the brand loyalty spectrum.

So, the next time we hear the old saw that “money can’t buy love” … we all know that the truth is a bit more nuanced.

“Surprise & Delight” vs. “Tried & True” Branding

August 13, 2014August 13, 2014 Phillip Nones Advertising, Branding, Business, Content Creation and Content Management, Creative and Production, Marketing Communications American Consumers, brand loyalty, Branding, Brands, Business, Consumer Advertising, Consumer Branding, Consumer Marketing, IntelliResponse

All the emphasis on having consumer-facing brands “surprise and delight” their customers isn’t what many people are looking for at all.

In the interactive age, what we hear often is that companies and brands need to go beyond simply offering a high-quality product.

Many companies and brands have the notion that they should strive to engender a kind of “personal” relationship with customers – so that consumers will develop the same kinds of feelings for brands as they have with their close friends.

How true is this?

One marketing company decided to find out. Toronto-based virtual agent technology firm IntelliResponse surveyed ~1,000 online consumers in the United States earlier this year.

When asked what sort of relationship they would prefer to have with the companies whose products and services they purchase, here’s how the percentages broke for these respondents:

Prefer a “friendship” where they get personalized service: ~24%
Prefer a “transactional” relationship where they receive efficient service and that’s all: ~59%
Prefer both equally: ~17%

Evidently, “boringly consistently good” beats “surprisingly delightful” far more often – assuming the company is minding its Ps and Qs when it comes to product quality.

Here’s what else consumers are seeking: They want to be able to get the same information and answers from a company’s desktop or mobile website … online portal … or social media sites as they do from speaking with company representatives over the phone.

The IntelliResponse survey found that two-thirds of the respondents will go to a company’s website first when seeking out information regarding a product or service – so the answers better be there or the brand risks consumer disappointment.

The takeaway is this: No matter how much breathless reporting there is about this “surprising” social media campaign or that “delightful” interactive contest … the majority of consumers continue to view companies and brands the way they have for 100 years: Companies are merely the vehicle by which they can acquire the goods they need.

Rather than spending undue energy trying to make the interactive world “fun” or “sticky” for customers, companies should focus on the basic work of delivering products, information and answers that are easy to find, easy to understand, and easy to act on.

And related to that — make sure support systems (and support people) are in place so that customers can get any problems or issues solved with a minimum of time or hassle.

Do those things well, and companies will naturally please the vast majority of their current and future customers.

Everything else is just window-dressing.

Less is less? What’s happening with customer loyalty programs.

April 27, 2014April 28, 2014 Phillip Nones Advertising, Branding, Business, Marketing Communications, Uncategorized brand loyalty, Business, Customer Loyalty, customer loyalty programs, Forrester Research, Loyalty Marketing, Loyalty Memberships, Loyalty Programs, marketing

When it comes to customer loyalty programs, here’s a sobering statistic: Only about 15% of consumers redeem loyalty rewards.

This finding comes from a report by Forrester Research, based on results from an in-depth survey it conducted last fall of 50 member companies of Loyalty360, a major loyalty marketing association.

What Forrester found is that fewer than half of the surveyed companies’ customers are enrolled in their loyalty programs. And of those customers, only about 35% of them are actually redeeming their loyalty awards.

Hence the 15% “effective” participation rate.

At first blush, the paltry participation makes one wonder what all the fuss is about when it comes to loyalty marketing. But more than half of the companies surveyed by Forrester reported that they view their loyalty program as a strategic priority, not merely a marketing afterthought..

Clearly, there seems to be a bit of a “disconnect” between those lofty aims and the not-so-airborne reality. The question is how companies can encourage greater participation in their loyalty programs, thereby using them to improve consumer brand loyalty in addition to retaining customers over time.

Forrester offered several recommendations in its report:

1. Use advances in analytics to act on customer insights, rather than just relying on the purchase transactional history of loyalty program members.

2. Balance the “reward mix” with personalized offers that present rewards program customers with unique experiences that are different from simply offering “more of the same.” (In many cases, offering discounts on more of the same merchandise a customer has already purchased won’t qualify as anything particularly special.)

3. Break out from the traditional e-mail/web portal/call center communication vehicles to embrace more social media channels featuring two-way interaction. (Surprisingly, only about half of Forrester’s survey respondents reported that social media is an important part of their loyalty programs’ methods of communication.)

Speaking personally, I’m not particularly surprised at the relatively low engagement levels reported in this study. Many companies and brands have reached out to me over the years with offers to join loyalty programs, using various incentives – often purchase discounts or sign-on points as an incentive for joining.

For me, it’s a matter of “time” and “mindshare” as to which of these programs qualify for my participation. If a brand isn’t that important to me in terms of how I live my daily life, it – and its loyalty program – isn’t ever going to be big on my radar screen.

I suspect there are quite a few other consumers like me. But if you have different take, leave a comment and share your perspective with other readers.