Loyalty programs becoming increasingly crucial to shoppers

By Chris Gelbach

Loyalty programs are becoming increasingly important as the membership ranks grow.

Consumers who are members of loyalty programs are enrolling in more of them, according to a new report by Bond Brand Loyalty, a provider of loyalty program services.

Based on a survey of more than 10,000 consumers, the report found that loyalty programs are becoming increasingly important to shoppers. The average shopper is currently a member of 13.3 programs, up from 10.9 programs in 2014.

But while shoppers are joining at a faster clip, the number of programs in which they actively make purchases has decreased from 7.8 to 6.7.

According to the report's executive summary, it is more important now than ever for brands to identify "how their programs can differentiate and win" as loyalty becomes more crowded.

The study also indicates that loyalty programs work: 34 percent of consumers say they would not be loyal to a brand if it weren't for its loyalty program, and 86 percent of consumers agree that the programs are worth the effort, up from 80 percent in 2014.

Only 12 percent of shoppers have downloaded a mobile app for a loyalty program, but those who have are more satisfied than other loyalty members. Sixty-two percent using a program's mobile app are satisfied with the same loyalty program, versus 45 percent of loyalty members who haven't downloaded a mobile app.

Only 10 percent of members follow a loyalty program on social media, up from 9 percent in 2014. And use of loyalty websites continues to decline, down to 33 percent in 2015 from 37 percent in 2014.

The loyalty programs ranked best for overall program satisfaction in different categories include Amazon Prime in mid-frequency retail, Kroger Fuel in high-frequency retail, Regal Cinemas' Regal Crown Club in entertainment, Subway's Subway Rewards in QSR dining, and TGI Fridays' Give Me More Stripes in casual dining.

Elements contributing to higher program satisfaction include basics such as appealing rewards, ease of reward redemption, amount accumulated per $1 spent, ability to reach rewards quickly, and the number of ways rewards can be earned.

For more:
-See this 2015 Loyalty Report executive summary

Related stories:
Increased spending on loyalty programs not increasing engagement
Macy's, Rite Aid partner for customer loyalty program
Customers torn between personalization and location information
55% of millennials expect more from customer service
Increased spending on loyalty programs not increasing engagement

Suggested Articles

Costco changes up its menu items, and Alibaba and Guess partner for a physical store.

Janey Whiteside, Walmart's new chief customer officer, is well acquainted with the importance of customer service in modern retail.

Whole Foods will offer deals on Amazon's Prime Day, and tariffs against China are causing pricing hikes.