These 10 Factors Drive Loyalty Program Satisfaction

NEW YORK — Enrollment in loyalty programs is growing; however, retailers are still missing opportunities to drive their business.

According to Bond Brand Loyalty's The Loyalty Report 2017, enrollment has grown 31 percent over the past four years as brands continue to invest in their loyalty programs. But things appear to be stagnant on the engagement front.

"Consumers love loyalty programs and continue to join more every year, but active engagement rates have remained flat in the past four years, indicating that there's a tremendous opportunity to evolve 'same-old' programs to ensure members expectations and needs are being met," said Bob Macdonald, president and CEO of Bond Brand Loyalty. 

As Macdonald explained, consumers expect personalized and shared interactions through a combination of human and digital experiences. 

"By engineering the program with every asset of a brand's loyalty ecosystem and making adjustments to differentiate the member experience, brands can improve engagement and substantially increase program performance for gains in lift, retention and lowered marketing costs," he said.

According to the report:

  • The average number of programs a consumer belongs to has increased to more than 14 from 10.9 memberships from just three years ago, yet members actively engage with only half of those memberships. 
  • Member satisfaction remains steady year over year at about 46 percent despite increase investments. Program satisfaction is highest in payment cards and retail such as gas/convenience, grocery and warehouse. It is lowest in telco services, apparel, automotive OEM and services and consumer packaged goods.
  • Marketers are spending more to maintain program member satisfaction, and programs are highly effective with 81 percent of consumers agreeing that loyalty programs make them more likely to continue doing business with a brand.
  • Seventy-six percent of loyalty members say that programs are part of their relationship with brands, and 67 percent of consumers modify the brands they purchase to maximize the benefits they earn.
  • Seventy-three percent of members are more likely to recommend and say good things about brands with good loyalty programs, while 66 percent report modifying spending to maximize point accumulation.

Some of the top loyalty programs based on overall member satisfaction include: Amazon Prime, Kroger Fuel Rewards, Walgreens Balance Rewards and Sheetz Inc.'s My Sheetz Card.

But what drives loyalty program satisfaction? 

According to the report there are several key elements: the program meets consumer needs; consumers enjoy participating in the program; the program makes the brand experience better; ease of redemption; and the program is consistent with brand expectations.

Additional elements include the program rewards/benefits are appealing; the level of effort needed to earn redemption; the time to earn desired rewards/benefits; the amount accumulated per $1 spent; and the ways rewards/benefits can be earned.

Bond Brand Loyalty also pointed out that creating an enjoyable customer experience is critical to a program success. However, the report found that only 22 percent of loyalty program members say they are treated better than customers not enrolled in the program.

Of that 22 percent, overall program satisfaction is more than three times higher than those who do not sense that they are treated better as a program member.

In addition, loyalty members who agree that a program is enjoyable are 10 times more likely to be satisfied. But there's lots of room to do better — only 29 percent of members agree that the program improves their experience with the brand.

The Loyalty Report 2017 was conducted in collaboration with Visa Inc. The report captures responses from more than 28,000 consumers in the United States and Canada, collecting feedback on more than 400 programs on 50-plus attributes of loyalty programs, including rewards and redemptions, program and earn mechanics, brand alignment and emotional and behavioral loyalty outcomes, as well as human-to-human and digital experiences.

The report also found that when it comes to the payoff of a loyalty program, the redemption experience is as important as the reward itself.

Notably, redeemers are twice as satisfied with loyalty programs as non-redeemers; yet more than one-fifth of program members have never redeemed. Results show that the redemption experience — the anticipation of reward, as well as ease of redemption — is more important than the actual reward.

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