Personalization is very important when it comes to a successful loyalty program, but according to the sixth annual Bond Loyalty Report, there is a gap between member expectations and member experience.
This was one of the main themes of Tuesday’s Loyalty360 webinar titled, “Leaving Loyalty on the Table: Key Opportunities from the 2016 Bond Loyalty Report,” which was presented by Bond Brand Loyalty.
Sean Claessen, EVP, Strategy, Bond Brand Loyalty, told attendees that the following statistic from the report is “an alarming call to action.”
“One in two members agrees personalization is important, yet only 22% are very satisfied with the level of personalization they are experiencing,” the report noted.
Scott Robinson, VP, Loyalty Design & Strategy, Bond Brand Loyalty believes that this statistic suggests that brands must focus on delivering a level of personalization that better mends this gap.
“We sought to understand what personalization means to members and were surprised by some of the results,” Robinson said. “In particular, that the things members deem most personalized are familiar and not so complicated, dispelling a myth that personalization needs to be complicated to be effective. With that said, and perhaps also surprisingly, the approaches to personalization that yield for brands the most positive impact on member satisfaction are the things with which members are the least comfortable, which indicates that permission is the gateway to personalization done well.”
According to the report, personalization means:
| Special birthday offers |
| Use your name |
| Show your points balance online / in emails |
| Remember your "usual" purchase |
| Show purchasing history online / in emails |
| Offers based on purchasing history |
| Recommendations based on purchasing history |
| Order ahead for prompt pick-up on arrival |
| Offers based on inferred preferences |
| Use your smartphone location and offer nearby deals |
During the webinar, a poll question asked how important is personalizaton among your 2016-2017 priorities? The response from attendees revealed a combined 79% deemed personalization as either very important or a top priority.
The report, conducted in collaboration with Visa, is the largest study of its kind. The report captured responses from roughly 12,000 U.S. and 7,000 Canadian consumers. It covers 58 dimensions of loyalty program performance including program mechanics, communications, rewards, needs fulfillment, loyalty emotional and behavioral outcomes, and brand alignment.
Robinson and Claessen noted the following themes to remember for a
successful loyalty program:
Positive emotions drive brand loyalty
People-to-people interactions trigger positive emotions
Ensure your program experience is consistent across all touch points
Enable, empower, and engage your representatives to delight your Members
Brand Alignment, Meeting Needs, and Program Enjoyment are top drivers
of overall program satisfaction
The redemption experience is more important than the reward itself. “Consumers are telling us the journey is more important than the destination,” Claessen said.
Members are less comfortable with the personalization elements that drive higher satisfaction, therefore getting permission is one gateway to personalization done well
Loyalty + Customer Experience = Brand Loyalty
Here are some key drivers of loyalty program member satisfaction:
-Loyalty program fit with brand/company expectations
-Program meets needs
-Enjoy participating in program
-Level of effort needed to earn a redemption
-Ease of redemption
-Program makes brand experience better
-Amount accumulated per $1 spent
-Program trustworthy
-Time to receive redeemed rewards/benefits
-Program easy to participate in Program/brand reps make me feel special/recognized
Here are some other snapshot takeaways from the comprehensive report:
According to the report, nearly 70% of consumers modify brands they engage with to earn points, but most loyalty programs fall short when it comes to personalization and customer experience
81% of consumers are more likely to continue doing business with brands that offer loyalty program
Only 22% of respondents are very satisfied with the level of personalization they’re getting from brands, yet, satisfaction is eight times higher when programs are highly personalized
When it comes to customer experience, only 20% strongly agree that a brand or program representative makes them feel special and only a quarter of respondents feel that the program experience is consistent across varied touch points (such as online, by email, by phone and in person)
Year-over-year program satisfaction is steady at 44% even as loyalty solutions continue to innovate, indicating that member expectations are increasing just as quickly as programs are evolving
Developing meaningful loyalty programs that meet customers’ needs while deepening their relationship with brands is a difficult challenge, but when designed and operated effectively, can reduce program costs and strongly influence consumer behavior.
Loyalty impact
Consumers belong to an average of 13.4 loyalty programs, but are active in only 6.7 programs
73% of members are more likely to recommend brands with good loyalty programs, which equates to a boost in member acquisition and reduced marketing spend. Top programs that members are very likely to recommend include
Sally Beauty Club, My Sheetz, Amazon Prime, and Giant Eagle fuelperks!
66% of consumers modify amounts spent to maximize points
Demographic differences
68% of female vs. 60% of male members are interested in earning rewards for non-purchase activities (updates to profile, refer-a-friend, social activity, etc.)
Millennials have unique and increasing demands and require further program differentiation
Millennials are 2.2 times more willing than boomers to pay a premium for products and services if they can also earn loyalty and reward points.
Six out of 10 millennials are comfortable receiving product recommendations based on their purchase history, compared to only 4 out of 10 boomers.
Substantially more millennials value programs that offer special services like concierge (59% of millennials vs. 38% of boomers).
Mobile is a strategic advantage (but missed opportunity)
Demand increases to 57% of members who want to engage with programs on a mobile device.
62% of women vs. 52% of men would like to engage with programs on a mobile device
Nearly 50% of program members don’t know if there is a mobile app to complement their loyalty
Outside of a program app, consumers are most interested in using their mobile device to check their points balances (57%), redeem reward points (55%), find a location/store (54%), and browse reward options (54%)