Bond Brand Loyalty (formerly Maritz Loyalty Marketing) released its comprehensive 2014 Loyalty Report, which includes five significant takeaways for loyalty marketers.
Here are the five key takeaways from the report:
· Loyalty programs are an extension of the brand experience–brand alignment is a design imperative. Brand alignment is a core loyalty design principle that refers to the precise relation of the program’s components with the attributes and personality embodied by the brand. Marketers should be concerned with the extent to which the attributes of their loyalty programs support and align with their brands’ attributes and positioning. Doing so can deliver nearly three times higher Member satisfaction compared to programs that fail to achieve strong brand alignment.
· ‘4-Drive’ Engagement is key to sustaining customer engagement: Understanding human motivation is the key to loyalty program design. Bond Brand Loyalty aligned a portion of the study with a motivation framework called the 4-Drive model, to understand how traditional loyalty programs make use of tactical monetary features such as discounts, cashback, and rebates–and why non-monetary benefits rate higher among Members we surveyed.
· Personally Relevant Communications and Recognition are core elements of a successful loyalty program: Bond Brand Loyalty’s 2013 study revealed a tight link between customer satisfaction and the extent to which customers deem loyalty program communications as personally relevant. It seemed the higher the relevance, the higher the satisfaction with the program. This has been confirmed again this year−56% of customers want to receive communications from the programs in which they are enrolled, yet only 46% consider those communications to be relevant. Given the investment most programs make in communications, Bond Brand Loyalty wants to understand how to optimize this investment.
Bond Brand Loyalty explored this divide in depth to find out what makes Member satisfaction soar to 93%, and what marketers can do to ensure their Members feel valued and important.
· Trust must be established before consumers will consider sharing personal information: As marketers, we stand at an interesting crossroads: Customers expect increased customization and personally relevant content from brands, yet are reluctant to share the personal information that enables such personalization. Recent high-profile data breaches (e.g., Target, Evernote, Snapchat, Neiman Marcus) have made consumers even more aware of privacy and security concerns. Willingness to share personal information is strongly correlated with trust; 49% of Members who strongly believe a program is trustworthy are willing to share information–more than three times the average respondent.
· Millennials are very loyal to their peers: Millennials (aged 20-34) now outnumber Boomers (45+) and are entering the high-purchase life stage, so it’s no wonder marketers are increasingly focused on this segment. A question many marketers are grappling with is: “Are Millennials loyal to brands?” Evidence from this study suggests Millennials are very loyal to their peers, and to the programs with which they associate a fair value exchange.
Loyalty programs are more important for driving loyal behaviors among Millennials than among any other group, especially for brands in CPG, telecommunications, entertainment, and retail industries. Millennials are very aware of value propositions and commerce trade-offs; 68% say they wouldn’t be loyal to a brand that doesn’t have a strong loyalty program, which is considerably higher than their boomer parents.
For Millennials, being recognized by their peers and social groups positively impacts how satisfied they are with brands. Suggesting the Drives to Bond and to Create are key areas for marketers to consider. Programs that create meaningful and inventive ways for Millennials to be recognized by peers and social groups can achieve higher engagement. Millennials claim they are willing to modify how hey shop in order to maximize benefits: 68% of Millennials will change when and where they shop in order to receive program benefits. A third confess to buying something they do not really want to earn points or maintain benefits, and more than half of Millennials (60%) are willing to switch brands, if it means receiving more benefits.
“For customers who deem the loyalty program is part of their relationship with the brand, non-monetary benefits become almost twice as important to them the longer they’re with the program,” Scott Robinson, Senior Director, Loyalty Design and Solutions, Bond Brand Loyalty, said. “With less dependency on monetary means of reward, it becomes even less expensive to hold on to a customer—and can be done in a differentiated way that's harder for competitors to mimic.”
Want to learn more about Bond Brand Loyalty and their extensive loyalty marketing research? Register to attend their upcoming free webinar here