Brands employ loyalty programs for a variety of different reasons, but it’s always important when they learn how consumers views these offerings.

HelloWorld recently released a report titled, “2017 Loyalty Barometer Report: What Consumers Think of Loyalty & Reward Programs,” which examines generational consumer sentiments toward loyalty programs, as well as areas where brands can pivot to accommodate consumer preferences.

The report also examines common pain points consumers across generations encounter within loyalty programs, with the greatest frustration being the amount of time it takes to redeem points.

Loyalty360 talked to Michela Baxter, Senior Director of Loyalty at HelloWorld, to learn more about this compelling report.

Based on your report, what do consumers think of loyalty programs?

Baxter: On the whole, our research shows that today’s consumers crave innovative loyalty tactics. While traditional “spend and earn” programs remain effective, an overwhelming 75 percent of consumers want to be rewarded for engagement beyond purchase, such as taking a survey or watching a brand’s video. Non-traditional loyalty programs are steadily resonating with consumers, with shoppers across industries gaining interest in coalition loyalty, gamification, and surprise-and-delight models. As loyalty programs become ubiquitous, the report demonstrates that brands must devise tactics to better connect with consumers and create experiences that directly correspond to their preferences.

What is being done well with loyalty programs and where do the challenges lie?

Baxter: Many brands have leveraged POS technologies that help consumers seamlessly validate their rewards. Consumers want quick and easy interactions, and brands have begun to successfully bridge the technology gap by trading dated, two-step validation processes for modern solutions like entering a code or uploading receipt photos.

However, despite these advancements, there is room for improvement when it comes to efficiency. Our findings confirmed that today’s consumers crave instant gratification, with over half (53 percent) reporting that they are most dissatisfied by rewards that take too long to earn. Brands leveraging POS technologies have the greatest chance at mitigating these frustrations, as they have the ability to offer innovative, streamlined rewards programs. For example, brands that provide consumers with a code upon making a purchase can take this solution to the next level by offering an instant coupon once the code is entered on the brand’s app or website.

What are consumers’ preferred ways to earn in loyalty programs?

Baxter: The most preferred way for consumers to earn rewards is through discounts and offers (82 percent), followed by free products (77 percent) and free services (66 percent). When it comes to the overall program structure, brands must ensure that all rewards, no matter the form, are tailored to consumers’ specific wants and preferences, as 77 percent favor loyalty programs that involve personalized rewards. Additionally, 70 percent of consumers prefer programs that partner with other brands to maximize ways for consumers to earn. Younger generations, in particular, are motivated by gamification strategies, with 40 percent of Millennials approving of loyalty programs that are fun and interactive.

What do consumers like least about loyalty programs?

Baxter: After waiting too long to receive rewards, the next most commonly cited pain point is too many communications. Communications are, of course, a key tactic to drive program engagement. Brands should, however, aim to minimize consumer frustration by ensuring their outreach is highly personalized, as the problem is usually quality, not quantity, of notifications. Other areas of discontent are security concerns for personal information, rewards that are too difficult to earn, and rewards that lack value.

How can brands reward beyond purchases?

Baxter: Consumers across industries−from retail, to credit card, to travel−want to be rewarded for their everyday behaviors, not just their business. Thus, brands should provide consumers with the opportunity to earn points for things like sharing your company on social media, or subscribing to company emails and newsletters, or referring friends and family. Millennials especially want to be acknowledged for the time and effort they spend connecting with a brand, with 81 percent favoring loyalty programs that do more than offer rewards for purchase. Rewarding consumers beyond their purchases is a great way for brands to form an ongoing relationship with customers. As a result, brands looking to meet consumer needs and build loyalty should try rewarding consumers for their engagement, too.  
 
What is the biggest takeaway from the report?

Baxter: Our findings affirm that loyalty programs must evolve with consumer preferences, from increasing efficiency through new technologies to rewarding consumers for regularly interacting with a brand. Rewards programs are no longer just about earning points, they’re about finding dynamic ways to build ongoing loyalty relationships and let consumers know their needs are understood. Brands should not copy and paste a rewards structure, but rather craft customized reward programs that indicate they appreciate consumers for both their purchases and dedication.  

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