Effective loyalty programs have proven to be key differentiators for their respective brands, so much so that investments in customer loyalty budgets will increase in 2017, according to a new research report released by CrowdTwist and Brand Innovators.
“While many brands are daunted by the roadblocks ahead, they are increasingly committed to making loyalty a priority by putting their money where their mouths are, with the majority predicting that their customer loyalty budgets will increase in 2017,” the report says.
Geoff Smith is CMO of CrowdTwist, a provider of multichannel loyalty and engagement solutions.
“There is an increasing focus on loyalty,” Smith told Loyalty360. “More and more brands are realizing the importance of incorporating loyalty into their marketing mix. In fact, more than 50% of the brands we surveyed plan to increase their investment in customer loyalty programs. That shows a commitment to the industry, as well as a growing interesting in providing greater customer experiences.”
CrowdTwist and Brand Innovators surveyed 234 digital marketers at Fortune 500 brands over a one-month period from March 2016 to April 2016. The purpose of the survey was to study how leading brands are evolving the way they interact with consumers and how loyalty intertwines those efforts.
Overall, the survey base represented a diverse set of industries, from retail and food and beverages to real estate and utilities, with the goal of soliciting responses from the widest range of marketing organizations across a diverse set of product types. The sample has significant representation among both tactical practitioners and senior executives (as grouped based on job title). Of those 234, 36 were senior (VP level or above), whereas the bulk (198) were tactical (director, manager, or other). Almost half of the total respondents have been at their companies for five or more years and have been in their discipline for 10 or more years.
Below are some key takeaways from the research report titled, “The Loyalty Evolution: Growing Investment and the Multichannel Promise.”
Focus and spend on loyalty is at the cusp of a surge, with 57% of brands indicating that they will increase loyalty program budgets in 2017
Slightly over half (57%) of the companies polled view their own customer loyalty efforts as extremely to somewhat successful. Interestingly, 38% percent of brands would not classify their efforts as successful or failed, indicating that a significant chunk of the market is still, in essence, trying to find their best strategy in growing customer loyalty
Acquisition and retention remain the most popular way brands measure their customer loyalty programs.
31% of all respondents ranked the main focus of their loyalty program as driving engagement
One in two brands cite siloed transactional data as a reason for not rolling out a loyalty program
Lack of technical resources and money allocation create barriers to getting optimal results from customer loyalty programs
According to a 2015 study by Verint, the top three reasons consumers switch brands are due to: Cheaper pricing (31%); rude staff (18%); and too many mistakes (16%).
Customer loyalty is alive and well, according to the sixth annual Bond Loyalty Report, but marketers must differentiate their loyalty programs to sustain member engagement.
In fact, the report shows that 81% of consumers are more likely to continue doing business with brands that offer loyalty programs.
“Our study affirms that loyalty continues to be a very worthwhile pursuit for brands, and that programs are yielding a positive impact in terms of achieving intended brand loyalty outcomes,” Scott Robinson, VP, Loyalty Design & Strategy, Bond Brand Loyalty, told Loyalty360. “Program operators and marketers will be pleased to affirm their investment in loyalty yields the right outcomes, yet should also take note that they must ensure their programs cut through and differentiate to sustain member engagement and activity.”