As 2016 wanes toward completion with 2017 just ahead, loyalty programs are gaining momentum and appear to be more popular than ever.
According to Nielsen’s Global Loyalty Sentiment Survey, more than 74 percent of loyalty program participants that responded to the survey indicated that loyalty programs make them more likely to continue doing business with a company.
What’s more, 67 percent agree that they shop more frequently and spend more at retailers with loyalty programs.
Financial rewards are the most highly valued loyalty program benefits for members of all ages, but younger loyalty program participants value a few non-monetary benefits more highly than their older counterparts.
Consider that 15 percent of millennials said that higher-priority service, such as first-class seating or VIP customer service, is one of their top three loyalty program benefits, more than double the percentage of baby boomers and silent generation respondents (6 percent of each group). In addition, 12 percent of millennials say their most valued benefits include personalized products or service experiences, and 10 percent say the same of charitable donations. These response rates are more than three times higher than for baby boomers (3 percent for each type of benefit) and silent generation respondents (4 percent and 3 percent, respectively).
The Nielsen Global Loyalty Sentiment Survey was conducted March 1-23, 2016 and polled more than 30,000 online consumers in 63 countries throughout the Asia-Pacific, European, Latin American, and Middle Eastern/African markets.
Greg Tarczynski, VP of retail consulting & analytics at Nielsen, told Loyalty360 why loyalty programs are more attractive to customers now.
“The combination of smartphones and social networks is providing vast amounts of data that can be mined for precise targeting,” Tarczynski said. “While some consumers express privacy concerns, there are many consumers who expect that offers be made relevant to them. Additionally, providing mobile access to the program and offering services such as mobile payments is important to consumers. As omnichannel retailing grows, the mobile app will be the tool that spans the user experience across brick-and-mortar to digital.”
Active participation, though, remains a challenge for most loyalty programs.
“Consumers will participate when they perceive a clear benefit,” Tarczynski added. “The key is to make it simple. That said, consumers crave value and flexibility in loyalty programs. According to Nielsen’s Global Loyalty Sentiment Survey, more than seven in 10 loyalty program participants (72 percent) somewhat or strongly agree that all other factors equal, they will buy from a retailer with a loyalty program over one without.”
Tarczynski noted the following factors for loyalty programs from the study:
Digital loyalty program attributes or features are particularly appealing
Apps are somewhat or very appealing (69 percent versus 60 percent globally). Retailers will need to ensure that they offer loyalty program benefits through a mobile app. As more people go mobile they show a strong preference for having access to these features
“Continued growth of location services such as in-store beacons that allow promotions to be pushed out to a consumer in real-time as they navigate through a store,” Tarczynski added. “Loyalty programs will need to offer mobile payments or e-wallet capabilities as consumers continue to move away from cash-based payment systems.”