Loyalty Programs Trigger More Customer Purchases

Customers make more purchases from companies with loyalty programs, according to a study by Directivity and Citrus.

The study -- “For Love or Money: 2013 Consumer Study into Australian Loyalty Programs -- surveyed over 1,000 Australian consumers and found that 88% of those over 16 belong to at least one loyalty program. Most respondents (80%) indicated they buy more from companies where they are loyalty program members, and from companies (55%) that have loyalty programs.

What’s more, the study revealed that 11% belong to 10 or more loyalty programs. A surprise finding in the study shows that men are members of three loyalty programs while women typically belong to five. But men are more active with their memberships: 49% of men are active in all of their loyalty programs, compared to 41% for women.

Although loyalty programs influence buying behavior, they don't necessarily translate to customer loyalty. A revealing statistic in the survey shows that less than half of the respondents indicated they feel more loyal to a brand with which they are a loyalty program member.

"It's our view that loyalty programs on their own do not engender loyalty, as there are many factors that influence loyalty, not just a program," according to the report.

Financial rewards ranked as the No. 1 benefit customers seek the most, with 80% agreeing that immediate discounts were important. Second on the benefit list was points-based programs where members can redeem points for vouchers, products, or other rewards. The third on the benefit list, but uniquely appealing to many customers, was loyalty programs possessing a “surprise and delight” tactic on occasion. Customers (67%) said they enjoy receiving “surprise gifts or surprise rewards” without having to make a redemption.

 According to the study, only 41% think loyalty programs have improved in recent years.

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