One year ago, Bond Brand Loyalty’s annual research suggested that marketers must differentiate their loyalty programs to sustain member engagement, and most programs fall short when it comes to personalization and customer experience.

Fast forward to The Loyalty Report 2017, and Bond Brand Loyalty officials, in their seventh annual consumer loyalty report, found that, despite the popularity (31 percent enrollment growth since 2013) and attraction to loyalty programs, marketers are still missing opportunities to drive business results.

“Consumers love loyalty programs and continue to join more every year, but active engagement rates have remained flat in the past four years, indicating that there’s a tremendous opportunity to evolve ‘same-old’ programs to ensure members’ expectations and needs are being met,” said Bob Macdonald, president and CEO of Bond Brand Loyalty. “Today’s hyper-informed consumers expect personalized and shared interactions delivered through a combination of human and digital experiences. By engineering the program with every asset of a brand’s loyalty ecosystem, and making adjustments to differentiate the member experience, brands can improve engagement and substantially increase program performance for gains in lift, retention, and lower marketing costs.”

The report reveals some compelling findings, including:

Program enrollment continues to rise, with the average number of programs a consumer belongs to growing to more than 14 from 10.9 memberships from just three years ago, yet members actively engage with only half of those memberships. These findings also reveal the Golden Rule of 7—this is the number of active program memberships that consumers have the appetite and capacity to handle. Brands have work to do to ensure that they are one of the chosen programs.

Investments in loyalty programs continue to increase, but program member satisfaction remains steady year-over-year at about 46 percent. If spend is increasing, but satisfaction is staying the same, changes must be made to the overall experience of the program. Program satisfaction is highest in payment cards and retail such as gas/convenience, grocery, and warehouse. It is lowest in telco services, apparel, automotive OEM and services and consumer packaged goods—though they hold great potential, except for coalition.

Marketers are spending more to maintain program member satisfaction, and programs are highly effective with 81 percent of consumers agreeing that loyalty programs make them more likely to continue doing business with a brand. Holding steady from last year—76 percent of members say that programs are part of their relationship with brands, and 67 percent of consumers modify the brands they purchase to maximize the benefits they earn.

The study found that 73 percent of members are more likely to recommend and say good things about brands with good loyalty programs (making loyalty programs great tools to improve NPS (Net Promoter Score), advocacy, and referral), while 66 percent report modifying spending to maximize point accumulation.

Creating an Enjoyable Customer Experience is Critical to Program Success

Most brands are not treating their best customers best. Only 22 percent of members say they are treated better than customers not enrolled in the program. From this 22 percent, overall program satisfaction is 3.4 times higher than those who do not sense that they are treated better as a program member.

Members who agree that a program is enjoyable are 10 times more likely to be satisfied; only 29 percent of members agree that the program improves their experience with the brand.

The human touch is a critical component of a successful loyalty program experience, yet only 22 percent of program members strongly agree that program representatives consistently make them feel positive emotions, and only 21 percent strongly agree that these same people improve their understanding of the program, including how it works and the benefits.

More members than ever are enrolling digitally, with online enrollment accounting for more than one-half of new memberships; 57 percent of members want to interact with loyalty programs via mobile device; however, 52 percent of members don’t know if an app exists for their programs.

The Redemption Experience is as Important as the Reward Itself

Redeemers are twice as satisfied with loyalty programs as non-redeemers, yet more than one-fifth of program members have never redeemed. Results show that the redemption experience—the anticipation of reward, as well as ease of redemption—is more important than the actual reward.

Surprisingly, 57 percent of members do not know their points balance, and 38 percent are unaware of their points value. Satisfaction peaks as participants become eligible for rewards and drops off following redemption, making it important for operators to minimize the time between redemption periods and progress towards the next redemption quickly.

Some of the top loyalty programs based on overall member satisfaction include: Amazon Prime, Southwest Airlines Rapids Rewards, Hilton Honors, Costco Executive Gold Star Membership, Kohl’s Yes2YouRewards, Kroger Fuel Rewards, Walgreens Balance Rewards, Cabela’s CLUB Rewards, Carter’s Rewards, Sheetz My Sheetz Card, Papa John’s Papa Rewards, and Panera MyPanera.

The Loyalty Report 2017, conducted in collaboration with Visa, is the largest study of its kind. The report captured responses from more than 28,000 consumers in the United States and Canada, collecting feedback on more than 400 programs on 50-plus attributes of loyalty programs, including rewards and redemptions, program and earn mechanics, brand alignment and emotional and behavioral loyalty outcomes, as well as human-to-human and digital experiences.

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