NEW YORK – Loyalty program members want to receive relevant communications while the connection between personal and program values heightens member engagement, according to the 2013 Maritz Loyalty Report released today at The Soho House in Manhattan.
Maritz Loyalty investigated the link between personal value systems (the internal compass that guides human behavior, decisions, and perceptions) and loyalty program member engagement (satisfaction, the propensity to recommend and to re-purchase). Research contained in the report revealed a tight link between member satisfaction and the extent to which a member’s values are aligned with a program’s values – and that only 40% of program members believe their values are aligned with the values of the programs in which they participate.
Scott Robinson, Senior Director, Loyalty Consulting & Solutions, for Maritz Loyalty Marketing, told Loyalty 360 that the link between personal value systems and loyalty program member engagement is a potential growth area for marketers and opens up a “whole new level” of program marketing.
“The more closely aligned the program’s values are to a member’s values, the higher the member’s satisfaction with the program,” Robinson said.
Robinson said marketers need to identify and understand the extent to which the values profile of their specific brand audience and member base differs from that of the general population. Those differences hold meaningful clues as to the program elements that may be under- or over-represented, and guide program designers toward more engaging programs for their members.
What drives and sustains engagement between a brand and its customers is unique to each customer and, as Robinson said, marketers need that old-style barber shop 1-to-1 relationship to enhance their loyalty programs. Robinson said the “one size fits all” business model is outdated for loyalty programs.
Maritz reviewed an existing personal values inventory created by Dr. Shalom Schwartz, who determined personal values that guide decision-making exist across two dimensions – the extent to which an individual thinks of and acts in the best interest of self versus others; and the extent to which an individual seeks stability versus change. Ten value dimensions – achievement, pleasure, stimulation, self-direction, universalism, benevolence, conformity, tradition, security, and power – are included among four value segments: Self Transcendent, Self Enhancement, Open to Change, and Conservation.
Robinson said dominant values for members of the Self Transcendent group include universalism (seeks social justice and tolerance for all; promotes peace and equality) and/or benevolence (very giving, seeking to help others) and they have higher preferences for program mechanics such as giving points to a charity. They tend not to redeem points as soon as they’re eligible to redeem them, and tend to redeem for less frivolous rewards.
Robinson said 46% fall into the Conservative group, while 23% area Open to Change; 18% are in Self Transcendence; and 11% Self Enhancement. He added that it represents a “huge call to action” for loyalty marketers given that enabling members to fulfill on their personal values as part of a loyalty program may result in a more highly engaged and satisfied member base.
“Confirming a link between personal values and member engagement is very exciting,” Robinson wrote in the report, “and the application of which promises to arm today’s loyalty marketers with additional necessary insights to design more relevant and engaging programs.”
Meanwhile, the report revealed that 94% of respondents indicated they want to receive communications from their loyalty program. But only 53% of respondents described those communications as relevant.
“This represents significant untapped potential for marketers,” according to the report. “The first marketers who solve this dilemma will differentiate themselves and strengthen the satisfaction and the brand loyalty they enjoy with their key customers.”
Although 46% of respondents want to receive communications from three or more channels, email (74%) is the preferred channel.
In many categories, communications methods/relevant communications were among the top five loyalty program drivers. Some other key drivers included ease of redeeming for rewards, ease of tracking balance, ease of understanding how program works, and the quality of rewards.
Interestingly, given the high percentage of smartphone users, the mobile channel is preferred by only 37% of program members. Robinson believes there is a blurred perception among members between email channel preference and mobile channel preference since email is often read on a smartphone.
According to the report, 29% of respondents won’t join a loyalty program because the company requires too much information and 24% won’t join due to privacy concerns – believing their name might be sold to marketers.
Consumers are members of 7.4 loyalty programs, according to the report, but are active in a little over 60% of them.
“There are customers who just aren’t engaged,” Robinson said.
Loyalty is part of the brand relationship and 80% say it’s worth the effort of participating, according to the report. Potential barriers to program enrollment include fees (68%) and irrelevant benefits (66%). Loyalty marketers count on their programs to curb customer attrition, but 53% of members enrolled in loyalty programs stopped actively participating in at least one program in the past year.
The most active loyalty program members fall into the Grocery (72%) category, followed by Financial Services (69%), Retail (64%), and Airlines (62%).
The report surveyed more than 6,000 consumers and captured program-level feedback from more than 30 national programs across six industry sectors – Retail Loyalty, Grocery Loyalty, Credit Card Loyalty, Co-Brand Loyalty, Travel, and Hospitality.