What U.S. Brands Can Learn from Australian Customer Loyalty Study

Loyalty marketers are always seeking more insights to leverage to magnify the customer experience and customer loyalty levels.

They might be able to find some insights in this department from a new Australian customer loyalty research report titled, For Love or Money 2017.

Loyalty360 talked with Adam Posner, CEO of the Australian-based The Point of Loyalty, about this provocative study.

What is the biggest takeaway (either positive or negative) from this study?
Posner: For love or money 2017 is the fifth loyalty study that continues to benchmark the Australian loyalty landscape. With that ongoing trend analysis available, the big surprise this year is the huge improvement in member interaction with loyalty programs based on just two metrics of program success (there are others): 

Defection from programs is declining. Defection based on members actively leaving their programs (requesting to be removed) and passively leaving (simply stopped participating), the 2017 research identified defection at 18 percent, the lowest since 2013.

Enjoying the benefits earned from programs is increasing. Another indication of improved program interaction is when members actually redeem and enjoy the benefits they have earned from engaging with a program. In 2017, 64 percent of members enjoyed the benefits they earned, up from 54 percent in 2016. Millennials are even more engaged with 68 percent indicating that they enjoyed benefits they earned from their membership of programs.

Can you talk about what you learned from this study as it relates to the current state of customer loyalty in Australia?
Posner: For the first time in these research studies, we set out to understand what loyalty is from the consumers’ point of view (beyond enrolling in a loyalty program). 

It has been my ongoing experience when consulting with clients on customer loyalty strategies and loyalty programs, that when I ask them “what does loyalty mean to you” (in the context of their customers and their business/brand), a variety of points of view are shared with many of the leadership team not aligned internally on what loyalty is! 

Why does this matter? When you know what loyalty is and why it is important to your business, then the chances of a successful execution are greatly improved. 

For love or money 2017 put forward 11 indicators of loyalty to consumers and the results from this research have now provided clarity on the consumers’ view and subsequently we have developed a clear definition. “Loyalty is both behavior and belief. Behavior is a transactional connection identified by customers purchasing more and more often over the longer term where similar competitor forces are in play. Belief is an emotional connection where trust is inherent and recommendation results.”

Where have Australian loyalty programs improved and where do the challenges remain?
Posner: Programs continue to be challenged by the volume and variety of data being captured by members interacting with programs. By challenged, I mean how to use that data with relevance and personalization, rather than just one size fits all. 

The other area of ongoing challenge is to maintain the commitment and belief of the wider organizational team to loyalty and loyalty programs and why they are at the epicenter of success, especially at store-level. As for improvement and as already mentioned, defection is declining and members are enjoying the benefits of rewards earned.

What are some of the key study findings?
Posner: The average number of memberships is at its highest level since the study began and millennials continue to be heavily engaged in programs with the most memberships.

For the past three studies, we have researched if brands need a loyalty program to keep their customers loyal. In 2015 and 2016, the results were not that convincing with 58 percent and 57 percent saying yes, respectively. In 2017, however, 64 percent said yes! The need to be rewarded by brands for their ongoing custom is coming through loud and clear from consumers. The type and structures of programs that need to then be crafted are varied, however, and will need to have the tension and fine balance of being profitable to the business and meaningful to members.

What do Australians want out of a loyalty program?
Posner: Our 24 ingredients to a successful program are what members of programs want from a program and the top nine (as ranked by members) that came through this year are:

1. The rewards/benefits/points are easy to earn 2. My rewards/benefits/points do not expire (a big discussion point in boardrooms) 3. The program is easy for me to redeem rewards and benefits 4. The program is easy to understand 5. I can accumulate points over time that can be redeemed for benefits or rewards 6. Rewards are tailored and relevant to me 7. I receive an immediate discount or benefits at the time I make a purchase   8. I am recognized for being a loyal customer 9. I can earn rewards and benefits based on how much I buy.

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