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It’s harder than ever to keep members engaged with loyalty programs. According to our new Hawk Incentives research, respondents belong to an average of 6.2 programs, but consider themselves active members of only 3.9 programs.1 Here are some of the other key findings about more effective reward strategies that the research revealed.
Choosy members choose reward cards
In our experience, there are plenty of reasons why people really like reward cards. First of all, they enable choice; a gift card for a department store lets the member choose the perfect green skirt—or not, if skirts aren’t their style. Plus, reward cards can be delivered physically or digitally, whichever the recipient prefers. And if you offer a wide variety of prepaid cards, which can be used almost anywhere, or gift cards, good only at specific merchants, you’re much more likely to please all of your members.
Reward cards are most attractive to members of these types of loyalty programs:1
• Online retailers (70% prefer reward cards)
• Phone companies (65% prefer reward cards)
• Utility companies (61% prefer reward cards)
• Retail stores (56% prefer reward cards)
• Banks (56% prefer reward cards)
Chump change for some, a chunk of cash for others
Some members (48%, in fact) classify themselves as point hoarders. And 74% of our respondents agreed with the statement, “I save my points for bigger rewards.” That’s what they say, but that’s not what they do.
Of the nine loyalty program types that we explored in our research, only two sets of members—airline and hotel—are more likely to wait to redeem for a reward valued at over $100. For the rest, the respondents prefer to redeem well below the $100 mark, and often at least twice a year.1
What does this data mean for you? Simply put, provide plenty of options to redeem early and often. For example, 70% of respondents who belong to a food and beverage company loyalty program would redeem for a reward valued at $5 to $20. And even for a hotel loyalty member, 40% of respondents would redeem for a reward valued under $100, so don’t overlook the $10, $25 and $50 options.1
You’ve hooked them, now don’t let them go
Look, if members want to engage frequently, give them the opportunity. You have nothing to lose, and everything to gain. If your members think they’ll never be able to earn enough points to redeem for a handful of aspirational-only rewards, you’ve lost their attention. And there’s a good chance you’ll never get it back, because there’s always another shiny new loyalty program out there to reel them in.
1 The Loyalty study was an online survey of 1,500 Americans completed between February 5 and February 15, 2018, using Leger’s online panel, LegerWeb. The margin of error for this study was +/-2.5%, 19 times out of 20.