What’s clear is that loyalty programs continue to grow in popularity with consumers.
What’s not so clear is what programs work best, what rewards consumers want the most and what the impact of technology is on delivering loyalty programs more effectively and profitably.
What’s research say about loyalty programs?
The most important take away from recent research reports?
- loyalty programs continue to grow substantially year-over-year
- loyalty programs influence consumer intent and purchase behaviors
- technology is changing the delivery and use of loyalty programs
- brands need to up their loyalty program gain by making them available in several channels, personalizing rewards and adding innovative new ways for members to earn rewards
- millennials present a growth opportunity for brand loyalty programs.
20 valuable loyalty program research stats
- Loyalty programs have more than 3.3 billion loyalty program US members, an average of 29 per household (Colloquy)
- 55% of U.S. respondents said they had joined a loyalty program in the past year, for example, with 63% of millennial respondents having done so (Colloquy)
- 46% of loyalty programs members consider them vital in their purchase decisions. (InReality)
- Consumers think loyalty programs are part of relationships with brands. (Bond)
- 34% of customers would not be loyal to the brand without the brand’s loyalty program (Bond)
- Biggest industry loyalty programs? Retail – 1.3 billion members (39%), travel & hospitality – 900.8 million members (27%) and financial – 571.9 million members (17%) (Colloquy)
- Fastest-growing emerging platforms? Drugstores up 80% from 2012 and restaurants up 107%. (Colloquy)
- Tech-savvy millennial use mobile apps (33%), smartphones/tablets (27%) or wearable devices (7%) to check their rewards. (Excentus)
- Millennials check their rewards status daily (13%) compared with Generation X (10%) or Baby Boomers (7%) (Excentus)
- 63% of millennials said they joined a program in the past year, compared to 55% of the general population (Colloquy)
- Boomers (40%) don’t find loyalty programs as essential as millennials (62%) and GenXers (64%). (Chase)
- Three biggest reasons for negative social media sentiment on loyalty programs: no reward relevance, flexibility or value (44%), lack of a seamless multi-channel experience (33%) and customer service issues (17%). (Cap Gemini)
- 77% of transaction-based programs fail in the first two years. (Cap Gemini)
- Only 25% of loyalty programs reward customers for some form of engagement. (Cap Gemini)
- Just 11% of loyalty programs offer personalized rewards based on customer purchase history or location data. (Cap Gemini)
- 51% want to redeem rewards online, 20% on a mobile device, while 13% still prefer in-store redemptions. (Collinson Latitude)
- 16% of loyalty programs reward customers for activities such as online surveys, rating and reviewing businesses or referrals to programs. (Cap Gemini)
- 70% of members agree they’d modify when and where they make purchases in order to maximize the benefits received (Bond)
- Loyalty programs are expected to grow more than four times from $1.4 billion in 2015 to $4.0 billion by 2020. (Markets and Markets)
- 68% of companies allocate less than 20% of marketing budgets to loyalty, but 58% generate more than 20% of total sales or revenue through loyalty programs. (Loyalty360)
Reference: Some of these research statistics cited were drawn from an extensive and valuable collection assembled by Access. For additional research reports on loyalty and cashback programs, check out the Cashback Industry News‘ research resources.
Visual: Infographic courtesy of Colloquy.