New Report: Return On Loyalty Program Investments Higher Than Ever Before
07 Jun, 2016, 07:10 ET
Nearly 70 percent of consumers modify brands they engage with to earn points; Most loyalty programs fall short when it comes to personalization and customer experience
TORONTO and NEW YORK, June 7, 2016 /CNW/ - Bond Brand Loyalty, North America's leading brand loyalty agency, today released its sixth annual consumer loyalty report. The Canadian edition of the 2016 Bond Loyalty Report reveals that 80 percent of consumers say that loyalty programs make them more likely to continue doing business with brands. Despite this, the report finds that many programs are missing the opportunity to personalize offers and communications. Only 12 percent of Canadian respondents are very satisfied with the level of personalization they're getting from brands; yet, satisfaction is 14 times higher when programs are highly personalized. When it comes to customer experience only 9 percent strongly agree that a brand or program representative makes them feel special and only 14 percent of respondents feel that the program experience is consistent across varied touch points (such as online, by email, by phone and in person).
The 2016 Bond Loyalty Report, conducted in collaboration with Visa, is the largest study of its kind. The report captures responses from roughly 12,000 U.S. and 7,000 Canadian consumers, and covers more than 58 dimensions of loyalty program performance including program mechanics, communications, rewards, needs fulfillment, loyalty emotional and behavioural outcomes, and brand alignment.
Year-over-year program satisfaction is steady at 32 percent even as loyalty solutions continue to innovate, indicating that member expectations are increasing just as quickly as programs are evolving. Developing meaningful loyalty programs that meet customers' needs while deepening their relationship with brands is a difficult challenge, but when designed and operated effectively can reduce program costs and strongly influence consumer behaviour.
- Consumers belong to an average of 11.3 loyalty programs, but are active in only 7.3 programs.
- The number of consumers who say they modify the brands/companies they purchase from in order to maximize points continues to increase (68 percent, up from 65 percent in 2015, 55 percent in 2014 and 41 percent in 2013).
- 66 percent of members are more likely to recommend brands with good loyalty programs, which equates to a boost in member acquisition and reduced marketing spend. Top retail programs that members are very likely to recommend include MEC (Mountain Equipment Co-op), Metro & Moi, SCENE and Costco Membership.
- 63 percent of consumers modify amounts spent to maximize points.
Program Satisfaction, Brand Alignment and Rewards Redemption
- Program satisfaction holds steady from last year—less than a third (32 percent) of program members are very satisfied with their loyalty programs, which points to a need for continued focus on program enhancements and improvements to keep up with consumer expectations.
- 23 percent of members feel that their program fits very well with what they expect from a brand. Top ranked brand-aligned retail programs include Shoppers Drug Mart Optimum, Amazon Prime, Metro & Moi and My Canadian Tire 'Money' Card.
- The rewards and redemption experience is key to member satisfaction, yet more than a quarter of members have never made a redemption. Rewards play an important role in retention, as non-redeemers are 2.1 times more likely to defect than recent redeemers, suggesting brands would be well served to focus on the redemption experience, not (just) the reward itself.
- Credit card loyalty programs can benefit by offering instant retail and online points redemption both to lower the cost per point but also to improve the program experience, as 61 percent of consumers find this redemption option appealing, and 27 percent are willing to pay a points premium for this convenience.
- Drugstore and grocery loyalty programs are 1.6 times better at meeting the needs of female vs. male Canadians.
- Non-affluent Canadians (<100K in household income) love CPG loyalty programs 5 times more than affluent Canadians (+100K in household income).
- Only 8 percent of female and 16 percent of male Canadians agree that coalition loyalty programs are meeting their needs.
- Millennials have unique and increasing demands and require further program differentiation:
- Millennials are 1.5 times more willing than boomers to pay a premium for products and services if they can also earn loyalty and reward points.
- 44 percent of millennials are comfortable receiving product recommendations based on their purchase history, compared to only 30 percent of boomers.
- Substantially more millennials value programs that offer special services like concierge (46 percent of millennials vs. 22 percent of boomers).
Mobile is a strategic advantage (but missed opportunity)
- 44 percent of members want to engage with programs on a mobile device.
- More than half (58 percent) of program members don't know if there is a mobile app to complement their loyalty program.
- Outside of a program app, consumers are most interested in using their mobile device to check their points balances (50 percent), read program emails (45 percent), find a location/store (45 percent) and redeem rewards points (44 percent).
Leaders in Loyalty
The 2016 Bond Loyalty Report performs in-depth profiling of more than 280 loyalty programs across key sectors including payment, retail, hospitality, airlines, gas, dining, CPG, coalition and others. Some of the top Canadian loyalty programs leaders within their sectors based on overall member satisfaction include Shoppers Drug Mart Optimum, Metro & Moi, My Starbucks Rewards, Johnson & Johnson Healthy Essentials and the PC Financial Debit Card.
Informal Loyalty Brands Perform Well
The study also looked at a number of informal loyalty brands—these are brands without a formal loyalty program, but who engage in many similar mechanics to keep their customers happy and loyal. The study provides insights into what these brands are doing well, and how these learnings can be applied to formal loyalty programs. Top informal programs ranked on member satisfaction include Dollar Shave Club, Netflix and Apple Genius.
"Marketers are telling us that loyalty program investments are paying off in a big way," said Bob Macdonald, President and CEO of Bond Brand Loyalty. "This report arms decision makers with the critical insights required to build better strategies, keep up with consumer expectations, and drive more profitable outcomes for brands."
For more information about the 2016 Bond Loyalty Report and to download a free copy of the Executive Summary, visit http://info.bondbrandloyalty.com/2016-loyalty-report.
About Bond Brand Loyalty
Bond Brand Loyalty is a management-owned agency that specializes in building brand loyalty for North America's most influential and valuable brands. Bond Brand Loyalty's mission is to make marketing more rewarding for customers, richer and more resilient for brands, and more profitable for our clients. We build measurable, authentic and long-lasting relationships through a combination of services that includes loyalty solutions, customer experience, marketing research, customer analytics, live brand experiences and proprietary loyalty technology platforms. Visit our website, follow us on Twitter or contact us at 1-844-277-2663.
SOURCE Bond Brand Loyalty
Image with caption: "The 2016 Bond Loyalty Report (CNW Group/Bond Brand Loyalty)". Image available at: http://photos.newswire.ca/images/download/20160607_C2970_PHOTO_EN_707695.jpg
For further information: Shannon Wojcik, 585-831-6267, [email protected]
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