Loyalty programs are critical to success, study finds
IF YOU don't offer customers a loyalty program, perhaps you should consider doing so.
A new study shows that such programs are critical to brand success and longevity in today's competitive market.
Just how helpful such programs are in boosting your sales is shown in an in-depth survey of 1,500 American consumers by gifting company Snappy.
It reveals how customers align their loyalty and spending to brands and businesses.
Business competition continues to rise, and even the most successful heritage brands cannot rely on brand legacy for survival.
Emotional link
Cultivating an emotional connection and earning meaningful customer loyalty is key to ensuring a company can continue to grow, according to Snappy.
The company's 2024 Customer Loyalty Study finds that the most important features of a loyalty program—according to customers polled—are:
2. Earning exclusive discounts or coupons that are unavailable to non-members.
3. Access to exclusive membership perks, such as a dedicated customer service team, free shipping, or personalized offerings and incentives.
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The study finds:
• Most consumers (70%) report loyalty program offerings are a key factor when considering which companies and brands they choose to do business with.
• Seven in 10 customers (72%) report they will join a customer loyalty program before making their first purchase.
• 76% of respondents report they will spend more money with companies when they're part of the brand's loyalty program.
The survey also found that when choosing a company to engage with, customers prioritize product quality (67%), price (64%), customer service (51%), and whether the brand/company offers a rewards or loyalty program (47%).
• Most consumers (70%) report loyalty program offerings are a key factor when considering which companies and brands they choose to do business with.
• Seven in 10 customers (72%) report they will join a customer loyalty program before making their first purchase.
• 76% of respondents report they will spend more money with companies when they're part of the brand's loyalty program.
The survey also found that when choosing a company to engage with, customers prioritize product quality (67%), price (64%), customer service (51%), and whether the brand/company offers a rewards or loyalty program (47%).
When quality, price, and service are equal, therefore, compelling customer loyalty programs can significantly impact business success.
Not all loyalty programs are created equal, however, and what brands offer matters in earning ongoing customer loyalty.
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Once a customer is part of a company's loyalty program, keeping them engaged and interested is an ongoing challenge that requires a thoughtful strategy.
• Three in 4 customers (73%) report that when they receive quality gifts or exclusive merchandise as part of a customer loyalty program, they see the brand more favorably.
• The vast majority of customers (91%) report they are specifically interested in loyalty programs that offer the option to select a gift for themselves as part of their reward offerings.
• Consumers seek extra acknowledgment and benefits from loyalty programs during key moments in their customer journey: birthdays (90%), the holiday season (60%), and the anniversary of a first brand interaction, purchase, or membership sign-up date (59%).
Customer engagement will have its ebbs and flows. When customer engagement lapses, the study finds companies can re-engage loyalty program members by increasing reward value offerings (45%), offering unexpected rewards or incentives (25%), sending a gift (16%), and promoting new benefits, offers, and news about the brand (13%).
There are a few pitfalls to avoid when creating a successful and engaging customer loyalty program. According to the study, the most common mistakes companies make with loyalty programming include offering unattractive rewards (71%), having a complicated reward redemption process (71%), offering cheap or invaluable incentives (68%), and having poor communications about their membership and loyalty programming (39%).