Consumers seeking more immediate rewards
Consumers are no longer prepared to wait for incentives such as cash back and the reward schemes built up from their credit cards, with many instead simply searching online for coupons and voucher codes for instant discounts and money off offers, according to online voucher service VoucherSeeker.
A recent study by Granby Marketing Services found that 60% of British consumers think that an immediate reward is the most important aspect of a marketing promotion, whilst 39% would be most interested in a simple price discount.
Overall, 87% of consumers said they would be willing to switch from their usual brands for a promotion such as a discount voucher. Given the currently poor economy in most countries, it was not surprising that most consumers said they no longer want to shop without rewards.
In fact, recent research from Sainsburys Finance found that two-thirds of the UK's credit cards offer some form of reward to encourage greater spending, and consumers are more aware than in the past of the rewards they can earn using their credit cards.
And, according to a credit card rewards study by TNS, cashback programmes rose in popularity from 57% in 2007 to 61% in 2008, becoming the most popular type of rewards programme across all age and affluence ranges However, Sainsburys also noted that the number of credit card rewards being offered are beginning to decline in the UK, which may explain why more consumers are now turning to internet-based discount vouchers.
"It appears that people are seeking immediate benefits that impact quickly and directly on cash flow," explained VoucherSeeker director, Neil Ainsworth. "Maybe consumers simply want to be rewarded for the money they spend with money back so they have no restrictions on what to spend the reward on."
As a result, credit card providers are having to reassess how they give consumers rewards as consumers become more demanding in terms of what they want in return for their loyalty.
"In order for card issuers to survive in the current market they will need to offer more of what consumers want and think is important," concluded Ainsworth.
Sources: VoucherSeeker; Granby Marketing Services; TNS / The Marketing Factbook.
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