Inconvenience & complexity are loyalty program killers
Customers motivated by points, price and convenience
Half of consumers are deterred from joining loyalty programs, according to a study from Kobie Marketing. When asked what barriers prevent them from joining a program, 26% of consumers reported that brands ask for too much information or the enrollment process takes too long, and 22% reported they won't join if it takes too long to earn and redeem points.
The "Loyalty in the Age of the Connected Consumer" report reveals that consumers value convenience and flexibility in loyalty programs, and the opportunity to earn and redeem points drives their decision to join. In fact, 86% of consumers reported that they primarily join programs to collect and redeem points for rewards, and 36% said they join programs specifically to redeem points for discounts and prizes. With one in four shoppers refusing to join a program that requires too many purchases to earn and redeem points, there is an opportunity for brands to make programs more appealing for consumers by offering smaller rewards earlier and more frequently after sign-up.
When signing up for a program, the report found that simplicity in program format is the driving factor for consumers' decision to join. Almost one in four (22%) said they would be most willing to join a loyalty swipe card, 15% said they would most likely sign up for store credit cards, and 11% said they would most want to join a points-based mobile app program.
While points and discounts most influence the decision to join a program, the report found that price is a driving force in the context of customer retention. More than a third (35%) of consumers ranked price as the most significant factor in whether they would return to a brand or shop elsewhere, indicating there are more opportunities for brands to keep customers engaged if they offer free or discounted products as part of their programs to elevate the customer experience around the point of sale.
Other key findings from the report include:
- More than half (51%) of consumers are actively engaged with at least three or more loyalty programs.
- Almost half (45%) of shoppers don't want technology that they perceive as invasive and annoying when shopping with a brand.
- Two-thirds (66%) of consumers report being most likely to make impulse purchases in-store.
- Almost 90% of consumers say that their favorite brands are communicating with them the right amount.
"Consumers now have more options at their fingertips than ever, and they want products and services whenever, wherever and however they've come to expect them," said Dave Andreadakis, chief strategy officer at Kobie Marketing. "While we found price to be a driving factor in consumers' decision to make repeat purchases, the customer experience is paramount before, during and after the point of sale. With this in mind, marketers should focus on engaging early and often, delivering tiered rewards with earlier, smaller redemption opportunities and encouraging simple sign-ups in the beginning."
Sources: Kobie Marketing / The Marketing Factbook.
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