Top 5 Loyalty Rewards Program Trends in 2015
Retail loyalty programs have mostly been known to just give discounts on purchases. The forecast for it in 2015 spells big changes driven by consumer needs. Retailers know the implications of these and are jumping on the top 5 predicted loyalty rewards program trends this year:
1. Customers will favor rewarding engagement other than purchases.
A survey of 1,500 US consumers in April 2014 by Ohio-based customer loyalty research firm COLLOQUY showed that consumers are more interested in incentives that require their involvement – sharing on social media, practicing advocated lifestyle programs and participating in social responsibility programs. Results show that 84% of consumers would prefer to spend more with those retailers that offer such programs. It validates that main point why loyalty rewards programs were created – to start, grow and maintain customer relationships.
2. Loyalty programs will offer experiential rewards other than discounts.
As mentioned above, loyalty programs will now reward customers with things other than discounts. Personalized programs will replace discounts designed to offer experiential rewards to loyal customers. Employees will play a big part of this process because retention marketing needs invested employees. Authentic engagement between employees and customers drives a 5% increase in customer retention that in turn leads to a whopping 80% increase in profits.
Loyalty programs that can identify their top 20% high-spending customers and provide an experience that gives preferential treatment when they go in-store or online will definitely see success. Seventy-five percent of consumers approve of businesses that give special treatment to those who spend more money.
3. Companies will design reward share incentives.
Studies show that 70% of consumers would shop more often and 45% would even spend more if they were given the ability to share their rewards. Companies should bank on this consumer need as giving loyal customers the ability to share their positive experience (rewards) with others will not only increase referrals, it will also see an increase in loyal customers’ visits.
4. Loyalty programs will have to require less effort to join to be successful.
Active loyalty program memberships have declined from 2010 to 2012 by 4.3%. This is because even if customers are interested to be rewarded for their loyalty, they will only actively seek it (or agree to joining) if it will enhance their existing shopping experience. For example, retailers that require loyalty program members to type in an extra code before checking out or need to screen membership before checking in might be doing it for tracking purposes but in reality, they are turning off loyal customers and losing brand loyalty. Make it easier for customers to be rewarded for being loyal to your business.
5. Retailers will collaborate with banks and credit card companies to bring more value to their loyalty programs.
Studies show that 60% of consumers would be more likely to join a retailer’s loyalty program if it will allow them to earn extra rewards when they use their debit or credit cards. Credit card benefits often include cash back and airline miles and retailers will have to add more value to their program to be able to lure more customers in. Again, making it easy for them would the key. Fifty-three percent of customers would prefer if they could connect their debit or credits to loyalty programs to collect rewards without having to do any additional steps (like using extra cards or apps).
Loyalty programs reward customer loyalty also act a marketing tool for your business. When used properly, this will be a very effective tool in driving more customers, increasing brand loyalty, transforming brand advocates and increasing profits for your business. Use it wisely.