How Have Consumers’ Expectations of Rewards Programs Changed Since COVID-19?

October 5, 2020

Merkle Data Privacy Attitudes Rewards Programs Oct2020Consumers are willing to modify their buying in order to optimize the benefits of their loyalty programs. But they may be less likely than they were in the not-so-distant past to share certain types of personal information in order to make those loyalty programs more relevant to them. Per a recent report [download page] from Merkle, consumers’ feelings have changed when it comes to sharing personal data with rewards programs and what they want from those programs.

In an effort to examine what, if any, impact the pandemic has had on consumer sentiment, Merkle has updated its research originally released in March. In comparing findings from October 2019 to those of July 2020, the survey of more than 1,500 US consumers shows that some types of loyalty or rewards hold a different level of appeal than they once did.

While consumers still find programs that earn points for rewards the most appealing, rewards programs where consumers get a $10 reward when they spend $100 have moved up a spot to second. Also, moving up in ranking to #3 are programs that offer consumers a new reward every Monday (up from #4), while programs that enable participants to earn points for purchasing across many retailers have fallen from #2 to #4. The least appealing to consumers, in a result that remains consistent across both survey periods, are programs where consumers get a surprise reward for participating.

Merkle attributes the shift towards more consistent reward structures and away from earning rewards across several retailers to the financial instability brought on by the pandemic. A reluctance to visit many retailers may also play a part.

Gamification of Programs Appeals

Another area that has possibly been impacted by COVID-19 involves the features consumers would like to see in a loyalty program. Previously, consumers were interested in the chance to win large prizes, VIP tiers and donations to charity. Although consumers still want to see these features, fewer chose them in the most recent survey.

Instead, consumers appear slightly more interested in gamified features such as tracking milestones (25% up from 21%), challenges (24%, up from 22%), badges (15%, up from 11%) and leaderboards (12%, up from 9%). These features, according to the report, “provide consumers with a sense of control in these uncontrollable times.”

Sharing Personal Information

Research from last year shows that a relatively small number of marketers use customer data for their loyalty programs. That said, consumers’ willingness to share personal information so that brands can personalize their reward experience has decreased in the 9 months between surveys. Across the board, consumers who say they are comfortable letting brands use information like personal history (52% vs. 59%), current rewards status (49% vs. 56%), gender (49% vs. 52%) or income (19% vs. 21%) has decreased.

While Merkle ties this decrease in willingness to part with personal data to recent events, separate research from WARC and the Advertising Research Foundation found that US consumers generally appear to be more willing to share sensitive data such as health-related data, especially if it was useful in fighting the pandemic. This is particularly true for consumers whose jobs have been affected by the pandemic and for those who have contracted COVID-19.

To read more the Merkle report can be downloaded here.

About the Data: Findings are based on surveys of more than 1,500 US consumers ages 18-65.


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