Some 7 in 10 (71% of) US consumers belong to a traditional customer loyalty program, with 4 in 10 saying they belong to 3 or 4 of them. Despite their popularity, consumers say they aren’t satisfied with their traditional loyalty programs. Indeed, 8 in 10 (81%) are considering upgrading to premium programs, per a survey [download page] from Clarus Commerce.
Brands and consumers alike appear to be fond of loyalty programs of all kinds. In fact, consumers are likely to adjust their spending behavior to maximize their loyalty programs as well as recommend brands with good programs. However, only about half of loyalty program members are considered active, and expectations of rewards programs have changed since the pandemic.
Consumers, especially younger ones, are increasingly willing to pay for the features they want, even if that means investing in a premium loyalty program. Even though 77% of Millennials and 78% of Gen X are already members of premium loyalty programs, the report contends that members of Gen Z are more likely than other age groups to be part of premium loyalty programs (70%) as opposed to traditional ones (63%). That said, Millennials are the most likely to upgrade, with 92% saying they are likely to invest in a retailer’s premium loyalty program if they already belong to that retailer’s traditional loyalty program.
Those interested in paying for premium loyalty memberships are most interested in categories such as groceries (58%), clothes and accessories (49%) and health and beauty (36%).
So, what are consumers looking for in a premium loyalty program? Almost two-thirds (64%) say free shipping. Alongside free shipping, about half (51%) say that they would be motivated to invest in or renew their premium loyalty program by faster shipping. Indeed, faster, free shipping is the top reason for joining Amazon Prime for three-quarters of respondents. It is also why more than half (58%) say they renew their membership.
Other top motivators for premium loyalty programs include instant discounts (53%), giveaways (47%) and surprise rewards (35%). Consumers also say they expect to see these benefits immediately (38%) or at least within the first week (34%).
The full report can be found here.
About the Data: Findings are based on a late March 2021 survey of 2,500 US consumers.