Just 29% of US consumers can be classified as “resolute loyalists” in that they describe themselves as very loyal, buying only their favorite brands. While virtually no consumers say they’re not loyal at all, most (68%) instead describe themselves as somewhat loyal but able to be convinced to buy a competitor’s brand, per a study from Maritz Motivations Solutions and The Wise Marketer.
The newly-released study, along with with a separate new study from Bond Brand Loyalty [download page], offer insights into loyalty behavior and loyalty programs. Here are 6 highlights.
1. Resolute Loyalists Are Less Price-Driven, Depend More on Quality
Compared to “transient” loyalists (those who can be convinced to buy from another brand), “resolute” loyalists are less driven by discounts, promotions or rebates. While such promotions are what they would most prefer in exchange for maintaining their loyalty, so-called “resolutes” show a greater affinity than “transients” for great products and/or customer experiences, along with opportunities to connect with other people who also love the brand.
The same discrepancy can be seen when looking at switching behavior. While “transients” are twice as likely to cite price (57%) as quality of products/services (29%) as their top reason for switching brands, “resolutes” see these factors as being almost on par (41% and 35%, respectively).
2. Resolute Loyalists Enjoy Social Benefits
Not only do “resolutes” enjoy connecting with other like-minded people more than “transients,” but they also like to have their referrals rewarded in a more altruistic way.
In fact, “resolutes” are more likely to engage in referral behavior in order to have their friends and family join in the brand experience with them (39%) than for a financial benefit or reward for them personally (33%). The opposite is true for “transients,” who are more motivated by personal benefit (41%) than a social experience (36%).
Moreover, the ability to gift something of value to someone else appears to be a greater driver of referral behavior for “resolute” than “transient” loyalists.
3. Loyalty Programs Are Considered Very Important
The encouraging news is that “resolute” loyalists are enthusiastic about loyalty programs: fully 8 in 10 see them either as a priority (34%) or as very important (45%) to their consumer experience.
“Transients,” for their part, are also committed to loyalty programs, though not quite as fiercely: about 6 in 10 see them as a priority (12%) or as very important (47%).
These figures are backed up by survey results from the Bond Brand Loyalty report, in which:
- 71% of US members reported that loyalty programs are a meaningful part of their brand relationships;
- 70% said they’re more likely to recommend brands with good loyalty programs;
- 77% feel that programs make them more likely to continue doing business with brands; and
- 63% modify their brand spend to maximize loyalty benefits.
4. Loyalty Programs Are Particularly Important for Credit Cards, Travel/Hospitality
The Maritz study found that consumers ascribe the most influence to the loyalty programs offered by Credit Card Service Providers (53% describing as “very influential”), Hotels (49%) and Airlines (49%).
These providers are among those offering the most rewarding (pun intended) programs, too. In the Bond Brand Loyalty report the highest rate of member satisfaction was with Grocery (50%), but Credit Cards (48%) followed next and Hotels (47%) were close behind.
However, while loyalty programs are highly influential in the Airlines sector, just 36% of members are satisfied with those programs, the lowest figure of the 12 sectors tracked.
The Bond Brand Loyalty report also identifies the top-ranked brand programs within each sector. Some category leaders follow:
- Airline: JetBlue TrueBlue
- Hotel: Hilton Honors
- Grocery: Giant Eagle fuel-perks!
- Department Store: Kohl’s Yes2You Rewards
- Casual Dining: Papa John’s Papa Rewards
- Gas & Convenience: Kroger Fuel Program
5. Members Want Benefits to be Relevant, Easy to Earn
An estimated 54% of loyalty program memberships in the US are inactive, according to a report released last year. That study – from COLLOQUY – noted that the most commonly-cited reasons for abandoning a program were: taking too long to earn points or miles for rewards; and
the program not providing rewards/offers the member was interested in.
As luck would have it the Maritz study came to the exact same conclusion. Among both “resolutes” and “transients” the top two reasons given for program disengagement were the program benefits/rewards being too hard to earn and the program benefits/rewards not being appealing.
Those frustrations make sense given that the primary reason for joining a program among both groups is to earn rewards.
As for the rewards that are most appealing? Cash back or credit and gift cards do the trick, per the Maritz study, with unique activities and experiences less popular.
6. Members Don’t Feel Appreciated Enough
Loyalty programs are missing an opportunity to offer meaningful experiences to their members through effective brand representatives. This is demonstrated by the only 1 in 5 members surveyed by Bond Brand Loyalty who said they get help to make the most of their membership (20%) and who feel special and recognized by brand representatives (19%).
It’s worth noting that a sizable proportion (37%) of respondents – climbing to almost half among younger generations – are willing to pay a fee for an enhanced tier of membership in their programs. This is further evidence that a large group of members desire a high level of access and recognition.
The Bond Brand Loyalty report can be downloaded here, while the study from Maritz Motivations Solutions and The Wise Marketer can be downloaded here.