Loyalty Programs: Which Incentives Do Users Find Attractive?

July 28, 2014

This article is included in these additional categories:

Loyalty & Rewards Programs | Mobile Phone | Promotions, Coupons & Co-op | Social Media

TechnologyAdvice-Appeal-Loyalty-Program-Benefits-July2014US loyalty program users are considerably more likely to participate in loyalty programs to save money than to receive rewards, finds a survey conducted by TechnologyAdvice. Of the options listed, almost 6 in 10 respondents chose “saving money” as their primary motivation for participating in loyalty programs, compared to close to 4 in 10 saying they use the programs to receive rewards. Respondents did not have a clear preference for card-based or digital programs, though.

Some 37% said they prefer card-based programs, while one-third prefer fully-digital ones, with the remaining 30% unsure. Despite the relatively even split, separate results indicate that loyalty program users are fairly enthusiastic about the potential of smartphone applications, with 59% more likely to join a loyalty program that offered a smartphone app.

Smartphone apps might spur greater participation in loyalty programs, but social rewards may not: only about 1 in 6 respondents said they would be more likely to participate in a loyalty program that offered social rewards (such as FourSquare-style digital badges). These types of programs might be more popular with Millennials, though: a recent Bond Brand Loyalty study found that Millennials tend to be more influenced by social recognition than the typical loyalty program member. As such, they are more likely to view certain non-monetary benefits as important, such as receiving recognition from their peers/social group and the opportunity to share their product/service experiences with others.

Meanwhile, although respondents to the TechnologyAdvice survey don’t find social rewards appealing, they do have a much more favorable outlook regarding exclusivity-based rewards: roughly 6 in 10 said these rewards – such as a VIP status – would incentivize participation in a loyalty rewards program. But it seems that they would be more of a bonus than a primary feature, as only a fraction of respondents chose them as the primary reason for participating in a loyalty program. (A global study from Nielsen similarly found that savings and discounts are much more attractive loyalty program benefits than exclusive products or events.)

Finally, as for the “loyalty” induced by loyalty programs? More than 8 in 10 respondents to the Technology Advice survey said that they would be more likely to shop at stores with loyalty programs.

About the Data: The data is based on a survey of 3,162 loyalty program users across the US.


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