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colloquy-loyalty-program-participation-rates-dec11.gif74% of US consumers now participate in rewards programs, representing a 9% increase from 68% in 2009 and a 30% increase from 57% in 2007, according to [download page] a December 2011 report from Colloquy. Data from the “The Rules of Engagement: Loyalty in the US and Canada” indicates that growth in the US population’s participation is largely due to seniors’ increased involvement in loyalty programs: this year 81% of US consumers aged over 60 reported participating in rewards programs, up from 61% in 2009 and 54% in 2007. However, even though program signups are growing, consumers appear unsatisfied with their experiences: just 12% of US consumers strongly agree that it pays to be loyal to their favorite brands, while only 17% say loyalty programs are very influential in their purchasing decisions.

Overall Engagement Declines

This year, one-third of US respondents say they are extremely active logging into websites to get information about their rewards programs, down 25% from 44% of respondents in 2009. Engagement through other, newer channels, is also down: just 9% of US consumers are very active swapping program information via social networking sites, while only 8% are very active reading or responding to reward program offers received via cell phone or text messaging. In 2009, 18% of US respondents reported being very active in those channels.

Communications Seen Less Relevant

Overall, 31% of Americans find rewards program communications to be extremely relevant to them, a marginal decrease from 32% in 2009. The perceived relevance has declined most markedly among consumers with household income of at least $125k, falling 30% from 40% in 2009 to just 28% in 2011. Similarly, the proportion of consumers aged 18-25 who feel that their loyalty program communications are extremely relevant has dropped 38% in the past 2 years, from 36% in 2009 to 26% this year.

Big Picture May Be to Blame

According to Colloquy, the economic outlook may have translated to an obsession with discounts at the expense of brand loyalty. Indeed, according to October analysis from comScore, consumers are increasingly switching brands when another “peer” brand is on sale, with 38% of consumers in 2011 saying they did this compared to 33% in 2008. Consumers’ loss of spending power also appears to be leading them more frequently to cheaper products: about 19% of consumers switched to Private Label in 2011, up from 14% in 2008.

According to the Colloquy study, only 17% of US respondents strongly agree that they are confident that their or their families’ economic prospects will improve over the next 10 years. Consumers also show a preference for bargain hunting and avoiding credit purchases they cannot afford. Youth appear to be significantly more conservative in their attitudes toward money and spending: 45% of the US youth surveyed view money as a tool for achieving their goals and dreams, compared to the general population average of 67%. Additionally, one-quarter of US youth say that money is better saved than spent, compared to 12% of seniors. Colloquy insight suggests that marketers wanting to each younger consumers must design programs that provide discounts, but also aspirational benefits relevant to the group’s dreams.

About the Data: The 2011 Colloquy Cross-Cultural Loyalty Study was fielded via an online survey during July 2011. 1100 responses were collected in the US, including from 127 youth, 262 seniors, and 104 affluent respondents.

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