Want to get more customers to join your company’s loyalty program? Finding out what types of loyalty rewards motivate them could help. A recent report from TechnologyAdvice has some insights.
Clearly, consumers like loyalty programs—about 57 percent of them belong to at least one, the study says. And the programs are doing their job at building loyalty—a shopping 82 percent of respondents say they are “more likely” or “much more likely” to shop at stores with loyalty programs.
So what motivates customers to join loyalty programs? Saving money is the number-one reason, cited by about 58 percent of respondents. (Think of grocery store loyalty cards as the best example of this type of program.)
The second biggest motivator for joining loyalty programs is to earn benefits, such as points that can later be redeemed for rewards. Thirty-eight percent of consumers say this is their top reason for joining a loyalty program. Starbucks is one example of a company that uses this approach, which can make sense for businesses for which discounting products isn’t desired or viable.
What don’t customers care about? Social rewards, such as being named the “mayor” of a business, are not motivating for the vast majority of consumers. Fewer than 1 percent say this type of reward is the top reason they join loyalty programs, and only about 16 percent say these rewards make them more likely to engage with the programs.
VIP status is much more of a motivator. Although it’s still far behind points or discounts, cited as the top motivator for only 4 percent of consumers, 57 percent do say they’re more likely or much more likely to join a loyalty program that offers VIP perks.
Now that you know consumers like loyalty programs, should yours be card-based or digital? The study found the majority of consumers aren’t yet ready for digital-only loyalty programs. About 39 percent prefer card-based programs, about 36 percent prefer digital-only programs and about 30 percent didn’t have a preference. Overall, the survey concludes, people still like the convenience of having both a digital app and a physical card option.
That said, having a digital smartphone loyalty app can’t hurt your business, and could help (especially as more consumers adapt mobile devices for shopping use). About six in 10 respondents say they would be more likely to join a loyalty program if it had a smartphone app.
How can you get more customers to join?
- If you already have a card-based loyalty program, consider expanding to a digital loyalty app to reach more customers.
- If you’re just implementing a loyalty program, investigate vendors that offer a hybrid system of physical cards plus a digital network.
- Before launching a digital-only program, carefully assess your customers’ interest via polls and surveys. While digital-only programs are likely the wave of the future, the future isn’t here just yet.
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