A new study by Maritz Motivation Solutions dispels some of the assumptions that many retailers held about consumer loyalty programs. With data gathered from surveying 2,000 consumers, Maritz was able to disprove four myths retailers have about their consumers and loyalty programs.
- Myth #1: Consumers don’t want to pay to join loyalty programs. The survey found that 52 percent of respondents would not be willing to pay to join a loyalty program, but the remaining 48 percent would be willing. The fee paid for annual membership can offset the costs of running the loyalty program.
- Myth #2. Convincing customers to join a loyalty program is the same as engaging them. Program enrollment is only a minimal level of commitment. The best time to capture member engagement is within the first six months of membership through aggressive communication and by making rewards attainable.
- Myth #3. Members of loyalty programs are concerned with redemption only. Data from the survey shows that this is not necessarily a correct assumption. It’s recommended that retailers balance reward messages with opportunities to earn points. Loyalty members also appreciate tools that allow them to track their earnings progress.
- Myth #4. Members of loyalty programs remain loyal. All retailers should be remember that all members are at constant risk of changing their loyalty. To retain high-value members, planning surprise rewards can be a good strategy.
The survey found that 43 percent of consumers join a loyalty program because they want to earn rewards. Sixty percent of consumers feel that the reason why companies maintain loyalty programs is to entice them to buy more from them. Consumers don’t fully realize that companies actually want a relationship with them. This study suggests that companies have an opportunity to engage more in the relationship side of loyalty with their program members.