New research from global performance marketing agency Merkle has found that brand loyalty programs can be far more effective than once thought. However, they only work when brands are also able to deliver a consistently positive customer experience.
Merkle’s 2022 Loyalty Barometer Report involved a survey of over 1,500 US consumers aged 18 to 65, to understand their thoughts and feelings about brand loyalty. Specifically, whether loyalty programs actually work – and what other factors contribute to customer loyalty.
1: Consumer engagement with loyalty programs is high
If your brand is considering whether or not to continue with a loyalty program, consider these statistics. 78% of consumers belong to a paid loyalty program, and 67% belong to between one and five different programs. Approximately 90% either earned or redeemed an award over the last 6 months. The brands with the highest engagement were Amazon, Apple and Nike.
So, it’s clear that brand loyalty programs are consistently popular with customers – as long as you can get the offer right.
2: Customers care more about great products than discounts
Merkle’s researchers asked consumers what is most likely to make them feel loyal to a brand. A total of 60% said a great product, while only 22% named a loyalty program. A further 50% said they were more likely to try out a loyalty program because of a brand’s values.
The report explains:
“Our Human Loyalty® philosophy is based on the idea that brand loyalty starts by meeting trust-building, rational needs. Once trust is established, a door opens for brands to create emotional connection and meaning, which leads to enduring brand loyalty. Consumers reflected this perspective by indicating a great product is, by far, the top reason they feel loyal to a brand.”
3: A consistent customer experience is essential for building loyalty
Coming through loud and clear from the 2022 Loyalty Barometer Report was this message – a consistent customer experience is an essential ingredient in the success of loyalty programs. You can’t have one without the other, and together these strategies boost loyalty and drive sales.
73% of millennials in the Merkle survey said that positive customer experience is the main reason they would continue to do business with their favourite brand.
3: Brands should ditch unsophisticated personalisation strategies
The last key takeaway from the report relates to personalisation, a strategy that marketers have been hitting pretty hard over the last few years. According to Merkle, there’s still a gulf between customer expectations on personalisation and what brands are actually delivering.
And personalisation efforts aren’t always paying off. The findings show that personalisation has a smaller impact on buying decisions compared to customer service and loyalty programs. In fact, nearly 60% of consumers said that it has no impact on their likelihood of continuing to use a particular brand.
So, unless you’ve nailed it – Merkle advises ditching clumsy personalisation activities and focusing your resources elsewhere.
For expert marketing support, work with our specialists here at Nextgen Marketing – email hello@nextgen-marketing.co.uk or call 020 8064 0221 to find out more.
