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Loyalty programs can be an effective way for marketers to keep consumers engaged and drive brand loyalty, but if they are not easy to understand—and, more importantly, if they do not offer relevant rewards—then users will simply abandon them, according to August 2015 research.
Loyalty marketing research and education practice Colloquy surveyed US internet users ages 18 and older who were loyalty program members. More than half of respondents who had joined a program in the past 12 months did so because they were able to earn points or miles on their purchase. Nearly as many had received a product or service offer.
Once users joined a loyalty program, the majority (81%) continued to participate because it was easy to understand. Almost the same percentage (75%) stayed because the rewards and offers were relevant to them.
Rewards are a motivator for loyalty program users. In fact, more than half of respondents left a loyalty program because it did not provide rewards or offers that interested them, or because it was too hard to earn points for rewards.
Retaining loyalty program members requires different tactics for different audiences, however. Colloquy reported significant differences in what was important to millennials vs. other age groups, for example. Millennials tended to respond well to status-oriented and other nonmonetary loyalty rewards, like having access to member-exclusive products and content. The survey base as a whole was more concerned with the basics of saving money.
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