Loyalty Programs Must Offer More Than Discounts to Keep Customers

Consumers seek substantial value from loyalty programs, with 85% wanting better discounts and 4 in 5 interested in surprise earning opportunities. Companies should focus on simplicity and effective value, rather than just offering monetary rewards. A variety of rewards, including experiential benefits, can help a program stand out, especially among loyal customers.

Consumers are increasingly seeking substantial value from loyalty programs, according to a recent survey by Kobie. The study, which polled 5,000 global participants, found that 85% of consumers want better discounts, and 80% are interested in surprise earning opportunities [1]. This shift in consumer preferences is prompting retailers to rethink their loyalty strategies.

The ability to track earnings is also crucial, particularly for fee-based loyalty programs. Two-thirds of respondents said they immediately appreciate the value of these programs when they see how much they've saved in a year. This highlights the importance of transparency and clear communication in loyalty programs [1].

Not only do consumers want different rewards, but their approach to redeeming them varies as well. About half of consumers are "savers," who earn points with a specific reward in mind, while one-third are "collectors" who earn points without a specific goal. Just one in five are "spenders" who redeem points as soon as they are eligible for a reward [1].

While monetary rewards are popular, loyalty programs can also benefit from offering a variety of rewards that go above and beyond transactional value. Experiential benefits and prizes can help a program stand out, particularly among a brand’s most loyal customers. For instance, Butcher Box's Sizzle Society program offers experiential benefits like priority customer support and virtual Q&As with the company founder, in addition to 2% back on each purchase [1].

Companies should also focus on simplicity and effective value. Jerid Grandinetti, VP of marketing and culinary at Baskin-Robbins, emphasizes that customers need to feel they are getting a deal and that rewards are flexible and easy to earn. The company redesigned its Baskin-Robbins Rewards program to reflect these principles [2].

Platypus Shoes has also introduced a loyalty program, 'Kicks Club,' targeting Gen Z consumers. The program, in partnership with Live Nation, offers exclusive perks and early access to product launches and events. This approach aligns with Gen Z's passion for live music and community experiences [3].

In conclusion, the evolving consumer demand for loyalty programs is pushing retailers to innovate and offer more substantial value. By focusing on simplicity, effective value, and a variety of rewards, companies can better meet consumer expectations and foster long-term loyalty.

References:
[1] https://www.grocerydive.com/news/value-discounts-loyalty-programs-kobie/753432/
[2] https://www.customerexperiencedive.com/news/value-discounts-loyalty-programs-kobie/753395/
[3] https://mumbrella.com.au/platypus-shoes-sets-up-kicks-club-loyalty-program-for-gen-z-live-nation-partners-for-launch-881759