According to a recent study by COLLOQUY, instead of fostering loyalty, the traditional three-tier loyalty structure is creating confusion, particularly with lower-tier members.
The report, Fears for Tiers: 2014 COLLOQUY Study on Membership Status In Loyalty Programs, was based on a survey of 3,077 U.S. and Canadian consumers.
Included in the findings are that almost one-third of consumers do not know which tier they belong to in the loyalty program they use most. Of those who do, 42 percent never make it out of the lowest tier.
Moreover, 80 percent of those members in the bottom tiers are discouraged by the requirements needed to achieve top-tier status. One-third of lower-tier members do not think they are properly acknowledged, even though they participate in their programs often. Overall, only half of respondents said they increased spending or changed purchasing behavior to achieve a higher tier status.
"The traditional tiered rewards system is an outdated solution to the ongoing challenge of maintaining customer engagement," the report states.
Among the recommendations:
Which of the recommendations mentioned in the article to improve tiered loyalty programs will provide the biggest benefit?