What benefits do premium loyalty program members value?
Through a special arrangement, presented here for discussion is a summary of articles from MarketingCharts, which provides up-to-the-minute data and research to marketers.
Seventy-one percent of U.S. consumers belong to a traditional customer loyalty program, with four in 10 belonging to three or four of them. Despite their popularity, consumers aren’t satisfied with them. Indeed, 81 percent are considering upgrading to premium programs, per a survey from Clarus Commerce.
Even though 77 percent of Millennials and 78 percent of Gen X are already members of premium loyalty programs, the report contends that members of Gen Z are more likely than other age groups to be part of premium loyalty programs (70 percent) as opposed to traditional ones (63 percent). That said, Millennials are the most likely to upgrade, with 92 percent saying they are likely to invest in a retailer’s premium loyalty program if they already belong to that retailer’s traditional loyalty program.
Those interested in paying for premium loyalty memberships are most interested in groceries (58 percent), clothes and accessories (49 percent) and health and beauty (36 percent).
So, what are consumers looking for in a premium loyalty program? Sixty-four percent say free shipping. Alongside free shipping, 51 percent would be motivated to invest in or renew their premium loyalty program by faster shipping. Indeed, faster, free shipping is the top reason for joining Amazon Prime for three-quarters of respondents. It is also why more than half (58 percent) say they renew their membership.
Other top motivators for premium loyalty programs include instant discounts (53 percent), giveaways (47 percent) and surprise rewards (35 percent).
Bond’s 2020 Loyalty Report showed experience factors account for 76 percent of what drives loyalty program engagement. These factors included recognition and support (12 percent share), personal relevance (12 percent), ease and enjoyment (12 percent) and brand alignment (10 percent) among others. Programs offering personalized experiences were also shown to be experiencing 47 percent higher engagement, despite only one in four strongly agreeing they currently feel special and recognized by their loyalty programs.
- What Benefits Do Premium Loyalty Program Members Value? – MarketingCharts
- Meeting Rising Consumer Loyalty Expectations Post-Pandemic – Clarus Commerce
- Consumers Shown to Say, Stay and Spend More With Loyalty Programs – MarketingCharts
- The Loyalty Report 2020 – Bond Brand Loyalty
- How Have Consumers’ Expectations of Rewards Programs Changed Since COVID-19? – MarketingCharts
DISCUSSION QUESTIONS: What incentives should marketers use in their efforts to upgrade consumers to premium loyalty programs? What typical premium perks are the biggest margin killers for retailers that can and should be downplayed?