What Experts Are Saying About Loyalty Reward Programs: A Trilogy {Part 1}

In a recent report by Forrester Research, analyst Emily Collins re-examines the “State of Loyalty” for the first half of 2013.  She surveyed executives from 50 member companies of Loyalty360, a loyalty marketing association. We found a plethora of great information in this report so to make it a little more digestible for our readers, we will examine her findings in this trilogy.

The first, and most shocking statistic we found was that on average only 45% of customers sign up for the loyalty programs and only 35% of those people actually redeemed the rewards. If you are not that savvy with multiplying percentages in your head: this translates to 16% of customers actually redeeming their rewards. Here is a visual to help you understand that number a little better ~

loyalty 3

But hey, lots of us who carry physical rewards cards often forget what rewards we’ve earned (unless you have a CC account on your phone). So as customers, this number is not very surprising. In fact, most customers say that simply having a loyalty card is not enough to keep them coming back through your doors.

We imagine that the population most disgrunteld about this statistic is business owners. Our reasoning comes from the fact that 70% of the executives surveyed in the “State of Loyalty” listed “Customer Retention” as the main objective of their loyalty program. But clearly, the majority of loyalty holders are not following suit.

So knowing that only 16% of customers on average are actually taking advantage of the loyalty program benefits, it’s no surprise that business owners are seeking new strategies to keep their customers. And that strategy is: ENGAGEMENT

Loyalty is on the cusp of an evolution…There is a shift in focus from the idea that loyalty is all about transactions and discounts. In the future it needs to be more about customer engagement and emotion.

-Emily Collins, Customer Loyalty Specialist

Come back October 17th, 2013 for What Experts Are Saying About Loyalty Reward Programs: A Trilogy {Part 2}!

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