A new international research study by Valuedynamx, a Collinson company and the world’s leading provider of curated, data-driven shopping rewards, found that personalized, simple, rewarding and frequent loyalty program reward earning and redemption opportunities strongly align with consumer expectations.
These offerings also significantly increase satisfaction and more frequent customer interactions by providing better perceived value for shoppers' time and money.
“Based on our research, forward-thinking brands must obsess over ensuring their loyalty program members are getting equal or greater value than they are investing,” said James Berry, CEO of Valuedynamx. “To optimize this value exchange, brands must understand their members on a deeper, more personal level so they feel appreciated and loved. This means offering ease of use, helpful recommendations, and most importantly, reward options that resonate and drive feelings of gratification. With satisfaction comes engagement and an increase in the rate at which consumers earn and spend their rewards. This continuous “earn and spend” cycle directly correlates to more frequent touchpoints that can drive increased revenue potential and loyalty program success for businesses.”
Valuedynamx’s Power of Satisfaction research, which surveyed more than 5,500 consumers enrolled in loyalty programs, uncovered the following key takeaways about what drives consumer satisfaction, engagement, and value in modern loyalty programs.
Simplicity and satisfaction drive customer loyalty and engagement
There is a direct correlation between customer satisfaction and the rate at which loyalty program members engage with the program by redeeming/spending (“burning”) and earning rewards (“earning”). Programs that show a high spending rate often find that this equates to a higher earning rate and happier members, likely thanks to more personalized reward and redemption options. In fact, consumers are willing to accept (and remain satisfied with) slightly lower monetary rewards if they are better tailored to their preferences for airlines, hotels, banks, and retailers.
With consumers juggling more apps, platforms and digital services than ever before, it should come as no surprise that the number one feature of a desirable and satisfying loyalty program is a simple redemption process. This simplicity extends to ease of use and cost savings, with branded redemption options, savings, and easy balance tracking and eligibility for rewards being the next most desirable program features.
Overall, the study found abundant opportunities for brands to make customers feel like their spend is worth it, leading to higher customer satisfaction in key areas such as redemption value, cost savings and product offerings. Consumers surveyed often highlighted disappointment and dissatisfaction with the reward/savings value of discounts, disproportionate savings relative to their spend, and dissatisfaction with limited selections in a brand’s product range.
Consumers want choice but lack it
Brands have a huge opportunity to improve their loyalty programs and delight their customers by expanding reward redemption options. Evidence of this is that approximately two-thirds of loyalty program members are not completely satisfied with the reward redemption options available. That same number of respondents actively seek to earn loyalty dollars when rewards align with their individual preferences (such as the option to redeem for experiences and prizes from a variety of their favorite brands).
While the most popular types of loyalty currency are cash back and gift cards, the vast majority (90%) of program members want the flexibility to redeem loyalty points with multiple brands. Despite this overwhelming demand, many loyalty programs still limit redemption options to their own brand, while fewer programs offer rewards and discounts across multiple brands. Additionally, nearly half of loyalty program members want experiential reward options, but only 25% currently have access to them.
Brands looking to increase their “earn and spend” rate can turn to program features most associated with complete satisfaction, such as the ability to redeem for memorable experiences, options to redeem with other brands, brand options that resonate with their interests, personalized reward options, and reward recommendations based on past purchases.
There is strong consumer demand for value and personalized rewards
Redemption events are not self-sufficient in generating future earnings. Instead, the study found that loyalty program satisfaction stems from a positive redemption event that creates joy when consumers feel that the time and effort they have invested in a loyalty program has been sufficiently rewarded (referred to as “redemption joy”). This joy can be nurtured when programs go out of their way to create it, particularly through personalized rewards.
Approximately 30% of respondents expressed a preference for rewards based on their past purchases and when asked to rank which loyalty program features increased their redemption satisfaction, helpful recommendations for redeeming rewards ranked first, closely followed by the ability to redeem high-value rewards and receive unique and interesting reward options.
Customers want rewards that reflect their individual tastes and past interactions with brands, and the introduction of artificial intelligence (AI) to find rewards that best fit customers’ interests will boost the joy of redeeming them. The research even found that around two-thirds of respondents who see clear value in loyalty program participation would be willing to share personalized data to better inform personalization strategy. This data sharing is becoming a cornerstone of modern loyalty programs and provides brands with a deeper understanding of customer preferences and behaviors to create rewards and experiences that resonate on an individual level.
“The results of this research represent an important opportunity for loyalty programs to reevaluate and improve their offerings, particularly by integrating personalized and experiential rewards that resonate with consumer preferences,” Berry added. “It is not enough to simply drive reward redemption, as unsatisfying or uninspiring rewards do not actively drive richer and more frequent interactions. Instead, complementary, personalized “earn and spend” behavior is more likely to drive ongoing loyalty program satisfaction. By taking advantage of the opportunities identified by this research, loyalty programs can better meet the needs of their members and drive greater customer engagement over the long term.”
Fuente: Valuedynamx.