Mobile Driving Loyalty to Loyalty Programs

Mobile Driving Loyalty to Loyalty ProgramsEverybody loves a bargain or a reward. Now people struggling with the vagaries of the new economy really are becoming loyal to things like loyalty programs.

In a recent COLLOQUY census, U.S. consumers were revealed to hold 3.3 billion memberships in customer loyalty programs — an increase of 26 percent since the firm’s last census in 2013.

With mobile-based loyalty and rewards programs exploding in availability and acceptance, these numbers are poised to dramatically escalate throughout the remainder of the decade.

The report on the scope of U.S. customer rewards programs shows that “American households hold memberships in 29 loyalty programs spread among the retail, financial services, travel, and various other economic sectors, but are active in just 12 of them.”

An active member generally is defined as a consumer who either earns or redeems at least one loyalty reward per year.

“The 2015 Census shows that specialty store loyalty memberships now total 434 million, exceeding airline frequent flyer memberships (356 million) for the first time, placing second only to credit card reward programs, which account for 578 million memberships,” according to the report summary. “Specialty retailers, such as Best Buy and The Container Store concentrate on selling one line of goods to a particular clientele and offer narrow but deep selections in their niches.”

Other retail highlights from the research:

* Drugstore memberships rose 88 percent to 268 million, the highest rate of growth of any census category other than restaurant programs (107 percent).

* Grocery program memberships declined for the second consecutive census, with memberships dropping at twice the rate in 2015 (2 percent) compared with 2013 (1 percent)

* The rate of decline in fuel/convenience store programs slowed significantly to -3 percent in 2015 from -21 percent in 2013.

The above highlights make sense. For instance, while stores like Walgreens and CVS offer money-value coupons and hefty loyalty discounts, fuel/convenience stores often part with a penny only after a too high spending amount and exclude too many purchases from their programs.

“Think of the U.S. loyalty market in terms of a crowded party where half of the party-goers are standing in the corner without mingling,” says report author Jeff Berry. “Companies and brands that understand the key touchpoints in the relationship, pay attention to how best customers respond and optimize the overall experience can turn the party up so that people will join in the fun and never want to leave.”

 

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