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Points big lure, but not the only factor in loyalty schemes

Tuesday November 25, 2014 at 7:53pm
Cost savings outweigh convenience and special extras when it comes to driving membership and continued participation in UK loyalty schemes. But while saving cash is a key factor, it is not the only one, with ease of use of a loyalty scheme, nearness of a physical outlet and even the pull of branding all contributing to the long-term pull of a programme. New research by customer analysis and data marketing specialist GI Insight shows that consumers are most excited about earning redeemable points when it comes to loyalty programmes. Almost three-quarters (74%) say this is what attracts them, with nearly two-thirds (60%) admitting vouchers or coupons providing a percentage or cash value discount are a primary driver for joining and staying active in schemes. Just over half (54%) say access to special offers is a factor. In the report, The Lure of Loyalty, significant numbers of consumers also said that convenience is an important motivating factor, with 24% pointing to a simple sign-up process as an inducement, 21% noting the appeal of an easy-to-get-to location and 19% citing the fact they buy from a brand frequently as a draw. But the availability of a mobile app as a way to access a loyalty scheme fails to excite consumers, with only 6% saying it keeps them loyal to a loyalty scheme. Additional benefits such as free drinks and snacks, special deals linked to personal events and exclusive access to new products and select offers have less impact than cost savings; but a significant minority does see these as compelling features of a scheme, with 17% seeing the free treats as a real plus and 12% listing the other perks as an enticement. There are a few notable differences when it comes to men and women. Female respondents are more drawn than male consumers by redeemable loyalty points (78% versus 70%) and by the offer of free treats such as coffee or cake (19% versus 15%), while men are more enthused by the availability of a mobile app (8% versus 4%). Older consumers place a greater emphasis on convenience than their younger counterparts, with more respondents in the higher age groups seeing store or business location and existing customer relationship as influential factors: 34% of over-65s and 23% of 55-64-year-olds say they gravitate toward the loyalty schemes of stores and businesses that are easy to get to, while only 14% of 24-34-year-olds and 15% of 35-44s say this is a deciding factor; 29% of the over-65s and 21% of the 55-64s say shopping regularly with a brand is good reason to join a scheme, versus 12% of 25-34-year-olds and 15% of 18-24s. On the other hand, the research shows younger consumers are noticeably more excited by mobile app access to a scheme, as 10% of 18-24-year-olds and 14% of 25-34-year-olds list this as compelling reason to participate in a loyalty programme, compared to just 1% of over-65s and 2% of 55-64-year-olds. Andy Wood, managing director of GI Insights, comments: “With consumers becoming more demanding about what they expect from the companies they deal with, the opportunity for organisations that run loyalty programmes to increase both membership volumes and participation are there. This can only be achieved, however, by understanding the key motivators for loyalty scheme participation and using the customer data captured to ensure that these elements are managed and executed in a way that suits the customer base. With all the right elements of a loyalty scheme in place, a company has the perfect platform for encouraging customers to remain loyal, spend more, buy frequently and generally expand their relationship with the business – which in turn will drive greater profitability.”
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