Loyalty programs are great data farming and engagement tools for marketers but they are under threat as Australian consumers have “loyalty fatigue”, a new study has found.
Too much information, irrelevant offers, perceived lack of value and too many pesky loyalty cards weighing down wallets/purses are turning Australians off.
“Consumers are becoming fatigued by loyalty programs and are not afraid to cut ties with brands who do not offer long-term value,” David Chinn, general manager of consumer insights and targeting of Experian Marketing Services, said in the study.
“Not only are one in five disappointed by the benefits of programs they are a part of, but one third have taken the next step to either opt out of a program or consider opting out after receiving too much information or found no benefits to being a member.
“The disconnect between what a brand is doing and what a program member expects is amplified when we learn that almost four in ten consumers feel that brands are sending irrelevant offers to them and nearly half believe that most loyalty programs are a waste of time. It shows that marketers are finding it challenging to turn data into effective insights to inform their loyalty program.”
Seventy-three per cent of those surveyed believed the quality of programs are improving but that has not stopped 31% leaving programs because of irrelevant offers.
Personalising communication is key, as 55% of the 1,000 adult Australians surveyed said they do not open brand communication unless it is personalised.
Eighty per cent said discount-free loyalty programs are not worth signing up for but Australian’s like more than just initial discounts. According to the ‘Attractive Loyalty – Keeping the brand loyalist’ study 38% join to work towards long-term rewards and benefits.
However 30% do still join for immediate benefits.
To balance the two drivers the study suggests developing value-based loyalty instead of short-term discount-based ones.
“Marketers need to find the balance between short-term benefits that may encourage customers to join and expand the member base, and long-term benefits that develop and cultivate the customer relationship. The research shows marketers can still improve the way current loyalty program benefits match customer needs, with two in three customers dissatisfied with current benefits.”