As internet users and consumers shift more and more into the online and ecommerce space, the majority are becoming members of loyalty programs. According to recent study conducted by Urban Airship, 92% of online consumers in the United States and the United Kingdom belong to at least one loyalty program, while 19% belong to at least six. What makes these numbers so impressive? The answer is easy: rewards.
In a report released earlier this month, digital marketing specialist eMarketer extolled the virtues of loyalty programs and uncovered why they’re so popular. The extensive report concluded that, regardless of age group, most internet users choose to become members of these programs simply because they are offered more frequent and better discounts and/or because they can earn points to eventually redeem rewards. Other reasons why users join loyalty programs include the belief that they receive better service and they desire a closer relationship with a specific brand. Whatever the reason, it’s clear that loyalty rewards programs are an effective marketing tool and definitely help by not only retaining business but growing it as well.
Loyalty and rewards programs are a great way to increase a brand’s visibility and eventually increase sales, but how do users prefer to receive their loyalty program updates? eMarketer’s report found that 48% of users preferred the use of SMS (text) messages, while 22% preferred email, and 20% preferred app notifications. Only 8% of internet users preferred to receive updates and news via standard/direct mail. It’s clear that not only is digital the way to go when contacting users, but, additionally, quicker is generally better.
A business can only maintain its loyalty program as long as it has clients that are willing to subscribe to it. While it may be a no-brainer to implement a loyalty or incentive program, the hardest part is figuring out how to keep users happy.
“Two-thirds of loyalty programs are abandoned by consumers within the first year because the value isn’t there,” said Mark Taylor, Senior Vice President of Digital Customer Experience at Capgemini. Taylor also noted that, “consumers look for a seamless experience with brands more than they look for future discounts.”
Simply put, they aren’t willing to trade today’s experience for tomorrow’s discount. Interestingly enough, while loyalty is massively important, loyalty programs are actually becoming less relevant. The key to remaining relevant is to keep rewards current and valuable while catering to user needs. Brands today should focus on ensuring that the experience is not only simple and pleasurable, but that service is extended beyond simple discounts.
National Merchants Association’s Loyalty Program
National Merchants Association is an advocacy group for small and medium-sized businesses that works on their behalf to eliminate the unnecessary and unreasonable costs associated with accepting credit cards and is proud to offer a membership plan tailored to individual business needs. Contact us today to learn more about how we can help your business.