Are Consumers Paying Attention to Loyalty Rewards That Offer Direct Value?
- Posted on July 26, 2023 by Robert
- Reading time about 5 minutes
Loyalty programs are no longer an option for brands, but it is becoming an essential part of every business to win customers ‘hearts. However, with rising competition, it is crucial to build customized loyalty programs aligned with your brand values and offer personalized experiences with relevant reward offerings.
Gaining a competitive edge can be difficult when every brand is offering a loyalty program leaving customers with more options than ever. In this blog, we will learn how you can create a winning Customer Loyalty Software Solution that is unique and offers direct value to customers.
What Customers Are Looking Forward To?
Today, customers are always in a rush with hectic life schedules and have no time, which is why they take time to analyze whether the loyalty rewards program brand is offering is worth the time to join and participate. This means they are paying more attention to what direct value the loyalty programs will provide them. Gen Z consumers believe that they deserve something valuable with “perks” such as a more customized experience or unique offers in equal exchange for sharing their private data with a brand.
If we talk about the success behind leading loyalty rewards programs such as Adidas’ AdiClub, Delta Airlines’ SkyMiles, AMC Theatres’ AMC Stubs, GNC Nutrition’s myGNC Rewards, Starbucks Rewards and many more, one of the core themes that evolved was flexibility. This means customers value their ability to choose how they spend or use their points or rewards- where they want when they want, and how frequently they can spend.
Flexibility – Number 1 Priority
In a recent event, the EVP of Global Loyalty at Mastercard, Stephanie Meltzer-Paul mentioned that customers look forward to flexibility in how they can use the points, or they are given cashback and believed that flexibility is something we talk to our customers about always.
Additionally, she also says the average customer are members of around 17 loyalty programs with eight of which they are active in. Gone are the days when customers just blindly register on Bank Loyalty Programs for free perks. Loyalty customers are more sophisticated now, which is why brands must run the math on a program’s value, as stated by the EVP of Global Loyalty. Today, customers evaluate everything and ask- whether the program is worthwhile to join. The secret is flexibility. More than 40% of respondents in the 2022 PWC study state that loyalty rewards programs with more flexibility in rewards are one of the most important aspects of delivering the brand’s personalized experience.
Program Value – Number 2 Priority
After flexibility, the next thing that must be kept on focus while building a loyalty program for your brand is program value. As stated by Meltzer-Paul in the event- “The value of the program is still an important factor. Flexibility and redemption are all good, but customers will only stay with you for a long time if they see the value of the rewards worth the wait.
In another talk with Michael Stevens, MarTech Practice Lead of Retail & Consumer Goods at SAS (a data software offering consumer insights) states that SAS partners with several professional leagues and teams that showcase the importance of flexibility in loyalty programs for sports fans.
He also added that- Big leagues like NBA & NHL have many games and their main focus is to understand customers better. Many players couldn’t attend all NHL games in a season but if they are being offered more flexibility, they are more likely to jump into that. In this context, flexibility means using season tickets for ticket exchanges and seat upgrades.
The winning brands are the ones that have good loyalty programs and where a higher number of consumers are catching on. Meltzer-Paul also mentioned that- More and more people are joining loyalty programs as they believed it is the quickest way to get value, especially with inflation, programs are a great help to offset that.
What Does This Mean for Businesses Looking for Loyalty Programs?
Loyalty programs are going to stay today & over the years to come, which is a great thing for businesses who are planning to build theirs. Research in 2021 McKinsey & Co study stated that customers who are members of loyalty programs are 64% more likely to purchase from that company repeatedly and 50% more likely to recommend it to a friend, plus 31% will pay more to shop with that brand.
Living in a world of customers that demands affordable and exceptional experiences, brands must integrate more experiences as reward offerings in their loyalty programs. Research by the Mastercard Economics Institute says that spending on experiences in the U.S. was 35% more as compared to spending on things, which was just up by 16% in May 2023 as compared to the stats conducted in 2019.
The demand for real-world experiences rather than discounts or rewards is on top priority today, especially after the COVID era. Millennial consumers now value experiences over things and everyone wants to get out with records of more people buying tickets for events – from live concerts and sporting events to theatre and comedy shows.
Undoubtedly, the demand for loyalty programs that offer great value and flexibility is the need of the hour for customers that have multiple options when it comes to loyalty programs offering competitive rewards. Building a mere loyalty program is not enough to win customers’ hearts in the age of distraction.
Your program must be built keeping your target audience’s needs in mind where you can offer relevant reward offerings giving flexibility to earn and redeem anytime for anything. If you are planning to build a dedicated loyalty rewards solution or MasterCard Rewards Program, Novus is the right choice for you. Aligned with technological innovations, we enable brands to build customized smart solutions that can meet every customer’s loyalty needs irrespective of the industry type.