Building customer advocacy is the goal of every customer loyalty program, but many programs aren’t connecting with customers as effectively as they could. Each year we see brands invest in new customer loyalty solutions (or work on revamping existing programs), but they can’t pinpoint what works well, what could be improved and why.
To better understand how customers experience these loyalty programs and redefine what makes a successful program, we commissioned a study of 5,000+ loyalty program participants across 50 top brands in nine industries.
Understanding the current state of customer loyalty
Top brands know how important customer loyalty is to driving market share, and it’s not the first time that customer loyalty programs have been the topic of discussion. But most past discussions have focused on brand-level results. Customer opinion was mostly anecdotal. Because we believe in customer-centric solutions, we wanted to hear more from the customers themselves.
Related: How the best customer loyalty programs adapt to meet market shifts
Not only did we invite a large sample of 5,000+ loyalty program participants to share their thoughts, but we also looked at programs across nine key industries (auto, telecom, lodging, gas, gaming, financial, quick-service restaurants (QSR), grocery and retail) to make sure the results covered the breadth of loyalty experiences.
Our study explored the following:
- What makes a customer loyalty program successful?
- What elements of loyalty programs do customers find effective? Why or why not?
- How does industry type affect what works in a loyalty program?
- Where are the opportunities?
Across all industries, the results confirmed some of our assumptions about current programs and what’s working. They also provided insights into some of the challenges we’ve seen with customer retention, such as driving visits and increasing spending. Here’s a summary of some of our top findings.
5 key findings from the new customer loyalty program research
1. Loyalty programs do work
Through the study, we learned that the best loyalty programs build brand advocates who are six times more likely to visit, spend six times more with the brand than others and give six times more wallet share.
2. Customers want value and ease
While there are many components that go into a loyalty program, the most important metric is perceived value compared to the effort it takes to join. This is true across all nine industries in the study.
3. Value matters more than ease
It matters three times more, to be exact. While making it easy to participate in a program is essential, customers won’t engage if they feel the program’s value isn’t good enough. And, according to participants, all 50 brands have opportunities to deliver higher value.
4. Brand detractors can be made into brand advocates
In the study, less than 35% of customers identified brand advocates. However, the responses of brand detractors provided key insights into how improving loyalty program benefits would improve their perceptions of the brand. All brands have room to improve, but there is a path forward for customer retention.
5. The more personalized the experience, the better
Perceived value changes greatly based on audience segment. Adding personalization and breakthrough touchpoints to your customer loyalty strategy will help customers build strong emotional connections to your brand.
Related: How to improve your customer engagement program with breakthrough touchpoints
Improving your customer loyalty program with an end-to-end partner
It can take a lot to reach brand detractors and turn them into loyal brand advocates, but it’s worth the effort for brands that can do so effectively. As an end-to-end customer loyalty program provider, we’ve broken down the formula to create a program that drives results at every stage of the customer journey. We’d be happy to chat about how to improve your program so it joins the best customer loyalty programs from our study.
Download our ebook to explore the findings in more depth and learn the next steps toward elevating your loyalty program experience.