Corporate Eye

Research Shows How Retail Brand Loyalty Programs Are Failing with Consumers

Retail brand loyalty programs are created to accomplish a primary goal — to encourage repeat purchases that evolve into brand loyalty. Unfortunately, research from ACI Worldwide reports that retail brand loyalty programs have a long way to go before they reach that goal.

According to the research survey, 62% of U.S. consumers join retail brand loyalty programs to get discounts but only 36% have received a reward or promotion from the program that actually made them come back to the retailer’s store again. One reason might be the fact that, according to the survey results, 81% of retail brand loyalty program members don’t understand the benefits they’re supposed to get from the program or how the program works at all.

Following are some highlights from the survey results reported by ACI Worldwide this week:

  • 3 out of 4 American consumers are members of at least one retail brand loyalty program.
  • 1 out of 4 U.S. retail brand loyalty program members have received a reward or promotion for something they didn’t want and wouldn’t buy.
  • 1 out of 5 U.S. retail brand loyalty program members have received a reward that was too small to take seriously.
  • 3 out of 4 U.S. retail brand loyalty program members have never received a reward or promotion that made them feel like a valued customer.
  • Nearly 9 out of 10 U.S. retail brand loyalty program members signed up and never heard from the program again.
  • Nearly 1 out of 2 U.S. retail brand loyalty program members have had a negative experience from a loyalty program.

For your brand’s loyalty program to be successful and actually turn customers into brand loyalists, you need to offer a program that’s simple and easy to understand with clear benefits that are specifically targeted to members. The statistics above demonstrate many of the biggest mistakes that companies make when developing loyalty programs. A loyalty program should make consumers proud to be a customer, not annoyed. If members don’t understand how to access rewards and if rewards are useless to them, then your loyalty program is likely to do more harm than good.

In other words, your brand loyalty program needs to sound good so consumers will join, but it also needs to deliver on consumer expectations based on the messaging that convinced them to join. Don’t make them regret joining. Instead, make sure they’re thrilled with your brand loyalty program so they come back again and again — and tell all their friends!

Image: stock.xchng

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Susan Gunelius is the author of 10 marketing, social media, branding, copywriting, and technology books, and she is President & CEO of KeySplash Creative, Inc., a marketing communications company. She also owns Women on Business, an award-wining blog for business women. She is a featured columnist for Entrepreneur.com and Forbes.com, and her marketing-related articles have appeared on websites such as MSNBC.com, BusinessWeek.com, TodayShow.com, and more. She has over 20 years of experience in the marketing field having spent the first decade of her career directing marketing programs for some of the largest companies in the world, including divisions of AT&T and HSBC. Today, her clients include large and small companies around the world and household brands like Citigroup, Cox Communications, Intuit, and more. Susan is frequently interviewed about marketing and branding by television, radio, print, and online media organizations, and she speaks about these topics at events around the world. You can connect with her on Twitter, Facebook, LinkedIn, or Google+.
 
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