Loyalty programs not keeping Aussie shoppers faithful

A new study has found that 88% of consumers over the age 16 belong to a loyalty program  of some kind and that Coles Flybuys came out on top when respondents were asked who was doing a ‘doing a particularly good job’. However less than half feel more loyal to the brand despite being a member of their program.

The results come from a new report called For love or money? 2013 consumer study into Australian loyalty programs, commissioned by strategic marketing company Directivity and digital agency Citrus and conducted by First Point Research and Consulting, and has found that although loyalty programs influence buying behaviour, they don’t equal customer loyalty.

An online panel of more than 1,000 consumers of men and women aged 16 and over were surveyed in February this year about their loyalty program habits. Men were found to be members of fewer programs than women (on average three compared to five), but they’re more active with their memberships, with 49% presenting their card upon purchase compared to 41% of women.

Points-based programs where members can redeem points for vouchers, products or other rewards were the second most popular benefit.

Adam Posner, CEO of Directivity says, “Basic monetary rewards give brands a ‘ticket to play’ in the loyalty game but the real opportunity lies in building deeper engagement with members through more personally relevant, unexpected and emotional rewards.”

“This plays out in the research which shows surprise rewards such as a gift on your birthday, exclusive offers or special experiences go a long way to overcoming the belief that programs don’t offer any real value,” Posner says.

Older Australians in particular those aged 55 and over buy more than younger consumers and choose to buy from companies who have a loyalty program over those who don’t. However they also believe more strongly that programs don’t offer any real value.

Citrus CEO Peter Noble says Baby Boomers are extremely valuable to marketers today.

“Loyalty marketers shouldn’t dismiss this older age group given their higher propensity to spend, but need to work harder to offer greater value,” he says.

Having a tiered rewards program such as gold/silver/platinum memberships based on the amount you spend wasn’t as popular with consumers, with only 36% saying they were very important.

“Ultimately financial rewards win the day for consumers and is the main motivation for joining loyalty programs,” Noble said. “But a winning program is one that also has multiple emotional and unexpected benefits creating an element of ‘surprise and delight’ and tailoring offers based on consumer needs and preferences,” he says.

Australia’s top 10 loyalty programs

The most mentioned loyalty programs cited by respondents as ‘doing a particularly good job’:

1.       Coles Flybuys

2.       Woolworths Everyday Rewards

3.       Qantas Frequent Flyer

4.       MYERone

5.       Priceline

6.       Virgin Velocity

7.       CBA credit card

8.       IGA

9.       Millers

10.   Spotlight