A deep dive into customer loyalty program research.
Brand Loyalty

A Deeper Dive: Maritz | Wise Marketer Loyalty Landscape Study

You might have missed it, but I hope it’s not the case. In mid-August, the Wise Marketer hosted a webinar to showcase the first round of findings from the 2019 Maritz Motivation / Wise Marketer Loyalty Landscape Study. Barry Kirk, Vice President of Loyalty Strategy at Maritz Motivation joined Bill Hanifin, Wise Marketer Managing Editor to share 8 Key Insights from this year’s customer loyalty program research, titled “Your Best Customers Aren’t Who You Think They Are ……. Getting to Know Them with the Split Personality of Loyalty”.

This is the 2nd year that Wise Marketer and Maritz Motivation have collaborated on a research study, taking the pulse of over 2,000 U.S. consumers with the goal of gaining a stronger understanding of consumer perception about customer loyalty programs to create a prioritized list of specific considerations that you can use to transform your customer marketing. The body of outcomes that was created from this research is enormous and that’s why co-authors Barry Kirk and Bill Hanifin decided to open the spigot of results to share the insights that bubbled to the top.

There will be more to share from the research over the coming weeks and months, so consider this a starting point in clarifying your understanding of customer attitudes towards loyalty programs in 2019 and beyond. If you’re interested, you can view last year’s study here.

Strong Demand for Customer Loyalty Continues

Customer loyalty programs have a strong influence on customers.

In case you needed reinforcement about the efficacy and importance of customer loyalty programs in today’s marketing environment, consumers in our survey made clear that strong demand continues to exist. Consumers expect companies to offer loyalty programs as a standard part of a great customer experience, ranking their influence secondary only to product/service quality. 57 percent cited customer loyalty programs as very important or a priority to making purchase decisions.

In the webinar, Barry and Bill talked about the constant discussion in the industry about whether loyalty programs are still relevant or even necessary.  This statistic would strongly suggest they are. In fact, if you don’t already have a program, your customers are probably wondering “Why not?”  You’re also losing out on identifying and retaining valued customers. And, if you do have a program, you should determine how well it’s living up to its potential to drive purchase decisions and to create resistance to competitive offers. 

Experience and Unpredictability in Customer Loyalty Programs

Experience-based customer loyalty programs is on the rise.

The way consumers aligned to the Maritz Multi-Loyalty Framework showed an interesting shift this year. The research showed that while most consumer loyalty continues to be driven by price or offer, True Loyalty, founded on superior customer experience is gaining traction (+8% in popularity) at the expense of Mercenary Loyalty (down 7% in popularity). This told us that while a traditional points-and-rewards program can still drive results, increasingly we see a need for brands to couple that with a customer or program experience that is unique, memorable, and encourages emotional connection to your brand. Barry shared that his primary recommendation would be to try approaches that make your program less predictable, giving members a new set of reasons to pay attention.

Identify Your Unshakeables and Ephemerals

Customer loyalty is always up for grabs!

One of the biggest revelations of the study was that 70% of all consumer loyalty is constantly in play and up for grabs. The study revealed two distinct groups of consumers, Unshakeables, and Ephemerals; and, we saw that the vast majority were in the Ephemeral group, those consumers who say, “I’m loyal but always looking for a better deal”. This creates a major challenge for all brands. Very little customer loyalty is locked in. Yes, most consumers have their favorite brands, but the majority are also perpetually open to something better coming along. This is a by-product of the “rational purchase” mentality shared by many younger, digitally comfortable shoppers. As a result, companies cannot take valuable customer segments for granted, or assume they are immune from attrition. But there is also good news in this insight – while your customers are vulnerable, the same goes for your competitors’ customer base. Barry offered up that its critical to use both behavioral data and customer research to identify your own mix of Unshakeables and Ephemerals, as well as that of your competitors.

Recognize the Split Personality Among Consumers

Customer loyalty has a split personality.

The study got its name from this next finding as we discovered there is truly a “split personality” among consumers. There were other responses that distinguished the two groups. The Unshakeables are more insulated from the temptation to switch brands than the Ephemerals. 66 percent said the chance to earn points influences them to ignore offers from competitors, versus only 47 percent of Ephemerals. And, a much higher percentage of Unshakeables (66 percent) said they would pay a fee to join a customer loyalty program versus just over 50 percent of Ephemerals.

We also found the Unshakeables aren’t price-war scavengers. Over 45 percent of Ephemerals stated price as the primary reason they switch brands, with only 29 percent of Unshakeables citing price as a priority. For this group, product quality, loyalty program benefits, and recommendations of family & friends all ranked higher than price.

Unshakeables are clearly the more attractive target for your loyalty strategy, BUT…the Ephemerals are a BIGGER target. You want more of the former, but you’ll need to go after the latter to build your membership. The trick to find success will be in identifying the customers in your portfolio that belong to each group. If you can do that and put tactics in place to shift more of your Ephemerals into Unshakeables, the value of your customer portfolio will skyrocket.

We’ll look at what you need to know to capture this increased value in the next installment recapping results from the 8 Key Insights from the 2019 Maritz Motivation | Wise Marketer Loyalty Landscape Study. And don’t forget to reserve your copy of the entire Study here.

Updated: Read Part 2 here.

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A Deeper Dive: Maritz | Wise Marketer Loyalty Landscape Study
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