Loyalty programme communications and offers, whether by email, mail, or social networks, are missing the mark by failing to engage members effectively, according to a consumer survey by customer loyalty agency Direct Antidote.
The study found that only 32% of US consumers rated reward programme communications at 8 or higher (on a scale of 1 to 10) in terms of relevance to their personal needs. This means that, despite marketers widely arguing that personalisation is key to their campaigns, 68% of consumers gave their loyalty programmes' communications a personal relevance score of 7 or below.
Direct Antidote's study focused mainly on communications such as annual points balance reports, special earning offers, and other programme-related information. The results across all demographics surveyed showed decidedly average relevance scores, with seniors reporting the lowest perceived relevance with a 5.7 mean score, and young adults and Hispanics tied for the highest score at 6.9.
"We are in an era of high customer expectations, and today's empowered consumer has a strong desire for engagement. But the loyalty industry is falling short on the highly-personalised, relevant communications that consumers expect," warned Di Cullen, president for Direct Antidote.
According to Cullen, the study suggests several areas in which loyalty marketers can improve, and that the following strategies could help to improve communication relevance:
- Create offers that appeal to the trends and values of the time (e.g. the green movement, or recession-driven consumer frugality);
- Leverage partnerships with other brands to share data, drive down costs, and boost the value proposition for the consumer;
- Explore alternative sources and find new ways to mine for information that is compelling to customers.
For example, the company recently launched a campaign for the Air Miles reward programme in Canada, creating 778,000 different versions of the loyalty account statement which was mailed to more than 3 million members. Early tests yielded a boost in response rates of more than 100%, and a very eco-friendly reduction in paper waste of 40%.
The study also noted a peak in engagement with rewards programmes among seniors, compared to the same study in 2007. Over the two-year period the proportion of seniors that reported reading special offers that were sent by mail increased by 64%, while those that had read mailed statements increased by 21% and those responding to member surveys also increased by 21%.
At the other end of the spectrum, the survey found that young adults or millennials outpaced all other demographics in their appreciation of engagement with rewards programmes through new media (such as social networking). A notable 52% of millennials said they "strongly appreciate" communication through the mobile channel, and 55% said the same about social networking web sites (compared to the general population at 38% and 39% respectively).
"These results are indicators that the loyalty business enjoys appeal across the span of demographics. As Baby Boomers move from workforce to retirement, there is an opportunity to engage these consumers with communications that appeal to their new lifestyle," concluded Cullen. "At the same time, fostering engaged, loyal customers within the young adult demographic means approaching them using emerging channels."