Loyalty scheme participation jumps nearly 20%

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By: Wise Marketer Staff |

Posted on July 9, 2009

Despite the recession, US consumer participation in loyalty rewards programmes is on the increase across all demographic segments, according to the latest research from Colloquy, which noted a 19% growth in loyalty scheme participation since the previous study in 2007.

Interestingly, activity in the most desirable demographic segments is up even more, the study found. Participation by Millennials (those aged 18-25) has increased by 32% since it was last measured in 2007. Women, as a stand-alone demographic segment, also saw a participation increase of 29% during the same period.

Consumers are apparently leaning on loyalty programmes to stretch household budgets further by earning rewards for their purchases. The retail category demonstrates the highest positive impact in reward programme attitudes, with 75% of the consumers surveyed reporting a net neutral or positive effect on their programme participation as a result of the declining economy.

The Financial Services sector remained relatively flat, with 52.7% of consuemrs reporting that the recession has made "no difference" to their loyalty programme participation.

"In spite of the dire economic news of the past 18 months, consumers remain as engaged, if not more so, with loyalty and rewards programmes," said Colloquy's editorial director, Rick Ferguson. "In fact, US consumers clearly see value in programme participation, and continue to leverage their activity as an antidote to hard times, seeking added value and using rewards to stretch their dollars."

The study examined trends in six key consumer segments:

  1. General Population (representing a statistically distributed sample of the US overall);
  2. Affluent (heads of household with annual income of US$125,000 or more);
  3. Millennials or Young Adults (aged 18-25);
  4. Seniors (aged 60 or older);
  5. Core Women (females aged 25-49 with annual income between US$50,000 and US$125,000);
  6. Emerging Hispanic (aged 21+, and of Hispanic origin, with an annual household income of US$40,000 or less).

Loyalty participation by Millennials increased significantly, as 'recalled participation' rates for loyalty programmes now stands at 58%, a 32% increase over two years before. The data also revealed more details about this particular group and their perceptions about loyalty programmes, such as:

  • Nearly half (46.4%) of responding Millennials rate retail rewards programmes as "more important" during the recession. This outpaces the general population, at 32.3% for the same category.
  • 27% of Millennials are actively seeking to enroll in new programmes to help expand their budgets.
  • Millennials are far more likely to enjoy engaging with programmes through new media channels than the General Population. Over 55% appreciate communicating through social networking sites (39% for General Population), and 52% enjoy communication via cell phone or text message (38% for General Population).

"Millennials represent a golden opportunity in a time of economic darkness for loyalty marketers," said Kelly Hlavinka, Colloquy partner and co-author of the study. "This demographic is eager to join programmes, eager to build relationships with their favourite brands, and eager to engage with new media channels. This shows a powerful opening for loyalty marketers to build sustainable loyalty with the next generation of consumers."