The rich consumer: loyalty buff and big opportunity

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By: Wise Marketer Staff |

Posted on February 24, 2005

Seven out of ten high-income earners are more loyal to companies that offer loyalty rewards programmes, according to a new Maritz Poll which indicates that these consumers are diligent about finding the loyalty programme that best suits their needs and taking full advantage of the rewards offered.

When it comes to collecting their rewards, more high-income earners (those with annual income of US$125,000 or more) said they prefer to receive cash back (70%) than free travel (62%). Half have re-gifted their rewards to others. Around 90% have been enrolled in a rewards programme for two years or more, compared to 69% of all survey respondents, and 95% have redeemed points for a reward compared with only 79% of all survey respondents.

Savvy consumers
"High-income earners are savvy consumers", said Gail Sneed, market development director for Maritz Loyalty Marketing. "It's an interesting paradox that they prefer rewards that save them money when they have the household income to obtain these basic items and could easily build up points for free travel instead." According to Sneed, companies need to realise that their rewards offering can make or break a high-income individual's decision to begin or maintain a relationship with them.

Of the high-income group examined, 45% are already enrolled in multiple credit card programmes, and 41% currently have credit cards issued through their main bank. Moreover, 64% said they would increase business with their main bank if they were rewarded for doing so, representing a huge opportunity for banks to cross-sell their products to customers by offering a bank-wide reward incentive.

Opportunities for banks
Currently the majority of high-income earners own investment products (92%) and mortgages (64%) - but only 17% and 40% respectively purchased these through their main bank. Additionally, 75% of high-income earners said they would be more willing to provide personal information to their banks if their rewards and communications could be better planned.

"These represent good opportunities for banks to gain customer loyalty by attaching a rewards programme to all of their product offerings", Sneed said. "By using a customer's personal information to design a customised rewards programme, it's a win-win situation for both parties."

Of course, the challenge for banks will be to transfer, manage and analyse all of the customer data they need into one place - to obtain a single view of the affluent customer. Only then, Sneed says, will they be properly equipped to create highly-targeted loyalty programmes that help build life-long relationships with those customers.

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