Insights from the 2024 Power of Satisfaction Research by Valuedynamx
In the ongoing race to lead the market, brands are not merely competing for attention from customers, they are vying for enduring customer devotion. That’s where a customer loyalty strategy comes in: helping your brand break through the noise and build lasting relationships.
Loyalty programs are a well-known strategy, and almost every brand we speak with is actively working on fine-tuning theirs to turn passive members into enthusiastic participants. Valuedynamx recently conducted a global research study, “The Power of Complete Satisfaction”, that uncovers what customers crave in their ideal loyalty program. The answer: customers want program experiences that let them flexibly earn and spend. They want complete satisfaction.
The research, conducted in January 2024, involved a global study of more than 5,500 respondents across 11 countries who were members of a loyalty program with at least one airline, bank, credit card, or hotel. Coming off the holiday season, customers were feeling the pinch of uncertainty, rising costs, and tighter budgets.
Our team reviewed this report in depth to share the following key insights on what consumers are looking for in a loyalty program today and how brands can stand out and build customer loyalty despite economic challenges.
What Consumers Want from their Loyalty Programs
Loyalty programs have transcended their original role as basic discount tools. They have transformed into dynamic, multi-faceted digital platforms capable of delivering serious bottom-line returns. Today, loyalty programs that deliver complete satisfaction address these key questions:
- Is the value exchange between brands operating loyalty programs and their members being optimized?
- Are loyalty program members deriving equal – if not more – value than they invest?
- We know that customers want to feel recognized by their favorite brands, but what does that look like and how can brands deliver?
- How can brands use their loyalty programs to create “complete satisfaction,” not just luke-warm acceptance?
- How do customers define “complete satisfaction”?
- What does it take for brands to meet expectations of loyalty program members at an entirely new level?
Furthermore, the research identified the following key trends to be considered in a loyalty program strategy in 2024 and beyond:
The "Burning Drives Earning" Paradigm: A New Standard
At the heart of the research is what Valuedynamx refers to as "Burning Drives Earning," or the idea that the more a consumer spends in rewards, the greater their desire to earn. The study reveals that an astounding 83% of loyalty program members have redeemed loyalty currency for rewards at least once in the past three months, with exactly half (50%) redeeming within the past month.
When drilled down further, results showed that supermarket loyalty programs are among the most active of all segments, with members earning currency weekly and redeeming about every two weeks. This makes sense when you think about the frequency of grocery shopping as compared to other types of loyalty programs that consumers might set long-term strategies around when it comes to earning.
Airline and hotel programs are the best example of the power of burning rate as a driver of earning rate. The report found that if an airline program member burns currency just once per year, they are likely to earn points on 17 separate occasions. And, if they increase their burning to five times in a year, they will earn points on 20 occasions (on average).
The direct correlation between redemption and increased earning rates highlights the strategic importance of encouraging frequent reward redemption.
Burning drives earning, but how much does it boost member satisfaction? This research uncovers how satisfied consumers are with their redemption options and what they prefer to spend their rewards currency on.
The Imperative of Satisfaction: Driving Deeper Engagement
According to the research, complete customer satisfaction is now more crucial than ever, making it a top priority for businesses aiming to succeed.
- Simplicity in the redemption process ranks as the most coveted feature (49%) among loyalty program participants.
- The prevalence of redemption options (48%), saving money (47%) and ease of tracking reward eligibility and balances (43%) were other important factors.
Conversely, the research identified the biggest drivers of dissatisfaction as:
- Disappointing reward value (49%)
- Insufficient cost savings (42%)
- Limited product selection (30%).
Ease, simplicity and value are the hallmarks of creating a value exchange that resonates with customers and drives higher levels of satisfaction. And the pace at which members earn redeemable rewards has the strongest influence on member perceptions of program value and feelings of satisfaction. A staggering 44% of those “completely” satisfied with rewards or discounts redeemed over the past six months started earning currency “much faster”, compared to a mere 7% and 1% of those “mostly” or “somewhat” satisfied, respectively.
The report concludes “the implication is game-changing: burning currency is not enough. When a consumer redeems but is unsatisfied or uninspired by what they get, their earning rate remains as passive as a non-redeemer, or worse. Only by both redeeming and deriving satisfaction does a consumer learn that the currency is worth actively earning.”
To enhance customer engagement, brands must prioritize delivering seamless, diverse, and meaningful redemption experiences thereby driving active participation in their programs.
Personalization & Diversification: The Pinnacle of Customer Engagement
Research revealed that satisfaction from a redemption event plays a key role in whether customers become highly engaged or more passive in their loyalty program participation. To create the “redemption joy” customers are looking for, it’s important to look at every aspect of the redemption experience. The study found that providing “helpful recommendations for the best reward options” was the top factor (31%) in creating memorable experiences, followed closely by offering high-value rewards and unique, interesting reward options.
It's clear that smart recommendations are essential for increasing relevance to consumers and should be a key priority for brands aiming to boost satisfaction and engagement. Personalized experiences are what build lasting connections and loyal customers. AI-powered technologies can be effectively employed to process customer data at high capacity and deliver bespoke rewards that resonate with individual customer preferences. This approach anticipates customer needs and, in many cases, surpasses expectations, fostering a deeper emotional connection with program members and driving sustained loyalty.
Consumers are also increasingly seeking flexible redemption options in loyalty programs, and diversification is crucial to keeping these programs appealing. The study shows that brands offering a variety of “non-core” inventory across multiple brands achieve the highest satisfaction levels.
This means customers want the freedom to use their currency with a wide selection of brands, not just the one where they originally earned it. In fact, the research shows that cashback, gift cards, and payment options with retailers are among the most popular ways consumers choose to redeem their rewards currency. Expanding these options is essential for loyalty program success.
Strategic Imperatives: Harnessing the Research Insights
To leverage the insights from the Valuedynamx research and achieve complete customer satisfaction, brands are encouraged to adopt the following strategic imperatives in their loyalty programs:
- Enhance Personalization: Utilize advanced AI and data analytics to offer rewards that align seamlessly with individual customer interests. Personalized experiences are not a luxury; they are a necessity in today’s loyalty landscape.
- Simplify Redemption Processes: Create an intuitive and seamless redemption process that reduces friction and enhances customer satisfaction. A streamlined experience is crucial for maintaining high engagement levels.
- Diversify Redemption Options: Integrate non-core inventory and experiential rewards to keep the loyalty program dynamic and attractive. This strategy ensures that the program remains relevant to a broad spectrum of customers.
- Focus on Complete Satisfaction: Strive for complete customer satisfaction to drive faster earning rates and long-term loyalty. Regularly gather and act on customer feedback to continually improve the program.
The 2024 Power of Satisfaction Research by Valuedynamx is more than a study; it is a call to action for brands committed to redefining customer loyalty. The insights provided offer a roadmap for developing loyalty programs that not only meet but exceed customer expectations. Brands that heed the insights from this research will not only lead their industries but also forge deeper, more meaningful connections with their customers.
