Why loyalty is best for the young and the rich

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By: Wise Marketer Staff |

Posted on July 10, 2003

America's wealthiest and youngest consumers are the most consistent participants in rewards programmes, and are more likely than other groups to do business with a company that offers a loyalty programme, according to a consumer attitudes poll and report from Maritz Loyalty Marketing.

However, although the young and the rich claim to be the most consistent participants in rewards programmes, Maritz found that the two groups are very different in the types of rewards they prefer.

Nearly 89% of young consumers (aged 18-24), and 86% of wealthy consumers (with annual household income of US$75,000 - US$100,000), and 86% of consumers with annual household income of US$100,000 or more, said that their membership in a rewards programme makes them more likely to do business with that company.

Key motivators
The most popular reward programmes for those with household income of US$100,000+ are airline frequent flyer programmes (52%), while the most popular reward programmes among the young consumer group were credit card programmes (26%), followed by airline programmes (23%).

Asked why they participate in rewards programmes, 63% of those in the US$100,000+ category said "for the free travel", while 69% of the young age group said "for the discounts".

"Although participation in a rewards programme has great benefits for both the consumer and the company offering the programme, companies that run rewards programmes need to know that loyalty rewards are not all created equal," said Chris Moloney, director of market development and strategy for Maritz. "Companies need to better understand which types of rewards truly drive loyalty."

Redemption preferences
The survey also found clear age splits in terms of preference for redeeming rewards online. Consumers under 35 are more likely to redeem points online (62%) than those in the 35-64 age range (57%) or the 65+ age group (35%).

The survey also highlighted the fact that 22% of adults in the US don't really know the rules and regulations of the loyalty programmes they participate in, while 58% understand the rules "quite well".

Only 19% said they understand the rules "very well", of which 89% consider themselves more likely to do business with the company that operates the programme.

"With rewards programmes' popularity growing, the time has never been better for companies to make rewards/loyalty programmes stronger and more efficient for consumers in all age and income brackets," concluded Moloney.

The Maritz Poll (conducted in April 2003) surveyed 1,205 randomly selected US adults (602 male, 603 female), and focused on consumer attitudes and issues related to brand loyalty.

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