Why retail loyalty lacks consumer 'outreach'

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By: Wise Marketer Staff |

Posted on March 19, 2004

Almost 40% of consumers have never redeemed rewards earned from the retail programme they have been enrolled in the longest. Yet, nearly half (49%) of retail rewards programme participants say such programmes have an influence on where they decide to spend their retail dollars, according to a recent survey by loyalty marketing firm, Maritz.

The survey found that, while most consumers stay enrolled in loyalty programmes for years, there is a disconnect in terms of the low number of reward redemptions made over that time.

"Most retailers recognise the value of having a consumer rewards programme, yet many stop short of consistently connecting with customers after they have signed on," explained Craig Hogan, vice president of marketing and strategic planning for Maritz Loyalty Marketing. According to Maritz, it is imperative for retailers to engage customers at every point of contact: at the cash register, by telephone, and by e-mail.

Faithful loyalty
As well as displaying a desire to shop more with retailers that offer rewards programmes, the majority of consumers say they are faithful to those loyalty and rewards programmes they choose to join.

Maritz Loyalty found that 24% of consumers joined their longest-standing retail rewards programme between one and two years ago, with 19% having joined two to three years ago, and 29% having joined three or more years ago. However, 21% of consumers who once participated in a retail rewards programme have since opted out.

"Again the disconnect shows up," said Hogan. "Rewards programmes are designed to attract new customers, and to reward and retain loyal ones. What's missing is the continuity of outreach to customers. It makes sense to add value for customers who have stayed with you the longest - but that isn't happening."

Preferred rewards
When consumers were asked what types of rewards they prefer to redeem their retail points for, cash back came out top, while free tickets to events were least popular: