What Consumers Want in a Loyalty Program
If we were to look between the folds in your wallet, on the keychain in your pocket, and among the apps on your smartphone, it’s likely we would find evidence of your favorite brands, displayed proudly in the form of loyalty cards and accounts. In fact, the average person belongs to roughly 14 rewards programs – though they only actively engage with about 7 of them.
Why should you want to have a robust loyalty program that engages consumers? According to Hubspot, it costs 5 to 25X more to acquire a new customer than to sell to an existing one, and existing clients spend 67% more than new buyers. Loyal customers not only spend more, but they are also more likely to refer others to your dealership. In other words, existing customers are gold for your business and worth your investment.
It’s important, then, to set up loyalty programs that retain existing clients by offered rewards that buyers want. Marketing Dive recently reported on new research that explored consumer preferences for rewards programs. The study revealed some unique findings that may guide the development and implementation of your dealership’s loyalty program:
Unsurprisingly, there’s an escalating move to digital devices, as 66% of people prefer to access their loyalty programs via mobile apps. And of course, people continue to like saving money – wide majorities say they preferred loyalty rewards to include free products (76%) and discounts (74%). However, the standard system of rewarding loyal customers with points that add up to free or discounted products may be falling out of favor. In fact, over a third of consumers (36%) report that they do not find traditional points-for-rewards systems to be appealing.
The desire for new ways of implementing loyalty programs may be due to frustration with traditional systems, as 54% of people say that earning rewards takes too long. As further proof that we are in an instant-gratification world, 75% of consumers report that they prefer a more immediate exchange of actions for rewards, such as watching a video or taking a survey in order to directly obtain a reward, as opposed to earning points. Furthermore, 61% say they prefer brands to surprise them with offers simply for being a customer.
In addition to a growing preference for instant and sometimes-unexpected rewards, buyers are increasingly concerned about their privacy. Citing issues like identity theft and credit card fraud, a majority (71%) worry about brands using loyalty programs for collecting and using their personal data. Those concerns are likely why only 28% of people are comfortable sharing their browsing history and only 26% want targeted product recommendations that are based on personal history.
Retaining customers through an engaging loyalty program delivers a strong ROI, but as the world changes, it’s important to keep in mind evolving consumer preferences. Buyers continue to like free and discounted rewards, but increasingly prefer those rewards to be earned more quickly or even provided spontaneously, while still maintaining ownership of their private information. With all that in mind, we want to know what type of loyalty program your dealership offers! Is it a traditional points-for-rewards system, or something new? Let us know in the comments below!