November 16, 2018
Consumer loyalty matters for businesses of all sizes— industry stats indicate that increasing customer retention by 5% can increase profits by up to 95% (source: Harvard Business Review). When you think about how much more likely you are to visit places you already love than to take a risk on trying out a new business, it’s easy to understand how loyal, repeat customers have great influence on a brand’s bottom line.
However, consumer loyalty is constantly changing, as consumer expectations shift with the times. We came across some recently released loyalty stats that we thought are worth sharing. The main takeaway? Brands must change their idea of customer loyalty in order for customer loyalty programs to deliver results. CodeBroker surveyed over one thousand consumers across the United States, polling them on their thoughts about how consumer loyalty programs engage them.
Here’s the breakdown: Loyalty Program Membership is Declining. Overall active member rates for loyalty programs are falling… but it’s no surprise. Customers are no longer tolerant of clunky user experiences. Entire industries have been built around the idea of making life easier: AmazonPrime, UberEats, etc.
In this modern age of technology, consumers don’t tolerate friction well. The old plastic loyalty card has become one of the prime targets for consumer loyalty angst. A whopping 43% of consumers saying that carrying a plastic loyalty card was their biggest pain point associated with loyalty programs. Akin to that, 17% of survey respondents said that looking up their loyalty info when they forget their plastic card is the most annoying part of loyalty. Other concerns included forgetting to bring paper coupons and certificates to redeem, expiring rewards, and visibility over which rewards were available.
Fixing Loyalty: Listen to your customers So, plastic cards and paper coupons are the villains of the loyalty story — so who are the heroes? The survey went on to try to better understand what these consumers would prefer in lieu of the maligned plastic loyalty cards. 71% of shoppers would be more likely to participate in a loyalty program if they could access rewards from their mobile phones. This isn’t surprising, considering how mobile phones are the central hubs for so many operational aspects of our lives: we bank, we order groceries, we shop online, all on our smartphones. These phones are the nodes that connect us to the rest of the world. Smart brands are taking advantage of this immediacy. Thanx is loyalty reimagined. At Thanx, we live by the understanding that loyalty programs are only as good as the customers they retain. It’s why our loyalty program doesn’t introduce any extra steps — no hardware, no plastic cards, no login information to remember. Customers simply sign up once, then pay as usual to earn and redeem rewards at their favorite businesses. The ease of the program is why our merchants see 95% program retention, compared to less than 50% for most loyalty programs. When customers stop using the program because it’s hard to use (carrying a plastic card, remembering your login info), businesses lose the opportunity to retain these customers.