How do you keep your customers satisfied and coming back to your store for more? Give them loyalty program benefits that matter most. New findings from the Nielsen Global Survey of Loyalty Sentiment showed that the biggest attraction for retailer loyalty program participants was discounted or free products. But if loyalty program membership isn’t free and easy—or the benefits to the consumer aren’t clear—there’s a good chance consumers won’t join.
Three-quarters (75%) of global respondents said that getting reduced prices—or even better—no-cost products counted the most when joining loyalty programs. North Americans and Europeans exceeded the global average, with 82 percent in each region finding money-saving deals worthy of their participation. Beyond lower prices, global respondents favored enhanced customer service (44%) and free shipping incentives (42%). More than half of Latin American (59%) and Asia-Pacific (53%) respondents valued good customer service. Meanwhile, free shipping incentives prompted patronage for 46 percent of North Americans and 45 percent of Asia-Pacific respondents.
Exclusive deals and special shopping hours enticed one-third and one-fourth of global respondents, respectively, but these attributes were most persuasive among Asia-Pacific loyalty program participants. Roughly four-in-10 Asia-Pacific respondents said that exclusive deals (41%) and special shopping hours (36%) were benefits that mattered.
“In markets where loyalty programs are long established, customers tend to be savvy about copy-cat promotional offerings that don’t offer unique advantages,” said Julie Currie, senior vice president Global Loyalty, Nielsen. “In developed loyalty markets, such as in Europe and North America, retailers and manufacturers need to work together to offer exclusive rewards that cut through the clutter in an environment where consumers are falling out of love with shopping mega-format stores. New and innovative concepts, especially in the online space, that connect with how consumers want to shop are proving to be most effective.”
Easy Come, Easy Go Unless It’s Worthwhile
Half of global respondents said that they would opt out of a loyalty program or not sign up if it was too expensive, and 37 percent would not join a program if it was too complicated. However, retailers should also consider the importance of trust. One-fourth (25%) of all respondents were averse to giving personal information freely, with respondents in the Middle East/Africa (30%) and Asia-Pacific (29%) exceeding the global average.
While the benefits of joining a loyalty program can make participation rewarding, if shoppers are unaware of the advantages, then patronage will likely fall off. Forty-three percent of all respondents who shop in retailers that offer loyalty programs said that they would opt out of a program if they didn’t shop there enough to realize the benefits.
“While conventional communication strategies such as direct mail and in-store flyers can be effective methods to promote store sales and loyalty program participation, online tactics give retailers the benefit of one-to-one customized messaging that speaks directly to customers,” said Currie. “Making effective use of shopper data can tailor messaging and promotions that get to the heart of shopper needs, and it can be a successful strategy for increasing store traffic and inciting loyal patronage.”
A word of caution on the overuse of communication tactics: The expectation of receiving too many emails and communications can have the opposite effect, particularly in some regions. For example, in the Middle East/Africa, too many emails were a reason to opt out of a program for 30 percent of respondents, but in North America, only one-in-six (17%) respondents were negatively affected by the volume of communication.
Other findings include:
- Are loyal customers worth more?
- Incentives that stimulate switching behavior.
- Loyalty program prevalence and patronage go hand in hand.
For more detail and insight, download Nielsen’s Global Loyalty Sentiment report.
About the Nielsen Global Survey
The Nielsen Global Survey of Loyalty Sentiment was conducted between Feb. 18 and March 8, 2013 and polled more than 29,000 online consumers in 58 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of ±0.6%. This Nielsen survey is based on the behavior of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or 10 million online population for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.