Loyalty programs are missing the mark with the evolving needs of consumers, according to new findings from Runa.
In its “State of Loyalty Rewards Report,” Runa looked to determine what motivates consumers to join or leave a loyalty program.
When it comes to what consumers want, more than half (55%) of respondents said earning rewards easily—and in the places where they already frequently shop—is key. Slightly fewer (48%) said they want the ease of redeeming those rewards—citing their willingness to switch to another loyalty program if this was not offered.
Flexibility is another factor driving consumers to loyalty programs. Roughly 55% of respondents said they prefer to have the flexibility to redeem whenever they choose.
What consumers don’t want is for the loyalty program to be cumbersome. Difficulty in earning rewards was the No. 1 reason why many consumers said they abandoned a loyalty program. Indeed, 65% of respondents agreed. And while most retail stores offer special discounts and promotions on their products, 61% of loyalty program participants said prefer a gift card instead.
How to Revamp Loyalty Programs
According to Runa, the global loyalty management sector was valued at $5.6 billion last year and is projected to more than quadruple by the end of 2029. As such, businesses have a lot to gain from enhancing their current customer loyalty programs—or launching one if they haven’t done so already.
For a loyalty program to hold relevance, the ease of receiving and redeeming points is paramount. It’s also imperative to provide customers with customized communication, recommending specific products and services that would be relevant to them.
A Javelin Strategy & Research’s report published last year looked at how new technologies can now offer merchants a plethora of relevant data that offers a goldmine of relevant insights into their customers’ behavior. Armed with this data, businesses can boost personalization and enhance customer loyalty and satisfaction.
Having a forward-thinking loyalty program will help business stay competitive, promote brand loyalty, and simplify the customer acquisition process.