‘Everyday Earners’ prefer high-frequency loyalty programs

Discussion
Sep 23, 2014

Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints website.

More loyalty program members (83 percent) earn points and miles on everyday purchases than through any other rewards-collecting method, according to research data from Points. As many as 81 percent of loyalty members seek out bonus point offers, while 69 percent make big purchases on reward-earning credit cards.

Retailers that implement loyalty programs have the opportunity to provide customers with extra value and show their appreciation for their ongoing purchases. The loyalty industry currently is valued at $48 billion, according to COLLOQUY, and includes 2.65 billion U.S. loyalty membership accounts.

The report, titled, "From Everyday To Extraordinary: How Retailers Can Woo Shoppers With Points And Miles," labels consumers who prefer the everyday purchasing approach, even when earning small amounts, as "Everyday Earners." In fact, two thirds of respondents agreed with the statement: "Earning points/miles in my favorite programs is important to me, even if I am only earning a small number of points/miles."

For the report, Points surveyed a panel of more than 1,500 people who claimed they were members of multiple loyalty programs. The survey was designed to uncover respondents’ attitudes towards "high-frequency earning opportunities," which is defined as the act of being rewarded with a handful of points/miles during frequent, inexpensive purchases.

Everyday Earners will go out of their way to earn rewards, with 60 percent saying they actively look for promotions that will help them earn more points and miles. In fact, many Everyday Earners will even push brand loyalty to the side, as 69 percent of program members said they would choose a different brand at least sometimes to earn more points and miles. More than half (54 percent) stated that they buy more from companies that reward them for their purchases. Similarly, 48 percent of consumers said they would shop at a different store to earn rewards.

Is there a missed opportunity for retailers in crafting points-driven loyalty programs around frequent, inexpensive purchases? What’s lacking from many programs built around everyday purchases?

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10 Comments on "‘Everyday Earners’ prefer high-frequency loyalty programs"


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Graeme McVie
Guest
Graeme McVie
7 years 7 months ago

Retailers need to design their loyalty programs within the context of their overall loyalty strategy, and ensure the programs consistently earn and reward loyal customers for loyal behavior.

We’ve often found that retailers have the most success when they combine rewards for every day purchases with some promotional purchases that are tailored to the specific needs of their most loyal customers.

Retailers need to pay attention to the rate at which customers can earn points and how these points can be redeemed for rewards. Customers will quickly lose interest if it takes too long to earn sufficient points that they can redeem for a reward that has value to them.

Roger Saunders
Guest
7 years 7 months ago

Too often c-level and technology executives are left out of the process in supporting these strategies. There are even cases of CMOs who are not in touch with the loyalty program.

If retailers are seeking customer lifetime value (CLV), they have to develop a single-customer view, top-to-bottom, as an organizational priority. Be certain, especially, that the marketing and data teams are not siloed. They need to work together.

Dan Raftery
Guest
7 years 7 months ago

It’s more like a forgotten opportunity. When the grocery industry adopted this “new form of green stamps,” the programs were called frequent shopper programs. When marketing folk got involved, they pushed the notion that the programs should reward loyalty, which was proven long ago to be a figment of their imagination.

I’m glad to see the more operations-minded approach to rewarding frequency. Loyalty is pretty hard to define let alone measure. Frequency is easy.

Ben Ball
Guest
7 years 7 months ago

While the premise of “Everyday Earners” is powerful, the inherent advantage lies with payment providers (Mastercard, Visa, etc.) to aggregate points across multiple (if not all) purchases. Even retailer affinity cards such as Costco’s American Express card allow consumers to collect points, or my favorite—cash back—on every purchase and not just Costco purchases.

Cathy Hotka
Guest
7 years 7 months ago

These programs are frictionless ways to encourage certain behaviors. The added benefit is that most of these programs’ participants are relatively affluent.

Busy consumers value programs like this. They provide relevant offers and value to their vendors.

Andy Casey
Guest
Andy Casey
7 years 7 months ago

One of the keys to building long-term shopping frequency is keeping the program fresh with shorter-term promotions focused on earning a specific, high value reward. Gas promotions that roll over each month are certainly one idea, but lose some punch when they are pervasive across the market (gas is gas). Shoppers often spread purchases across many stores chasing specials or for convenience, but a 12-16 promotion featuring a unique high-value reward for shoppers who focus more of their spending in a particular chain can be a powerful motivator for consumers.

Mark Burr
Guest
7 years 7 months ago
In the supermarket world there must be a reason beyond just offering the customer something that they wouldn’t have received otherwise, for example, sales/prices given only with a card. This is absolutely essential, as consumers can buy these item at far too many other choices without the inconvenience or false benefit. That leads to the true definition of loyalty. Loyalty is owned by the customer. They make loyalty decisions every day based on their ever changing value equation that exists at the moment. When the consumer makes the decision to visit a retailer over the many other choices and then makes that same decision again, that is the initiation of loyalty by the consumer. If truthfully answered by the consumer, that decision is based on experience rather than inducement or their value proposition at the moment. What’s missing from so-called “Loyalty” programs is being consumer driven rather than retailer driven. To often the programs are driven by what the retailer wants the consumer to do, rather than what the consumer wants to do with the… Read more »
Gajendra Ratnavel
Guest
7 years 7 months ago

What really bothers me about this is why are we still doing a “Survey” to do this kind of research? A survey is not an accurate method to do this when you can mine the data. Data is after all what loyalty programs were meant for. It will take a slightly brighter set of people to do it, but it will yield a more accurate result.

I am not a big points collector, but I know a lot of women that are part of the “Shoppers Drug Mart” loyalty program and most of the results in this article align well with my observations, but I also think these people may provide answers to the survey that skews the results in hopes that they improve their rewards.

Ralph Jacobson
Guest
7 years 7 months ago

90+% of grocer’s “loyalty” programs are nothing more than mass, untargeted discount programs. There is literally nothing driving true loyalty. The consumer knows they must join the club to get the off-the-shelf discounts. Other segments of retail tend to be a bit more creative, however the vast majority still need true differentiators to drive real brand loyalty. Points programs that tally from everyday purchases and ultimately lead to tangible rewards are much better at driving a migration of shoppers to that program versus others.

Kai Clarke
Guest
7 years 7 months ago

Yes. Most retailers do not use any clear focus in doing any type of data mining or measurement, let alone a feedback loop to determine the strength of their internal marketing efforts.

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