DISCUSSION
Why do so many people say ‘no’ to retailer loyalty programs?
Written by RetailWire Staff
Photo: @south_nostalgia via Twenty20
A significant number of customers are just not interested in joining loyalty programs, according to a new study, a fact that to some suggests how retailers might engage that cohort.
A full 38 percent of consumers are not interested in joining loyalty programs due to their lack of perceived value, according to a study conducted by CFI Group and Radial.
The study suggests that to get hesitant customers on board, retailers should offer faster delivery, personalized customer service options and more flexible returns. In the study, 63 percent of survey respondents said that the option of speedier delivery influences them to sign up for a loyalty program, 41 percent said that recognition as a loyalty member from a customer service associate would incentivize them to buy more and 55 percent said that multiple exchange options made them more likely to repeat purchase.
Incentivizing loyalty membership based on shipping and service-related perks offers an alternative to more traditional deal-oriented programs, which give customers discounts on specific products in return for membership.
Restricting such perks merely to loyalty program members as the study suggests, however, might require a more nuanced approach. Many customers now see free shipping, easy returns and personalized customer service as table stakes for doing business with a retailer and would balk if a membership price was attached. Amazon.com extends its liberal and convenient return policy to all its users, for example, even though it has Prime, one of the most popular loyalty programs in retail.
Getting customers on board with loyalty programs should be a priority, according to the study. It indicates that loyalty members have a greater rate of satisfaction and willingness to recommend a business.
In the case of Amazon Prime, loyalty membership also demonstrates a willingness to spend more, with members parting with more than double that of non-members, according to Fortune.