Because consumers prefer instant gratification and personalized rewards over delayed gratification and generic rewards.In a survey of 2700 U.K. consumers by Grass Roots Group, 54% said that they believe it takes too long to earn rewards in loyalty programs. In fact, 27% of them have stopped using a loyalty program because of the length of time it takes to earn a reward.
So what do consumers want from loyalty programs then?
They want INSTANT AND RELEVANT VALUE.Like it or not, we live in the age of impatience, the age of “instant everything,” a time when consumers are gravitating towards companies, products, and services that can satisfy their unique needs as quickly as possible.
Loyalty and discount programs that require complicated, multi-step behaviors and lengthy wait times to redeem rewards are not what consumers want. Most consumers don’t want to track their points, or wait to reach a “status level” in order to receive rewards. They don’t want to check their account statements for credits or rebates. They want instant gratification.
Natalie Berg at Planet Retail believes that loyalty efforts will see dramatic changes in the coming year. In fact, she predicts that the loyalty card will die out entirely in 2015, especially for supermarkets. Berg says, “Customers want instant value without having to jump through hoops.” She further explains that trends in loyalty programs are moving toward personalized mobile rewards to attract and retain customers in the future.
Consumers want REAL-TIME ENGAGEMENT – they want a reward right when it’s relevant.
Today’s consumers want to be notified of rewards in context – while they are going about their daily routines. For example, the Starbucks mobile app alerts users of their rewards when they’re in the store – so they can actually use them. Why doesn’t every retailer, financial institution, and major brand alert users at the right time and place when they deserve a reward? Customer engagement wanes when rewards programs are not relevant, timely, and easy.
As Adam Goran, divisional director of customer engagement at Grass Roots Group, explains, “Customers want, and expect, to be contacted by their loyalty [programs], and if approached in the right way at the right time, they will become true advocates and not just occasional shoppers.” If loyalty programs fail to capitalize on real-time engagement, they will find it increasingly difficult to hold on to loyal customers.
Consumers want THEIR NEEDS TO BE UNDERSTOOD, and they want TAILORED OFFERINGS based on those needs.
Rewards programs that offer generic, non-personalized discounts do not foster loyalty because they don’t provide relevant, meaningful value to customers. If discounts or rewards don’t appeal to the needs of each consumer, then he or she will ignore the offers and thus ignore the brand sending the offer/reward.
Susan Binda, head of loyalty marketing at The Logic Group says, “Providing relevancy to customers is absolutely paramount because if the brand is showing that they understand a customer’s needs, their history, their profile, their demographics and the things that they like, and then they meet those needs, that’s where the success will come.”
If you give them what they want, CUSTOMER ENGAGEMENT & WALLET SHARE WILL NATURALLY INCREASE.Binda further describes how companies can use loyalty offerings to influence their customers’ behaviors. She says the most successful loyalty initiatives are by brands that aim for a desired customer behavior, and then tailor their rewards and discount offerings to ensure they are getting the desired behaviors.
How might this work for a bank or credit union?
Let’s say that your credit union or bank has a goal to drive auto loans, so your “desired behavior” is to raise awareness and complete loan applications. The challenge is to tailor your loyalty offering to drive car loan applications (pun intended) in a way that is relevant to customers'/members’ own needs and behaviors.
One way to influence those behaviors could be to alert them to your great loan rates or easy application process while they are thinking about purchasing a car. The right mobile engagement platform would send location-based alerts about your auto loans to your members when they are at or near car dealers. Imagine a member getting an alert on their phone about your low rates as they drive onto the car lot. At just the right moment, you connected with your client in real-time about a product they were actually interested in.
So it’s time to evolve to a deeper level of engagement and give your clients what they want from a loyalty program—instant gratification.
Larky can help you give your clients instant gratification, real-time engagement, and personalized rewards delivered at the right time and place throughout their daily routines. Ask for a demo!
This article was also published on CU Insight. Read it here.