Half of brands missing out on the benefits of loyalty programmes

Latest research from the DMA and Pure360 reveals the loyalty disconnect between consumers and marketers

Loyalty programmes are far from universal, with just half of companies (49%) currently offering schemes according to marketers surveyed as part of the DMA’s latest ‘Customer Engagement 2019 – Marketers’ view’ research. The finding comes despite the majority of marketers (70%) agreeing that customers enjoy and value the rewards offered in such programmes – in fact almost the same number of consumers (69%) felt the same.

The report, released today in partnership with Pure360, surveyed marketers to understand their perspective on customer engagement, comparing these findings to the ‘Acquisition and the consumer mindset’ and ‘How to win trust and loyalty’ research released in 2018. The study revealed the continuing power of offers, whether it’s to acquire or retain customers, with discounts (53%), free delivery (41%) and free samples/gifts (31%) leading the tactics marketers believe are most effective.

However, when it comes to loyalty schemes the research reveals consumers want more than just discounts and points to feel truly valued. In fact, consumers were more enthusiastic about a range of possible benefits compared to marketers, including: rewards based on their location (56% compared to 13% of marketers), personalised emails about product news/updates (54% vs. 19%), and game-like challenges (45% vs. 15%).

Komal Helyer, Marketing Director at Pure360, said: “2018 was a challenging year for brands of all shapes and sizes. From large to small, high street to online, many have seen unsettled consumer confidence and dwindling loyalties translate to reduced revenues.

As a result, getting customer engagement right has never been as great a priority as it is now – although while it’s clear that marketers are aware of this, what’s less clear is that they consistently know what the best way is of going about it.”

Loyalty disconnect

There is a disconnect between how marketers perceive consumers’ loyalty and what they actually feel, with just 26% of marketers agreeing that customers are less loyal to brands than a year ago, while 39% of consumers agreed in our previous study.

Additionally, 39% of marketers believed consumers would be persuaded to “shop around” for new brands if offered new deals, but an even greater proportion of consumers (57%) said they would switch for a good offer. Meaning marketers could be under-estimating the power of deals and offers in breaking brand loyalty.

Scott Logie, Chair of the Customer Engagement Committee at the DMA and Customer Engagement Director at Read Group, said: “Great customer engagement should result in loyalty. In turn, those returning customers want to be rewarded, and it’s clear from the results that a surprising number of brands are ignoring loyalty programmes and the additional engagement on offer.

Overall, the report provides deep insight into the current state of customer engagement and much food for thought about the differences between what brands deem to be successful customer engagement strategies and what consumers say engages them – or not.”

To read more about the DMA’s Customer Engagement research, including the full report, visit: https://dma.org.uk/customer-engagement

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from TheMarketingblog http://www.themarketingblog.co.uk/2019/02/half-of-brands-missing-out-on-the-benefits-of-loyalty-programmes/