Loyalty programs are a great way to create long-term relationships and boost sales. And, they can turn satisfied customers into delighted brand advocates. Seventy percent of consumers are more likely to recommend a brand with a good loyalty program. But will just any loyalty program work with today’s savvy shoppers?
Retailers are rethinking their marketing strategies as shoppers have come to expect more from traditional loyalty programs. Since Amazon Prime hit the scene with free two-day shipping and discounts across purchases, shoppers have an appetite for the benefits and perks of loyalty programs everywhere they shop.
It’s a great time to put yourself in your shoppers’ shoes and get creative with your incentive strategies. Read on to discover insights into how shoppers perceive and interact with loyalty programs.
The basics of loyalty programs
According to a 2021 YouGov study commissioned by Bolt, 83% of online shoppers are a part of at least one loyalty or rewards program. Loyalty programs are a powerful marketing strategy that drive spending and brand allegiance.
Loyalty programs are a tried-and-true marketing strategy used to:
- Increase customer lifetime value and repeat purchases
- Boost revenue
- Encourage word-of-mouth advertising
- Differentiate a brand from its competitors
- Build customer loyalty
- Show customer appreciation
- Improve customer retention
So what does the future look like for loyalty programs? Currently, Ecommerce loyalty programs feel fragmented to shoppers—each retailer has a different program that has its own set of forms and rules. It’s tough for shoppers to keep up with what they’re enrolled in and as a result, lots of rewards get left on the table. All that said, there is a lot of value in bringing together disparate loyalty programs for a unified view for shoppers.
A new trend in loyalty programs could be emerging soon. It’s time for retailers to shift from a company-focused loyalty program approach to an ecosystem-enabled one. Banding together means being able to compete with Ecommerce behemoths such as Amazon. In order to provide shoppers with a more holistic experience, retailers should seek out strategic partnerships with other brands—even if they’re competitors.
Loyalty programs are seeing engagement
According to our research, shoppers sign up for loyalty programs, engage with them, and actively use them. In the past year, 44% of shoppers have earned and redeemed more points, compared to 37% in 2020.
Shoppers are both racking up points and rewards, and cashing in on them. Now is the time to leverage your loyalty program to influence your customer spending behavior.
When shopping online, 47% of shoppers are more likely to join a loyalty or rewards program. So with shoppers’ interest piqued, striking with an innovative program could mean lots of growth, retention, and loyalty.
Top values of loyalty programs
Point-based programs are among the most successful retention marketing strategies brands use to keep shoppers engaged with their brand. According to 66% of shoppers surveyed, the primary value of loyalty and reward programs are points and cashback.
Additionally, 59% of members say the size or value of the program most heavily influences whether or not they join a loyalty program. Getting shoppers to become loyalty program members pays off in a big way. Fifty-eight percent of respondents said they’re more likely to make additional purchases with a retailer once they join a loyalty program.
Whether it is free shipping, member pricing, cashback, or the ability to earn points towards a purchase, paying less than sticker price is the top value-add of loyalty programs.
But keep it simple. Don’t confuse members with extreme benefits. Focus on memorable and valuable experiences that encourage them to shop. Meet high customer expectations and increase engagement by:
- Offering a free trial
- Providing free shipping
- Earning points for every dollar spent
- Encouraging friend referrals and social media posts for points
Universal loyalty programs are the next big thing
Are people interested in universal loyalty programs that bring together their favorite brands in a delightful and mutually beneficial ecosystem? The YouGov commissioned survey revealed that 87% of online shoppers are interested in joining a universal loyalty program.
But the breadth of brands included in these universal loyalty programs is crucial for their adoption and success. For example, the study indicates that 38% of shoppers said they needed three to five of their favorite brands to participate in the program for them to sign up.
So what’s encouraging to independent retailers about this finding? In the Ecommerce landscape where Amazon dominates, 50% of online shoppers said they would shop at Amazon less if a universal loyalty program could compete with the benefits of Amazon Prime.
Consider adopting a partnership approach for your loyalty program. While you can’t dethrone Amazon, you can compete with them. Shoppers have an appetite for universal loyalty programs that reward them across multiple brands.
In an industry like Ecommerce that is constantly evolving and changing, it’s up to retailers to dig into their creative bag of tricks to meet the growing demands of shoppers. So stay on top of the latest trends and adjust your consumer loyalty strategy accordingly.
Whether you’re revamping your loyalty program or just dreaming it up, Bolt supports your efforts to turn shoppers into paying customers. For example, Bolt One-Click Checkout lets you take advantage of the traffic your loyal program drives to your site by making purchasing a seamless experience.
Keep in mind that consumers have an appetite for engagement and join loyalty programs to pay less than the sticker price. But most importantly, consider a universal loyalty program that brings together disparate loyalty programs for a unified view for shoppers.
While shoppers see the innate value of individual loyalty programs, they now want these benefits to expand across retailers. Reward points, discounts, and free shipping improve the shopping experience, and consumers now want these benefits to work everywhere they shop.
Download Bolt’s 2021 Consumer Loyalty Programs Report to discover more profound insights into how shoppers perceive and interact with loyalty programs.
All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 1364 adults, of whom 878 qualified as “online shoppers.” Fieldwork was undertaken between December 21st–December 22nd, 2021. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+). The survey was commissioned by Bolt and executed by YouGov.