Most Americans Dissatisfied With Loyalty Programs

By Christine Kern, contributing writer

According to a recent report by COLLOQUY and FanXchange, 54 percent of Americans are dissatisfied with loyalty program rewards from their favorite brands. The report also states 48 percent have “experienced frustration” during the redemption process.

The report, titled “Live It Up — Using Experiential Rewards to Re-Ignite Member Engagement,” surveyed more than 1,000 American consumers: 93 percent of American respondents noted that the rewards offered by a brand are either “very important” or “somewhat important” in determining whether to choose that brand, and about 43 percent of American consumers have also purchased more frequently because of reward offerings or loyalty program membership.

Consumers also preferred live event tickets (concerts, sports, or theater) to be more attractive (56 percent) as a reward than airline tickets (44 percent).  A Travel Pulse article points out according to a 2013 study by JWT Worldwide, 72 percent of millennials would rather spend their money on experiences than products.

The article asserts that experiential rewards offer a solution to the frustration of members that comes from a proliferation of indistinguishable rewards programs.  Loyalty programs were created to set a brand apart; instead, rewards have become commoditized with very little differentiation between programs. Many members just use their rewards to redeem items they would have purchased anyway. And simple discounts don’t represent the inherent value of loyalty program memberships or build the long-term relationships intended by loyalty programs.

The 2013 COLLOQUY Loyalty Census demonstrated this lack of engagement, finding that while memberships have grown to almost 22 per household in the United States, only 9.5 of those memberships are currently active. 

The “Live It Up” report can be downloaded at http://www.colloquy.com/2014-customer-engagement.