As consumers are forced to make hard decisions about where they spend their money, brands that rely on tired loyalty tactics may struggle to keep up.
The data backs this up. Over three-quarters (78%) of US consumers say good loyalty programs influence their purchase decisions or make them more likely to do business with a brand. But 65% of consumers have canceled their membership-based programs to cut costs.
“Loyalty programs still drive purchase behavior, but people are much more cautious about which programs they buy into or renew,” said our analyst Paul Verna during our virtual summit earlier this month.
Adding perks: Verna shared three considerations for marketers to take their loyalty program to the next level.
Consumers these days are characterized by the three Fs: frugal, fickle, and finicky. What’s to blame? Everything from supply chain disruptions and economic uncertainty to subscription fatigue and a greater sensitivity to sustainability and social issues.
“All this means that brands need to elevate their approach, because [consumers] are in a different mindset than before,” said Verna.
The US, in particular, is having a loyalty crisis. More than half (58%) of US adults are less loyal to their favorite brands, higher than the global average and the second-highest rate among the countries we track.
Key takeaway: It takes a lot more to keep customers loyal these days. Look to the brands that do it best (e.g., Disney, Starbucks) for ideas on how to take your loyalty program from blah to best in class.
This was originally featured in the Retail Daily newsletter. For more retail insights, statistics, and trends, subscribe here.
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