CMO

Study: Loyalty programs need to reward social good

Australian loyalty program members increasingly want rewards with social impact

Customer loyalty program members are increasingly interested in rewards for social good, according to the eighth annual Australian customer loyalty and loyalty program research study, For Love or Money 2020.

This year’s study reveals for the first-time, loyalty program members’ increased interest in the programs they belong to offering life-improving ways to be rewarded. For example, it revealed members’ view on loyalty programs enhancing their overall desire to pursue a relationship and experience with the brand for the first time.

The Point of Loyalty CEO and report author, Adam Posner, said the Australian loyalty program landscape is maturing and it’s time for programs to focus on finding different and distinctive ways to improve the lives of their members.

“The impact a well-designed program can have on brand experience is often debated and it was interesting to find that 68 per cent of members agreed a loyalty program can enhance their relationship with a brand,” Posner said.

In addition, while members are concerned with data use and security, they are making the most of their memberships with 63 per cent indicating they are taking advantage of their rewards and benefits which has significantly increased from 54 per cent in when first researched in 2016.

The report also revealed Gen Z identified rewards for recycling, healthy behaviours and rewards to boost their superannuation savings, to be more appealing than Gen X, Gen Y and Baby Boomers.

“While members in general want rewards to reduce their cost of living, they are also keen to participate in programs with rewards linked to a greater purpose such as recycling and healthy lifestyle behaviors,” Posner commented.

In light of the ongoing coronavirus crisis, Posner made the point it’s even more important for loyalty programs to focus on making lives better for their members. “It will be remembered”. he added.

The research examined eight ways programs can improve their member’s lives. They include rewards for recycling, such as donating clothing and furniture for re-use or recycling; earning rewards for healthy behaviours, such as points for achieving a minimum number of steps in a week; earning cashback rewards which can be redirected to their superannuation fund to help them save more for their retirement; and rewards to reduce the cost of everyday living expenses, such as a phone, energy or insurance bills.

“While programs are improving all the time, they need to keep an eye on their data practices and the value exchange they offer their members for the data they gain,” Posner said.

The research was commissioned by The Point of Loyalty and conducted by First Point Research and Consulting in the first quarter of 2019 through a national online panel of 1010 Australian consumers of men and women aged 18+ who are members of at least one loyalty program.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.