business news in context, analysis with attitude, the loyalty marketing research and education company, is out with a new study saying that “when asked if it pays to be loyal to a favorite brand, only 12% of U.S. consumers strongly agree and only 17% say loyalty programs are a ‘very influential’ factor in determining a purchase.”

Indeed, the study shows that “while consumer participation in loyalty programs is up, the type of engagement that forges long-term brand commitment is down, a victim of the rapidly disappearing unique customer experience. The number of Americans participating in at least one loyalty program grew from 68% in 2009 to 74% in 2011. For Seniors (60 and over), the jump was from 61% to 81% for the same period.”

In addition, says, “just 31% of U.S. consumers find reward program communications extremely relevant.”
KC's View:
Somehow, I’m not surprised by any of this.

It has been argued here for years that many so-called “loyalty programs” are nothing of the kind - that they largely exist as a way of funneling coupons to shoppers, as somewhat more sophisticated discount programs that have very little to do with creating or demonstrating loyalty.

In the report, COLLOQUY says “loyalty programs have fallen into a trap of copying one another with discount and cash-back rewards that increasingly look alike to consumers. The research conclusion: Something new is needed, otherwise brand owners must incur not only the margin losses but also the cost to re-engage their customers.”

They’re playing my song.

If you are operating a loyalty program, and you see that many of your customers have a key ring full of cards from your competition, the message should be clear. It ain’t working.

First of all, retailers need to be finding ways to demonstrate their loyalty to their best shoppers, not trying to buy loyalty with price cuts.

Retailers need to be seriously segregating their best shoppers for their least dedicated shoppers, their cherry buyers from their cherry pickers.

Otherwise they’re just kidding themselves.