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Don’t toss that loyalty card: Most Australians still prefer it

August 25, 2015

For marketers worried that consumers are growing weary of loyalty-rewards programs, the results of a new study bring a sigh of relief – at least in Australia.

Despite the perception of consumer fatigue and worries about low program activity rates, the study found that 59% of loyalty-program members in Australia are active in all of their programs, up 31% from 2013. The study “for love or money 2015” – by strategic loyalty consultancy Directivity and retention marketing agency Citrus – defines “active” to mean the member has used his membership or card in the last 12 months.

As for that card: Program operators shouldn’t be so quick to toss it. The study found that 67% of members still prefer using a traditional loyalty card, while only 10% prefer a mobile app.

“We found this one of the most surprising findings of all,” said Peter Noble, report co-author and CEO of Citrus. “It goes to show that getting the card into a person’s wallet or purse is a critical piece of brand real estate and connection.”

Loyalty programs are doing a better job of capturing a bigger share of those wallets and purses, too, said Directivity CEO Adam Posner, and the programs are evolving from cost centers into key profit drivers. A full 82% of those surveyed say they’re buying more from brands with a loyalty program, and 16% even report purchasing items they don’t need just to earn rewards; that number jumps to 26% for men under 45.

More members are sticking with their loyalty programs, too, with the defection rate falling to 22% from 26% in 2013. Noble credits that staying power in large part to the fact that brands are working to keep their programs simple; only 12% of survey respondents said programs are too confusing, for example, compared with 19% in 2013.

When it comes to rewards, money still talks: The preferred program benefit is still immediate price discounts, followed by redeemable points-based programs. And members want to be rewarded for their interaction with brands, with 53% expecting something for answering surveys and 46% for opening emails.

“This research is a good news story for loyalty marketers,” said Posner. “While consumers are telling us they’re more selective with their programs, they’re also more active and engaged.”

 The 2015 study – the third annual “for love or money” research effort – was based on surveys of 1,367 Australian adults who are members of at least one loyalty program. In addition to up-to-date consumer insights, it benchmarks results over the last three years. The full report is available at theloyaltypoint.com.au.

Source: The Loyalty Point