Loyalty Memberships Increasing, But Struggle to Keep Consumer Attention
Business Solutions Americans love rewards, but it takes a lot more than a run-of-the-mill loyalty program to hold their attention.
While consumers are signing up in droves for loyalty-reward programs, they get bored by them pretty quickly. In fact, more than half of all memberships are inactive.
It’s a scenario that plays out frequently: You’re checking out at the coffee shop, gym, department store—sometimes even the veterinary office or cosmetic surgery center—and the clerk or receptionist asks if you’d like to join the loyalty program, often dangling the lure of an immediate perk. “Ehhh, why not?” you think.
Flash-forward a week, a month, a year… You’ve barely visited the website or app, or you’ve collected some points and decided it’s not worth your time, or maybe you've forgotten you even joined. For companies that operate loyalty programs, it’s a waste of money, time and the limited patience of customers, who have submitted their personal information to join.
"While consumers are signing up in droves for loyalty-reward programs, they get bored by them pretty quickly. In fact, more than half of all memberships are inactive."
The 2015 COLLOQUY Loyalty Census, based on a comprehensive survey of these U.S. programs from 2012 to 2014 details this dichotomy. Memberships in these programs leapt 26 percent to 3.3 billion in the two-year period; but nearly 2 billion of those accounts, or 58 percent, are inactive. In fact, Americans average 29 memberships per household but participate in only 12.
The Census takes a deep dive into the core industries that operate loyalty programs—retail, financial services and hospitality/travel—as well as categorizing and exploring a new sector called emerging platforms, which includes Groupon, Ebates, Amazon Prime and others. It explores interesting trends in the world of loyalty marketing, such as this one: Restaurants make up a relatively small part of the travel and hospitality sector, with 54.8 million memberships, but consumers’ appetite is growing. The subsector grew 107 percent, on the heels of a 171 percent increase from 2010 to 2012.
Most of all, the COLLOQUY Loyalty Census examines what companies and organizations can do—from in-depth assessments to super-personalized rewards to cutting-edge apps—to keep their loyalty programs relevant.
If they don’t? American consumers will just keep on walking.