5 Key Takeaways for Customer Loyalty Programs

by Meredith Kavanagh •

Retailers have spent the last year adjusting their operations to accommodate new consumer shopping behaviors. From investing in buy online, pick up in store (BOPIS) offerings to premium loyalty programs, ecommerce retailers are doing all they can to retain customers.

Despite the many changes to shopping habits, a March 2021 survey found that most shoppers are participating in customer loyalty programs more or at the same rate as before COVID-19. When asked how their loyalty program engagement has changed during COVID-19, 71% of surveyed shoppers say participation has stayed the same, while 22% say it has increased, and only 7% say it has decreased.

In addition to being engaged with your program, consumers have also shown they are more likely to shop with you because they are a loyalty member. When asked how likely they are to shop at a store because they belong to a retailer’s loyalty program, the top response was a 10 or “most likely.”

Since consumers choose to shop with you because they belong to your loyalty program and this behavior has remained steady during COVID-19, this is a great time to improve your existing rewards program. Use the following survey responses from online shoppers to make sure that you’re offering members the right perks to keep them engaged.

63% of Respondents are Enrolled in Retail Loyalty Programs

Bizrate Insights’ March 2021 survey of more than 1,400 online shoppers found that 60% of respondents are currently enrolled in a loyalty or rewards program. Female online shoppers were slightly more inclined than males, with 64% participating in at least one program.

Industry has a significant impact on membership, with 63% of respondents saying they are enrolled in retail loyalty programs and 61% for a credit card. Those numbers dropped down to 31% for airlines and 29% for hotel loyalty or rewards programs.

79% of Shoppers Want Free Shipping

Respondents had clear preferences when asked to select their favorite benefits of a loyalty program. The top responses are as follows: 79% say free shipping, 70% say receiving discounts, and 62% say the ability to earn points to redeem for rewards. The remaining benefits are broken down with 46% of shoppers appreciating free returns and 27% liking “other exclusive perks” of membership.

53% of Shoppers Don’t Want Membership Fees

When asked what they dislike about customer loyalty programs, online shoppers were mainly aligned in their preference for discounts and convenience. More than half of survey respondents say they dislike membership fees, 37% dislike the slow rate at which they earn points, 27% cite limited reward options as a downfall, and 25% say that a short redemption period is a frustrating element of loyalty programs.

Convenience is Key

The top write-in response for what online shippers want out of loyalty programs is cashback, with others noting fast delivery and a general convenience factor. The write-in responses for what shoppers don’t like about loyalty programs echo the desire for convenient experiences.

The most common response for why consumers don’t like loyalty programs is “receiving too many emails.” Following that theme are responses that say shoppers don’t want to have another account to manage, don’t want to bother signing up, or want to avoid a slow down during the checkout process.

5 Takeaways for the Ideal Customer Loyalty Program

These survey insights share clear ideas on how to create a rewards program that will delight your members. Create lifelong customers through increased program membership and engagement by focusing on the following areas:

  1. Have a convenient, easy-to-use app or member sign-in process that doesn’t add time to check out.
  2. Focus on the perks they want like free shipping, quick delivery times, free returns, and cashback.
  3. Allow a wide time frame and reward selection for using accrued points.
  4. Be selective in your email communications, and don’t send too many updates to members.
  5. Offer a free membership option for customers who don’t want a premium or upgraded experience.

Learn more about how to delight customers and improve loyalty with our Checklist to CX Prioritization.

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