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For love or_money_loyalty_research_2015

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Consumer research study taking the pulse on Australian loyalty programs and their impact on customer loyalty.

70 page insight-packed report
Tracks the pulse of change to benchmark results from 2014 and 2013 research studies
Reveals new insights that impact on brand loyalty and loyalty program success

Published in: Marketing
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For love or_money_loyalty_research_2015

  1. 1. Consumer research study taking the pulse on Australian loyalty programs and their impact on customer loyalty
  2. 2. 2 © COPYRIGHT TO DIRECTIVITY AND CITRUS Welcome to ‘for love or money 2015’; the Australian research report that takes the pulse on trends, changes and provides new insights into consumers’ relationships with loyalty programs and their impact on customer loyalty.
  3. 3. 3© COPYRIGHT TO DIRECTIVITY AND CITRUS Contents 1.0 Introduction - welcome to ‘for love or money 2015’ 4 2.0 Research methodology and profile of participants 8 3.0 Executive summary of key findings trends and new insights 10 4.0 Findings in detail 18 4.1 Tracking the pulse of change to benchmark results from 2013 and 2014 18 4.2 Revealing 9 new insights that impact on brand loyalty and loyalty program success 46 4.3 28 Australian loyalty programs reviewed 62 5.0 Behind the research - the people who love loyalty 68 Copyright © 2015 to Directivity and Citrus ‘for love or money 2015’ Consumer Study into Australian loyalty programs and customer loyalty is for single use only. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic or mechanical including photocopy or printing without the prior permission in writing from the copyright owners, nor be otherwise circulated in any form of binding or cover other than that in which it is published and without a similar condition including this condition being imposed on the subsequent publisher. No responsibility for loss occasioned to any person acting or refraining from the action as a result of the material in this publication can be accepted by the authors.
  4. 4. 1.0 Welcome to ‘for love or money 2015’ Introduction S S
  5. 5. 5© COPYRIGHT TO DIRECTIVITY AND CITRUS Directivity and Citrus together with First Point Research and Consulting are pleased to release our in-depth research report into consumers’ relationships with loyalty programs and customer loyalty in Australia. This is our third research report to follow previous research reports available at www.theloyaltypoint.com.au What’s different in this report that will make a difference to your brand or business? Three goals were set for this 2015 research study: 1. To track the pulse of change to benchmark results The 2015 research study is the first of its kind to benchmark results from the 2013 ‘For love or money’ research study and some of the insights from the 2014 ‘Share the Love’ study. It identifies the pulse of change in results and insights that impact on loyalty programs and customer loyalty including: • Volume of memberships • How active members are (huge change) • Benefits members want • Card vs mobile app And more ... 2. To reveal new insights that impact on brand loyalty and loyalty program success It highlights 3 new areas and 9 new insights that impact on the lifeblood of loyalty program success and the influence on members’ buying behaviour and brand loyalty. It reveals answers to questions such as:- • Do members think brands need a loyalty program to keep their customers loyal? (the results are fascinating for certain age groups) • Do members purchase items that they do not need because of a loyalty program? (the hidden profit driver of programs) • Do members want benefits for interacting with the brand through the program such as for answering surveys, opening emails and others? (moving from transaction to interaction) And more! 3. To review 28 Australian loyalty programs For the first time in our research studies, we provided members with a list of 28 randomly selected Australian loyalty programs to give members the opportunity to identify: • Which programs they were a member of; • How active they are in these programs; and • Their view on whether it is a poor or excellent program. The results are surprising! 1 For love or MONEY? 2013 Consumer Study into Australian Loyalty Programs 1© Copyright to Directivity and Citrus 2014 Consumer Study into Australian Loyalty Programs Share the love Thank you for your interest in ‘for love or money 2015’
  6. 6. 6 © COPYRIGHT TO DIRECTIVITY AND CITRUS Australian loyalty programs reviewed MYER one Amcal Rewards Millers Fashion Spotlight VIP myDanMurphy’s ANZ Rewards Big4 Loyalty Club Katies Fashion Club Vintage Cellars Wineclub Accor Hotels – Le Club Coles – flybuys Rays Outdoors Virgin – Velocity Kathmandu Summit Club Hoyts Rewards Commonwealth Bank awards program The Coffee Club VIP Boost VIP Thirsty Camel – Hump Club Starwood Preferred Guest Supercheap Auto Priceline – Sisterclub Country Road – VIP cardholder Village Movie Club Woolworths – Everyday Rewards Qantas Frequent Flyer Rebel Westpac Altitude Rewards Note. The authors of this research study have no vested interest in any of the listed loyalty programs. They were chosen randomly from the Australian loyalty program market place. The 28 loyalty programs were also randomly presented in the research to avoid bias of selection. As you continue to enhance and build loyalty program success or are seeking to improve your customer interactions and overall brand loyalty, then ‘for love or money 2015’ will give you the results, observations and insights to guide you along that journey. Adam Posner CEO Peter Noble CEO
  7. 7. 7© COPYRIGHT TO DIRECTIVITY AND CITRUS
  8. 8. 2.0 Research methodology and profile of participants Who gave their point of view?
  9. 9. 9© COPYRIGHT TO DIRECTIVITY AND CITRUS Research methodology and profile of participants The research was conducted independently by First Point Research and Consulting in the first quarter of 2015, through an online panel of Australian consumers (men and women aged 18 years +) who are all members of at least one loyalty program. The research was structured to gain quantitative results with comparative analysis. Free form questions were included to gain actual feedback and comments from loyalty members. The total sample of N=1367, provides a margin of error of +/- 3% at a 95% level of confidence. Broad quotas were set for age & gender. 2013 52% 48% part of NSW 18% 35% 25% 3% 9% 10% part of NSW 17% 30% 25% 3% 8% 16% 2015 60% 40% 16-24 25-34 35-44 45-54 55-64 65+ 9% 29% 21% 16% 17% 8% YEARS 18-24 25-34 35-44 45-54 55-64 65+ 6% 18% 18% 19% 20% 19% YEARS Gender State Age A note on this tracking study A consumer tracking study is generally designed to ‘track’ any shifts in consumer sentiment or behaviour over time. They are sometimes conducted ‘continuously (i.e. daily or weekly), or may be ‘ad-hoc’ or periodic measures, as is the case with this series of Loyalty studies. Tracking studies are generally conducted with large sample sizes so that the data is reliable and robust and conclusions can be drawn confidently about any statistically significant shifts in response to questions from one point to another. The sample size is an important indicator of the confidence we can have in the data. With a sample of around 1,000 Australians in our studies, we expect the results to deliver the same result (within +/- 3% of the observed result) on 95% of occasions. The implication of a sample with a 95% confidence interval is that the results, assuming identical questions, WILL and SHOULD be very similar from one period to another. This is an indicator of high data integrity. Any significant shift in results can be attributed to a genuine shift in consumer sentiment or behaviour that is likely to be reflection of one of many factors including (but not limited to): A change in the economy (eg. Higher interest rates or rise in unemployment rates); A change in competitive conditions (eg. new arrivals in the market place); A change in marketing or advertising activity (a new product, innovation or campaign highlighting new features or USP).
  10. 10. of key findings, trends, results and new insights Executive summary 3.0 S S
  11. 11. 11© COPYRIGHT TO DIRECTIVITY AND CITRUS A summary of trends, results and insights from 2015 … ?
  12. 12. 12 © COPYRIGHT TO DIRECTIVITY AND CITRUS Immediate price discounts when making purchases Point based programs that allow members to redeem ‘points’ for vouchers, products or other rewards 78% 77% 77% % Very Important/Important % Very Important/Important 2015 2013 1. Tracking changes in the Australian loyalty landscape Membership of loyalty programs • In 2015, 84% of Australian’s are enrolled in at least one loyalty program (2013=88%) • Average no. of memberships in 2015=3.8 (4.0 in 2013) • 59% of members indicate they are active in ALL of the programs they are enrolled in, an incremental increase of 31% since 2013. Men are more active than ever before. (active = member presented their card or membership number when making purchases or accruing benefits in the last 12 months) Behaviours & attitudes • Programs continue to be valuable to business, with 82% of members indicating they tend to buy more from companies whose programs they are a member of (80% in 2013). • Programs are still a competitive advantage with 55% of members indicating they tend to buy from companies with a program. • Over a quarter (26%) of members believe that loyalty programs just don’t seem to understand how to communicate appropriately. 80% • Tears for tiers – tiered programs are the least preferred benefit by members 36% (same as 2013) Different levels of reward based on different levels of spending (eg Gold, Silver and Bronze membership tiers) 36% 36% Program benefits • Money still matters and points for purchase still pleases ?
  13. 13. 13© COPYRIGHT TO DIRECTIVITY AND CITRUS Who’s doing a good job? 97 loyalty programs were mentioned unprompted by members as doing a very good job (see the list on page 39) and whilst the top 3 remain the same, there has been some movement in the ranks, with two new entries. Q Can you tell us about a specific loyalty program that you think is doing a very good job? The 2013 top 10 most mentioned loyalty programs (unprompted) as doing a particularly good job Coles/flybuys Woolworths – everyday rewards Qantas Frequent Flyer MYER one Priceline – Sisterclub Virgin – Velocity CBA Credit Card IGA Millers Rewards Central Spotlight Other Programs None 37% 22% 11% 6% 5% 2% 1% 1% 1% 1% 1% <1% 12% Q Can you tell us about a specific loyalty program that you think is doing a very good job? The 2015 top 10 most mentioned programs (unprompted) as doing a very good job Coles/flybuys Woolworths – everyday rewards Qantas Frequent Flyer Virgin – Velocity MYER one Priceline – Sisterclub Millers Westpac Altitude Rewards Commbank Awards Hoyts Rewards Other Programs None 13% 6% 3% 2% 2% 1% 1% 1% 1% 13% 25% 33%
  14. 14. 14 © COPYRIGHT TO DIRECTIVITY AND CITRUS Member defection Member defection remains passive, with 22% stopping to participate in a loyalty program (slight improvement for 2013 which was 26%). There are many reasons for defection, these are two critical reasons: Remember: Defection from a program = defection from a brand I wasn’t earning points / rewards fast enough The rewards didn’t appeal to me 51% 59% 36% 40% 20142015 % Very Important/Important OMG! … the card wins again – you’re kidding! Members want the card – and this preference has had a remarkable increase. Getting the card into the wallet/purse is a critical piece of brand real-estate and connection! Card vs App …Would like a traditional card …Would like a mobile phone app 2015 20152014 2014 12%10% There has been a slight decrease in interest in using a MOBILE APP to interact with a program. 57%67%
  15. 15. 15© COPYRIGHT TO DIRECTIVITY AND CITRUS 2. Revealing new insights for loyalty program success Impact on brand loyalty Influence over buying behaviour Evolving program benefits58% of loyalty program members believe that brands need a loyalty program to keep their customers loyal. This jumps to 71% for under 34 yo. Members are wise to why brands have loyalty programs. Their top 3 reasons why brands have a program are: Loyalty programs do influence impulse purchases and buying behaviour with 16% of members having purchased items they did not need in order to earn or maintain program benefits (this jumps to 26% for men < 45 yo). Move your program from transaction to interaction! More than half of members (53%) want rewards for answering surveys. This is closely followed by opening emails (46%) & this jumps to 61% for under 35’s. Cash in the points 81% of members want cash based rewards. Members can wait for high value rewards 68% of members prefer higher value rewards that take a longer time to accumulate vs immediate lower value rewards. To keep you buying from them rather than the competitors To encourage you to buy from them more often To encourage you to spend more with them 69% 67% 63% ALL reasons ?
  16. 16. 16 © COPYRIGHT TO DIRECTIVITY AND CITRUS 3. Ranking of 28 Australian loyalty programs % rating as ‘Excellent’ Base: Respondents are ACTIVE members of the respective programs ANZ Rewards Westpac Altitude Rewards Coles flybuys The Coffee Club VIP Hoyts Rewards Comm Bank Awards Supercheap Auto Vintage Cellars Wine Club Country Road VIP Millers Fashion Woolworths Everyday Rewards Qantas Frequent Flyer Amcal Rewards MYER one Rays Outdoors Boost VIP Virgin Velocity Priceline Sisterclub Spotlight VIP myDanMurphy’s Katies Fashion Club Kathmandu Summit Club Accor hotels – Le Club Rebel Sport Village Movie Club 51% 50% 46% 46% 45% 44% 43% 40% 37% 36% 34% 34% 34% 33% 33% 32% 31% 29% 26% 26% 23% 23% 21% 17% 16% Banks are getting it right! The loyalty programs of two major banks are given strong endorsement by members Flybuys rated much higher than Everyday Rewards. Country Road leads the field in the fashion stakes Hoyts Rewards rated much higher than Village Movie Club Q. Looking still at the programs you are an active member of, indicate the impression you have of that program based on your own experiences. Scale from 1 (poor) to 7 (excellent) Members impression on overall quality... from poor to excellent For the first time in our research studies, we provided members with a list of 28 randomly selected Australian loyalty programs to give members the opportunity to identify: • which they were a member of • how active they are in these and • their view on whether it is a poor or excellent program. Top 25
  17. 17. 17© COPYRIGHT TO DIRECTIVITY AND CITRUS 17© COPYRIGHT TO DIRECTIVITY AND CITRUS
  18. 18. 4.1 Tracking the pulse of change to benchmark results from 2013 and 2014 studies Findingsindetail 4.0 1 For love or MONEY? 2013 Consumer Study into Australian Loyalty Programs 1© Copyright to Directivity and Citrus 2014 Consumer Study into Australian Loyalty Programs Share the love
  19. 19. 19© COPYRIGHT TO DIRECTIVITY AND CITRUS Tracking the pulse of change to benchmark results from 2013 & 2014 ?
  20. 20. 20 © COPYRIGHT TO DIRECTIVITY AND CITRUS Membership of a loyalty program In 2015, 84% of Australians over 18 yo are enrolled in at least ONE loyalty program. 2015 2013 Average number of program memberships On average, in 2015 Australians recall being enrolled in almost FOUR different programs, with no significant change since 2013. 2013: 88% of Australian consumers over the age of 16 were members of a loyalty program 2015 Membership of loyalty programs 3.88
  21. 21. © COPYRIGHT TO DIRECTIVITY AND CITRUS 21 The lovers of loyalty programs are becoming more selective Interestingly the 2015 study identified that 8% of members belong to 10 or more programs, which is down from 11% in 2013. This indicates that members who love loyalty programs are becoming more discerning about the programs they will sign up to. 8% of members belong to 10 or more programs belong to 10 or more programs 10+ men women 10+ 9%3% Membership of loyalty programs
  22. 22. 22 © COPYRIGHT TO DIRECTIVITY AND CITRUS WOMEN 2013 4.7 With only a slight decrease in memberships for both men and women, it is still clear that women have more memberships, however MEN are more actively engaged with their programs than women (see page 23) Male vs female 2015 vs 2013 - Gender WOMEN 2015 4.4 MEN 2013 3.3 MEN 2015 3 Membership of loyalty programs
  23. 23. 23© COPYRIGHT TO DIRECTIVITY AND CITRUS Youth are moving up Younger members (less than 45 years) are starting to trend up in the number of programs they belong to. 2015 vs 2013 - AGE 2015 - Gender and Age WOMEN under 45yrs WOMEN over 45yrs 3.9 5 MEN under 45yrs MEN over 45yrs 3.5 2.8 20132015 Under 24yrs 25-34yrs 35-44yrs 45-54yrs 55-64yrs 65+ yrs 4.1 4 4.5 4.3 4.4 4.2 3.4 3.8 3.3 3.8 3.6 3.7 More programs for women < 45 yo Women generally, but specifically women aged under 45 years tend to enrol in more loyalty programs. Membership of loyalty programs
  24. 24. 24 © COPYRIGHT TO DIRECTIVITY AND CITRUS Active engagement in ALL programs increases! Members are far more engaged with their programs in 2015. Overall there has been a significant improvement since 2013 in the ability of Australian loyalty programs to maintain member activity and engagement. 59% of members indicated they are active in ALL of the loyalty programs they are enrolled in – an incremental increase of 31% since 2013! Q Still thinking about those loyalty programs that you are a member of, approximately how many of them are you an active member of (i.e. you present the card or membership number when making purchases or accrue benefits through the program) in the last 12 months. 2015 vs 2013 Base: Total sample n= 1367 All of them Most of them About half of them Not many of them None of them 45%59% 30%24% 15%11% 9%5% 1%1% 20132015 Membership of loyalty programs
  25. 25. 25© COPYRIGHT TO DIRECTIVITY AND CITRUS 2015 vs 2013 = A massive jump in activity in programs for men and women. 31% incremental1 increase in activity by men in all of their programs since 2013 37% incremental increase in activity by women in all of their programs since 2013 Base: Total sample n= 1367 2013 Members of a loyalty program n= 884 WOMEN 2013 41% MEN 2013 49% 2015 WOMEN 2015 56% MEN 2015 64% Membership of loyalty programs (from 49% in 2013 to 64% in 2015) (from 41% in 2013 to 56% in 2015) 1. Incremental increase is the difference between 2015 and 2013 as a percentage of the base of 2013. Example: MEN 2013 = 49% and 2015 = 64%. Difference is 15%, however incremental increase is 15% / 49% = 31%
  26. 26. 26 © COPYRIGHT TO DIRECTIVITY AND CITRUS Men vs women: As was the pattern in 2013, men tend to be more active and committed to their loyalty programs than women Men, men, men = love loyalty programs! With fewer memberships than women (4.4), men (3.0) are far more engaged in all of their programs, than women. Level of activity (2015) Q Still thinking about those loyalty programs that you are a member of, approximately how many of them are you an active member (i.e. you present the card or membership number when making purchases or accrue benefits through the program) in the last 12 months. 2015 - Base: Total sample n= 1367 WomenMen Active in all of them Active in most Active in about half Not active in many Not active at all 64% 56% 18% 27% 11% 11% 6% 5% 1% 1% Membership of loyalty programs
  27. 27. 27© COPYRIGHT TO DIRECTIVITY AND CITRUS 2015 - Base: Total sample n= 1367 Mature age women and men (over 45 years) are typically more active than younger people. Older men are most active 59% 67% 60% 51% WOMEN over 45yrs WOMEN under 45yrs MEN under 45yrs MEN over 45yrs Q Still thinking about those loyalty programs that you are a member of, approximately how many of them are you an active member (i.e. you present the card or membership number when making purchases or accrue benefits through the program) in the last 12 months. Total Female Under 45 years Female 45 years+ Male Under 45 years Male 45 years+ Active in all of them 59% 51% 60% 59% 67% Active in most 24% 31% 23% 22% 16% Active in about half 11% 13% 10% 12% 9% Not active in many 5% 4% 6% 6% 7% Not active at all 1% 1% 1% 1% 2% Membership of loyalty programs
  28. 28. 28 © COPYRIGHT TO DIRECTIVITY AND CITRUS 2015 - Base: Total sample n= 1367 Are loyalty programs still valuable to a business? Q Listed above are a number of things other people have shared with us about how they feel about loyalty programs generally. Using the scale below, please indicate to what extent you agree or disagree with each one. I tend to buy more from the companies whose program I am a member of When choosing between two similar companies, I tend to buy from one that has a loyalty program Loyalty programs have improved a lot in recent years and tend to offer good benefits to members I tend to feel more loyal to the company/ brand when I am a member if their program Most loyalty programs don’t offer me any real value Most loyalty programs just don’t seem to understand how to communicate appropriately with their members %Agree/Strongly Agree YES, members buy more! In 2015, 82% of members said they tend to buy more from the companies whose program they are a member of verses 80% for 2013. YES, loyalty programs are a competitive advantage With so much choice available it’s clear that those companies with a program still have a competitive advantage over those that don’t. With no change since 2013, 55% of members still tend to buy from a company that has a program over a similar kind of company that does not. 82% 80% 55% 48% 47% 38% 26% 55% 41% 46% 40% 27% YES! 2015 2013 Behaviours & attitudes
  29. 29. 29© COPYRIGHT TO DIRECTIVITY AND CITRUS Loyalty programs are improving! Members are seeing improvements in loyalty programs (although there is still lots of room for growth). The 2015 study reveals that 48% of members tend to feel programs have improved and this is a 17% incremental increase on 2013 results. So companies and brands are beginning to get the message that programs do need to be meaningful to members and provide benefits that members want their loyalty. But please don’t relax ... there is more to customer loyalty than a program While a program drives increased spend and is a competitive advantage, a loyalty program still does not equal customer loyalty. With a very small change since 2013, only 47% of members tend to feel more loyal to a company/brand when they belong to their program. I tend to buy more from the companies whose program I am a member of When choosing between two similar companies, I tend to buy from one that has a loyalty program Loyalty programs have improved a lot in recent years and tend to offer good benefits to members I tend to feel more loyal to the company/brand when I am a member if their program Most loyalty programs don’t offer me any real value Most loyalty programs just don’t seem to understand how to communicate appropriately with their members %Agree/Strongly Agree 82% 80% 55% 48% 47% 38% 26% 55% 41% 46% 40% 27% 2015 2013 2015 - Base: Total sample n= 1367 Q Listed above are a number of things other people have shared with us about how they feel about loyalty programs generally. Using the scale below, please indicate to what extent you agree or disagree with each one. Behaviours & attitudes
  30. 30. 30 © COPYRIGHT TO DIRECTIVITY AND CITRUS And... programs can still be even more valuable! It is nice to see that there has been a decline (if only very slight) in the view that programs DON’T offer any real value. Programs are still NOT performing with communication Over a quarter of members (26%) believe that most loyalty programs just don’t seem to understand how to communicate appropriately. Driving relevant and personal communications is still a great opportunity for programs to improve. Q Listed above are a number of things other people have shared with us about how they feel about loyalty programs generally. Using the scale below, please indicate to what extent you agree or disagree with each one. I tend to buy more from the companies whose program I am a member of When choosing between two similar companies, I tend to buy from one that has a loyalty program Loyalty programs have improved a lot in recent years and tend to offer good benefits to members I tend to feel more loyal to the company/ brand when I am a member if their program Most loyalty programs don’t offer me any real value Most loyalty programs just don’t seem to understand how to communicate appropriately with their members %Agree/Strongly Agree 82% 80% 55% 48% 47% 38% 26% 55% 41% 46% 40% 27% 2015 2013 2015 - Base: Total sample n= 1367 Behaviours & attitudes
  31. 31. 31© COPYRIGHT TO DIRECTIVITY AND CITRUS Total Male Under 45 years Female Under 45 years Male 45 years+ Female 45 years+ I tend to buy more from the companies whose program I am a member of 82% 84% 89% 79% 79% When choosing between two similar companies, I tend to buy from one that has a loyalty program 55% 54% 60% 48% 55% Loyalty programs have improved a lot in recent years and tend to offer good benefits to members 48% 48% 54% 40% 50% I tend to feel more loyal to the company/brand when I am a member if their program 47% 53% 54% 38% 46% Most loyalty programs don’t offer me any real value 38% 43% 35% 44% 34% Most loyalty programs just don’t seem to understand how to communicate appropriately with their members 26% 32% 24% 32% 22% Women under 45 years are the greatest advocates of loyalty programs Younger women are far more likely to agree that they: • Buy more from companies with a loyalty program; • See great improvement in loyalty programs in recent years; and • Feel more loyal to brands if they are a member of their program. 2015 - Base: Total sample n= 1367 Behaviours & attitudes
  32. 32. 32 © COPYRIGHT TO DIRECTIVITY AND CITRUS Total Male Under 45 years Female Under 45 years Male 45 years+ Female 45 years+ I tend to buy more from the companies whose program I am a member of 82% 84% 89% 79% 79% When choosing between two similar companies, I tend to buy from one that has a loyalty program 55% 54% 60% 48% 55% Loyalty programs have improved a lot in recent years and tend to offer good benefits to members 48% 48% 54% 40% 50% I tend to feel more loyal to the company/brand when I am a member if their program 47% 53% 54% 38% 46% Most loyalty programs don’t offer me any real value 38% 43% 35% 44% 34% Most loyalty programs just don’t seem to understand how to communicate appropriately with their members 26% 32% 24% 32% 22% Men over 45 years are the least in favour of loyalty programs They are: • Less than other members to see great improvement in loyalty programs in recent years; • Less likely to be more loyal to brands if they are a member of their program. 2015 - Base: Total sample n= 1367 Behaviours & attitudes
  33. 33. 33© COPYRIGHT TO DIRECTIVITY AND CITRUS In 2015 some program benefits are moving up the ranks There have been some movements in the ranking of benefits that members consider to be very important from 2013 to 2015. Exclusive offers jumps to 3rd place from 4th in 2013… members want to feel more special! Programs with benefits for members accrued from partnerships with other businesses jumps to 5th place from 6th in 2013 which means that members want more opportunities to earn rewards outside of the business whose program they belong to. 2013 - Base: n=884 2015 ranking 2013 ranking Immediate price discounts when making purchases 78% 80% Point based programs that allow members to redeem ‘points’ for vouchers, products or other rewards 77% 77% Exclusive offers available to members only 66% 64% Surprise gifts or surprise rewards that arrive without you making a redemption 64% 67% Partnerships with other businesses/brands that can increase the opportunity to accrue rewards or points 61% 61% Access to more rewards based on the more you spend with the company 59% 62% Sending me information that is tailored and personal to me 51% 51% Updates on relevant news about the company and its products or services 37% 37% Different levels of reward based on different levels of spending (eg Gold, Silver and Bronze membership tiers) 36% 36% %Agree/Strongly Agree 2015 -Base: Total sample n= 1367 1 2 3 4 5 6 7 8 9 1 2 4 3 6 5 7 8 9 Behaviours & attitudes
  34. 34. 34 © COPYRIGHT TO DIRECTIVITY AND CITRUS Money still matters and points for purchase still pleases It’s clear that transactional benefits are still what members want. Immediate price discounts when making purchases Point based programs that allow members to redeem ‘points’ for vouchers, products or other rewards Exclusive offers available to members only Surprise gifts or surprise rewards that arrive without you making a redemption Partnerships with other businesses/brands that can increase the opportunity to accrue rewards or points Access to more rewards based on the more you spend with the company/brand Sending me information that is tailored and personal to me Updates on relevant news about the company and its products or services Different levels of reward based on different levels of spending (eg Gold, Silver and Bronze membership tiers) 78% 77% 66% 64% 59% 61% 51% 37% 36% 80% 77% 64% 67% 62% 61% 46% 37% 36% Q Loyalty programs tend to offer a range of different features and benefits. Looking at this list above, please indicate how important each of the following features of a loyalty program are to you. % Very Important/Important 2015 2013 2015 - Base: Total sample n= 1367, 2013 Base: n= 884 Program benefits
  35. 35. 35© COPYRIGHT TO DIRECTIVITY AND CITRUS Loyalty programs take note #1 Stop blasting communications and be more relevant. 2015 shows an incremental increase of 11% since 2013 of members who want relevant and tailored information! Loyalty programs take note #2 Stop telling members how great you are! 2015 shows that members STILL do not find updates on relevant news about the company as important. Loyalty programs take note #3 Tears for tiers. Tiered programs are still not an important feature for members. Immediate price discounts when making purchases Point based programs that allow members to redeem ‘points’ for vouchers, products or other rewards Exclusive offers available to members only Surprise gifts or surprise rewards that arrive without you making a redemption Partnerships with other businesses/brands that can increase the opportunity to accrue rewards or points Access to more rewards based on the more you spend with the company/brand Sending me information that is tailored and personal to me Updates on relevant news about the company and its products or services Different levels of reward based on different levels of spending (eg Gold, Silver and Bronze membership tiers) 78% 77% 66% 64% 59% 61% 51% 37% 36% 80% 77% 64% 67% 62% 61% 46% 37% 36% Q Loyalty programs tend to offer a range of different features and benefits. Looking at this list above, please indicate how important each of the following features of a loyalty program are to you. % Very Important/Important2015 2013 2015 - Base: Total sample n= 1367, 2013 Base: n= 884 Program benefits
  36. 36. 36 © COPYRIGHT TO DIRECTIVITY AND CITRUS Give women surprise rewards and you will be rewarded Younger women do like surprise gifts and rewards Men over 45 yo are less keen than women for surprise gifts or rewards... which is a bit surprising! Total Male Under 45 years Female Under 45 years Male 45 years+ Female 45 years+ Immediate price discounts when making purchases 78% 73% 80% 74% 81% Point based programs that allow members to redeem ‘points’ for vouchers, products or other rewards 77% 70% 83% 70% 80% Exclusive offers available to members only 66% 62% 70% 61% 69% Surprise gifts or surprise rewards that arrive without you making a redemption 64% 60% 72% 54% 68% Partnerships with other businesses/brands that can increase the opportunity to accrue rewards or points 61% 59% 61% 58% 65% Access to more rewards based on the more you spend with the company/brand 59% 57% 63% 54% 60% Sending me information that is tailored and personal to me 51% 49% 51% 46% 54% Updates on relevant news about the company and its products or services 37% 38% 35% 36% 40% Different levels of reward based on different levels of spending (eg Gold, Silver and Bronze membership tiers) 36% 41% 37% 32% 34% Program benefits 2015 - Base: Total sample n= 1367
  37. 37. 37© COPYRIGHT TO DIRECTIVITY AND CITRUS Make your points programs more meaningful to men Men are less likely to prefer points based programs. If you are planning a program with points and your audience is primarily men, think carefully on how to make it meaningful to them. Total Male Under 45 years Female Under 45 years Male 45 years+ Female 45 years+ Immediate price discounts when making purchases 78% 73% 80% 74% 81% Point based programs that allow members to redeem ‘points’ for vouchers, products or other rewards 77% 70% 83% 70% 80% Exclusive offers available to members only 66% 62% 70% 61% 69% Surprise gifts or surprise rewards that arrive without you making a redemption 64% 60% 72% 54% 68% Partnerships with other businesses/brands that can increase the opportunity to accrue rewards or points 61% 59% 61% 58% 65% Access to more rewards based on the more you spend with the company/brand 59% 57% 63% 54% 60% Sending me information that is tailored and personal to me 51% 49% 51% 46% 54% Updates on relevant news about the company and its products or services 37% 38% 35% 36% 40% Different levels of reward based on different levels of spending (eg Gold, Silver and Bronze membership tiers) 36% 41% 37% 32% 34% Program Benefits
  38. 38. 38 © COPYRIGHT TO DIRECTIVITY AND CITRUS Top 10: Top 2 still battle it out flybuys still number 1, Everyday Rewards = number 2 (although it declined significantly since 2013) Since 2013 – MYER one and Priceline’s Sisterclub drop back a place to make way for Virgin’s Velocity which jumps to 4th. New entries to the top 10 are Westpac Altitude Rewards (8th) and Hoyts Rewards (10th). A huge increase in Other Programs mentioned doing a good job (2013 was1%; 2015 increased to 13%). The number of members who did not mention any program “doing a very good job” has jumped from 12% to 25%, which is a huge 100% increase, indicating that programs are still not making a remarkable impression on members for them to highlight them unprompted. Q Can you tell us about a specific loyalty program that you think is doing a very good job? The 2013 top 10 most mentioned loyalty programs (unprompted) as doing a particularly good job Coles/flybuys Woolworths – everyday rewards Qantas Frequent Flyer MYER one Priceline – Sisterclub Virgin – Velocity CBA Credit Card IGA Millers Rewards Central Spotlight Other Programs None 37% 22% 11% 6% 5% 2% 1% 1% 1% 1% 1% <1% 12% Base: n= 884 Q Can you tell us about a specific loyalty program that you think is doing a very good job? The 2015 top 10 most mentioned loyalty programs (unprompted) as doing a very good job Coles/flybuys Woolworths – everyday rewards Qantas Frequent Flyer Virgin – Velocity MYER one Priceline Millers Westpac Altitude Rewards Commbank Awards Hoyts Rewards Other Programs None 13% 6% 3% 2% 2% 1% 1% 1% 1% 13% 25% Base: n= 1385 members answered this question (some provided more than one program). Of these 1036 members mentioned a program(s) as doing a ‘very good’ job out of 97 unique programs that they provided unprompted. 33% Who is doing a good job?
  39. 39. 39© COPYRIGHT TO DIRECTIVITY AND CITRUS 97 loyalty programs were mentioned unprompted by members as doing a very good job 1 Asia Miles 2 Accor 3 Adelaide Unibar 4 Advantage Chemist 5 Amart Sports 6 Amcal 7 American Express 8 Amplify 9 ANZ Rewards 10 Autograph 11 Bakers Delight 12 Barossa Co-op 13 BCF Club 14 Bernardis 15 Boost 16 Booyah 17 Brumby's 18 Calvin Klein VIP 19 Chemplus Rewards 20 Choice Pharmacy 21 Cibo Coffee 22 Cinebuzz 23 Cmca 24 Co-op Store 25 Coffee Club 26* Coles flybuys 27* Comm Bank Rewards 28 Country Road 29 Crossroads 30 Crown 31 Cue 32 Dan Murphy's 33 Dendy Cinemas 34 Donut King 35 Dymocks 36 Easter 30 37 EB Games 38 Emirates Skywards 39* Everyday Rewards 40 Farmer Jack's 41 Gloria Jeans 42 Go Mastercard 43 Golden Chain 44 Guzman & Gomez 45 Hogs Breath Café 46* Hoyts Rewards 47 IGA 48 Jeans West 49 Katies Fashion Club 50 Kathmandu 51 Krisflyer 52 Kunara 53 Le-wrap 54 Lincraft 55 Lorna Jane 56 Lowes 57 Macdonalds coffee card 58 Mad Mex 59 Mastercard 60* Millers 61* MYER one 62 Nielsen HomeScan 63 Nike 64 NoniB 65 Petbarn 66 Petstock 67 Pharmacy Essentials 68 Pillowtalk VIP 69* Priceline Sisterclub 70* Qantas Frequent Flyer 71 RACQ 72 Restore Rewards 73 Rewards Central 74 Ritchies 75 Rivers 76 Salsa 77 San Churros 78 Spotlight 79 Starwoods 80 Sunshine Coffee 81 Super Cheap Auto 82 Sussan 83 Terry White Chemists 84 The Entertainment Book 85 LaManna Direct 86 The Village Cinemas 87 Thirsty Camel Hump Club 88 Toys R Us 89 TS14 Platinum Rewards 90 United Mileage Plus 91 US Airways Dividend Miles 92* Virgin Velocity 93 Veludos 94 Vintage Cellars 95* Westpac Altitude Rewards 96 Witchery 97 Zouki Coffee * Top 10 program Base: n= 1385 members answered this question and of these 1036 members mentioned a program(s) as doing a ‘very good’ job out of 97unique programs that they provided unprompted Q Can you tell us about a specific loyalty program that you think is doing a very good job? 97 programs listed in alphabetical order Who is doing a good job?
  40. 40. 40 © COPYRIGHT TO DIRECTIVITY AND CITRUS Why do members think they are doing a good job ANZ Rewards “It is the best I’ve used. By paying for everything I buy, where possible, with the card and then clearing the card balance each month I’m gaining $500 to $1000 in cash rewards cards annually at no cost and have been for something like 20 years.” Male 65 – 74 yo Priceline - Sisterclub “It actually rewards you! In several ways! You get 3% of your total spend back -and with no expiry date, lots of interim decent specials eg. 20% off all make-up for 2 whole days. Genuine price reductions. Affordable luxury fragrances etc..” Male 35 – 44 yo Everyday Rewards “Itssimplicity-presentyourcardwhenpaying,receive vouchersinthemaileveryfewmonthsoronceayear,use themonyournextshopatWoolworths.Noneedtoactivate emailoffers,remembertotake coupons,shoponparticular daysordecidewhattoredeempointsfor.” Female 45-54 yo Supercheap Auto “They credit back the difference if your product goes on special within 2 weeks.” Male 25 – 34 yo Qantas Frequent Flyer “Lotsofwaystoearnpointsand goodpointstorewardsratio. goodcommunicationwithout spammingandlotsofdeals” Male 18 – 24 yo Cinebuzz Rewards “Easytoearnpointsandredeem. It’s freetojoin&norenewalfees.Theydo not frequently‘shiftthegoalposts’.” Male 55 – 64 yo Boost “Very good use of Android apps and promotions.” Male 35-44 yo My Dan Murphy’s “You get great bargain products based on your preferences and what you buy.” Male 65 – 74 yo Flybuys “Very interactive and keeps me involved week by week. Others are very passive and wait for me to come to them.” Male 35 – 44 yo Virgin Velocity “Goodrewards,goodpartnerprograms, veryefficientcustomerservice,flexibility inusingaccruedpoints.” Male 35-44 yo Coles flybuys “They are generous.” Female 45-54 yo Millers “I have to shop anyway, so I collect points just for doing what I have to do. They often offer bonus points for buying certain products or for spending a particular amount. I can also do their monthly survey for extra points.” Male 35 – 44 yo MYER one “Lots of opportunities to save.” Male 35-44 yo Who is doing a good job?
  41. 41. 41© COPYRIGHT TO DIRECTIVITY AND CITRUS …would like a traditional card …would like a mobile phone app …would like both 12% 31% The card is still alive and kicking! With all the mobile hype, it is surprising to see how members still want the plastic and this preference has increased incrementally by 17% since 2014. Interest in using a mobile app to interact with a program has actually declined (albeit slightly) since 2013. Members want the card – and this preference has had a remarkable increase! Getting the card into the wallet/purse is a critical piece of brand real-estate and connection! 2015 2014 10% 23% Q Given an option for a physical membership card for your purse/wallet or a mobile phone app to interact with your loyalty program (i.e. to earn or redeem points), which would you prefer? 2015 - Base: Total sample n= 1367 Card vs App 57%67%
  42. 42. 42 © COPYRIGHT TO DIRECTIVITY AND CITRUS 2015 2015 2015 WOMEN over 45yrs WOMEN under 45yrs MEN under 45yrs MEN over 45yrs 76% 73% 47% 54% 73% 78% 41% 52% WOMEN over 45yrs WOMEN under 45yrs MEN under 45yrs MEN over 45yrs 38% 33% 16% 22% 36% 29% 17% 23% Preference for a traditional card has grown in all demographic segments The preference for both has declined across all segmentsInterest in using a MOBILE APP to interact with a program has actually DECLINED (albeit slightly) since 2013 Are our phones becoming as cluttered now as our wallets were? Interest in using a MOBILE APP to interact with a program is declining in the younger age groups, indicating there might be APP fatigue …Would like a mobile app 10% …Would like a traditional card 67% …Would like both 23% Q Given an option for a physical membership card for your purse/wallet or a mobile phone app to interact with your loyalty program (i.e. to earn or redeem points), which would you prefer? 20142015 20142015 20142015 WOMEN over 45yrs WOMEN under 45yrs MEN under 45yrs MEN over 45yrs 15% 13% 6% 19% 23% 6% 4%5% Card vs App
  43. 43. 43© COPYRIGHT TO DIRECTIVITY AND CITRUS Base: Total sample n= 1367 Base: Consumers who have defected Member defection remains passive Defection from loyalty programs has improved slightly, down to 22% in 2015 vs 26% in 2014. Remember: Defection from a program = defection from the brand! Q Have you stopped participating in a loyalty program that you had previously been an active member of in the last few years? Yes, I simply stopped participating Yes, I formally requested to be removed 20%18% 6%4% 2014 65 yrs +55-64 yrs45-54 yrs35-44 yrs25-34 yrs18-24 yrs 17% 15% 31% 21% 19% 21% 12% 14% 17% 20% 15%16% % who ‘simply stopped participating’ 2015 20142015 Defection from program The greatest improvement in defection is in young members, down from 31% in 2014 to 21% in 2015.
  44. 44. 44 © COPYRIGHT TO DIRECTIVITY AND CITRUS ‘Earn ‘n Burn’ rate is the major reason for defection and getting worse. I wasn’t earning points / rewards fast enough I no longer shop there or use their services The rewards didn’t appeal to me Too much of a hassle to participate There were too many cards in my wallet I chose to participate in other programs instead I was getting too many emails / mail from them They didn’t communicate with me enough I just forgot about it It was too confusing I was concerned about my privacy It felt like they knew too much about me 51% 59% 42% 42% 36% 40% 26% 25% 13% 23% 23% 16% 18% 16% 13% 13% 15% 14% 19% 12% 14% 9% 15% 8% In 2015, the ‘Earn ‘n Burn’ rate is still a major reason for defection and increasing to 59%, an incremental increase of 16% over 2014. Card clutter jumps by 77% In 2015, too many cards jumped to 23%, an incremental increase of 77%. So make sure your program is valuable enough to be in their wallet/purse! GREAT NEWS! Programs are getting simpler In 2015, ‘it was too confusing’ dropped by an incremental amount of 37% - which means brands are starting to simplify their programs. Privacy not so much of a concern In 2015, privacy concerns are reducing. Q Which of the following, if any, have contributed to you stopping participation in a loyalty program? Please select all that apply. Base: Consumers who have defected 20142015 Defection from program
  45. 45. 45© COPYRIGHT TO DIRECTIVITY AND CITRUS Some vocal points of view “The card simply didn’t work and the staff couldn’t have cared less when I sought their assistance.” “It was a pissant little scheme that gave about point nothing of a percent discount provided you purchased cackloads of product.” “Their customer service was awful.” “I only shopped with this company online, but their rewards could only be used in store.” “Points expired too quickly” Total Male Under 45 years Female Under 45 years Male 45 years+ Female 45 years+ I wasn’t earning points / rewards fast enough 59% 57% 56% 64% 60% I no longer shop there or use their services 42% 40% 43% 40% 44% The rewards didn’t appeal to me 40% 41% 35% 47% 40% Too much of a hassle to participate 25% 29% 24% 28% 20% There were too many cards in my wallet 23% 22% 25% 16% 24% I chose to participate in other programs instead 16% 17% 12% 19% 17% I was getting too many emails / mail from them 16% 21% 19% 16% 13% They didn’t communicate with me enough 15% 14% 11% 17% 17% I just forgot about it 14% 9% 19% 12% 15% It was too confusing 12% 16% 9% 16% 10% I was concerned about my privacy 9% 9% 8% 10% 8% It felt like they knew too much about me 8% 10% 5% 12% 5% Reasons members defect by age, with men over 45 more concerned with rewards appeal and not too concerned about card clutter Defection from program
  46. 46. 4.0 4.2 Revealing 9 new insights that impact on brand loyalty and loyalty program success Detailed findings
  47. 47. 47© COPYRIGHT TO DIRECTIVITY AND CITRUS We explored 3 key areas and reveal 9 new insights that impact on the lifeblood of loyalty program success and the influence on a members’ buying behaviour. 1. The impact that loyalty programs have on brand loyalty 2. The power of a loyalty program’s influence over buying behaviour 3. Evolving your loyalty program benefits based on members’ behaviour This research gets ‘under the skin’ of members to find out what makes their ‘loyalty’ heart beat. ?
  48. 48. 48 © COPYRIGHT TO DIRECTIVITY AND CITRUS The impact that loyalty programs have on brand loyalty Brand switching: Do loyalty programs have any influence on whether members switch brands? Loyalty programs do have an influence on brand switching, which means members are up for grabs! (Two sides to this coin = you can capture your competitors members and they can capture yours!) 28% of members have switched brands on at least one occasion to get more benefits from a loyalty program Men under 45 years are the most fickle and whose loyalty can be bought! 42% of men under 45 years have switched brands on at least one occasion to get more benefits from a loyalty program. This is significantly higher than any other segment! Insight for loyalty programs Keep a keen eye on your younger male segment and find reasons to keep them engaged in your program WOMEN over 45yrs WOMEN under 45yrs MEN under 45yrs MEN over 45yrs I have switched brands on at least one occasion to get more benefits from a loyalty program Base: Total sample n= 1367 % Strongly agree/ Agree 22%35% 42% 20% Impact on brand loyalty
  49. 49. 49© COPYRIGHT TO DIRECTIVITY AND CITRUS Connection of brand loyalty to loyalty programs: Is brand loyalty inherently connected to the strength of a loyalty program? WOMEN over 45yrs WOMEN under 45yrs MEN under 45yrs MEN over 45yrs 21% of members are connected to the brand through the strength of their loyalty program. I wouldn’t be loyal to a brand that didn’t have a strong loyalty program A strong loyalty program does play it’s part in keeping members loyal to a brand, particularly younger men. % Strongly agree/ Agree 21%24% 26% 17% Impact on brand loyalty
  50. 50. 50 © COPYRIGHT TO DIRECTIVITY AND CITRUS Do members think brands need a loyalty program to keep their customers loyal? Yes, loyalty programs are an important strategy to keeping customers loyal. Over half (58%) of loyalty program members believe that a brand needs a loyalty program to keep their customers loyal. ...that brands need a loyalty program to keep their customers loyal. “It’s nice to be rewarded for being loyal, and with so many companies out there that have loyalty programs, it’s easy to find another company that has a loyalty program and can price match a product” Female 35 – 44 yo nominated Jeanswest as a program doing a very good job “I feel good” Female 35 – 44 yo nominated The Coffee Club as a program doing a very good job “It’s a great way for customers to feel valued” Male 25 – 34 yo nominated Country Road as a program doing a very good job Impact on brand loyalty 58% 42% do believedon’t believe
  51. 51. 51© COPYRIGHT TO DIRECTIVITY AND CITRUS More reasons why members believe brands need a loyalty program “I think if consumers are loyal to a brand they should be rewarded in some way and a redemption scheme is a good way of rewarding loyal consumers.” Female 18 – 24 yo nominated QFF as a program doing a very good job “Genuine loyaltytobrandshasbecome a thingofthe past,due toinformation overload,socompaniesmustfindother waystogenerate ‘loyalty’.” Male 55 – 64 yo nominated Virgin’s Velocity Program as doing a very good job “Brands that offer Loyalty programs tend to be higher profile & motivated to seek customer loyalty.” Female 55 - 64 yo nominated Flybuys as a program doing a very good job “Itisencouragingtobegivenback somethingforchoosingabrand over others.” Female 45 -54 yo nominated Hoyts Rewards as the program doing a very good job “Just nice to be rewarded for loyalty.” Female 55 - 64 yo nominated Everyday rewards as a program doing a very good job “Because I could probably get the same thing for less money elsewhere.” Female 25 – 34 yo nominated Vintage Cellars as a program doing a very good job “I think it helps consumers keep a certain company in mind.” Female 65 – 74 nominated flybuys as a program doing a very good job “Keeps customers feeling like they’re part of the company” Male 25-34 yo nominated MYER one as a program doing a very good job “It’sthewayofthefuture.Those companieswithnoloyaltyprogramsare laggingbehind theircompetition.” Male 25 – 34 yo nominated QFF as a program doing a very good job Impact on brand loyalty
  52. 52. 52 © COPYRIGHT TO DIRECTIVITY AND CITRUS Younger members view loyalty programs as central to brand loyalty “These daystherearealways an alternative thatwillhavealoyalty programthatgivesthecustomermorefor theremoneythenthosethatdon’t” Female, 18-24 yo nominated Flybuys as a program doing a very good job “Because it will make people happy” Female, 18-24yo nominated San Churros as a program doing a very good job “It shows that the company cares and rewards loyal customers.” Male 25-34yo, nominated QFF as a program doing a very good job WOMEN over 45yrs 35-54 years WOMEN under 45yrs Under 34 years MEN under 45yrs 55+ years MEN over 45yrs 48%60%71% 52% 66% 67% 52% 71%of under 34 yrs believe that brands need a loyalty program to keep their customers loyal. Base: Total sample n= 1367 Base: Total sample n= 1367 Believe that brands need a loyalty program to keep customers loyal. Impact on brand loyalty
  53. 53. 53© COPYRIGHT TO DIRECTIVITY AND CITRUS And here’s why members don’t think brands need a program “A good company will find effective ways to connect with their customers without a loyalty program. Vintage cellars would probably get business from me regardless based on their regular discounting program. Qantas gets business from me regardless because they have acceptable legroom compared to the other domestic airlines (they are shitful in almost every other regard though, so I guess leg room is enough for me ...).” Male 45 – 54 yo “IfI reallylike abrandanditdoesn’toffera rewardsprogramI’dstill gothere.I’drather getexactlywhatI wantthangetadiscount onsomethingI don’twantasmuch.It’snice toreceivediscountsonthingsyouwouldhave paidthe full amountforanyway.” Male 18 – 24yo “Loyaltyshouldbeearntwithgood productsandservice.“Loyaltycards” are just a trick to harvest data and make consumersfeellockedin.” Male 18 – 24yo “Too long to get rewards.” Female 25 – 34yo “If the brand is good enough it should stand alone regardless of loyalty program.” Male 35 – 44yo “I think people will buy what they like regardless of the incentives.” Female 55-64yo “I think people will buy what they like regardless of the incentives.” Female 55-64yo “I don’tchoosethebrand becauseof the loyaltycard, I choosea brand based on reputation.” Male 25 – 34 yo “Goodquality and customerservice alonecangetloyalty.” Male 55-64yo “Freestuffisn’t theonly reason people becomeloyal, ethical behaviour as well as caring for all stakeholders a company has can keep customers moreloyal than economic loyalty wherethecustomer is only loyal for their own benefit.” Female 35 – 44 yo Impact on brand loyalty
  54. 54. 54 © COPYRIGHT TO DIRECTIVITY AND CITRUS Why do members think brands offer a loyalty program? When working out WHY your business/ brand needs a program, reflect on the members’ point of view and see if there is any alignment. Q We are interested in why you think brands offer loyalty programs. Please indicate how important you believe each of these factors are to a brand that offers a loyalty program to its customers (select as many as you think are important). To keep you buying from them rather than the competitors To encourage you to buy from them more often To encourage you to spend more with them To attract new customers To keep up with what their competitors are doing To collect your data so they can improve their own business To measure the impact of their own marketing To collect your data so they can give you more relevant offers and benefits To encourage you to recommend them to other people To recognise you as an important customer To reduce the need to discount prices 69% 67% 63% 53% 52% 51% 50% 47% 41% 40% 30% 1 2 3 Competitive advantage Buying more often Spending more Base: Total sample n= 1367 ALL reasons Impact on brand loyalty
  55. 55. 55© COPYRIGHT TO DIRECTIVITY AND CITRUS Most important reason brands offer a loyalty program Competitive advantage is the number one reason that members think brands offer a program. Interestingly, data comes in at 4th. Q And which of these do you believe is the single most important reason that a brand offers a loyalty program? To keep you buying from them rather than the competitors To encourage you to spend more with them To encourage you to buy from them more often To collect your data so they can improve their own business To recognise you as an important customer To attract new customers To collect your data so they can give you more relevant offers and benefits To keep up with what their competitors are doing To measure the impact of their own marketing To reduce the need to discount prices To encourage you to recommend them to other people 18% 11% 8% 4% 4% 3% 3% 2% 1% Base: Total sample n= 1367 MOST IMPORTANT reason 24% 23% Impact on brand loyalty
  56. 56. 56 © COPYRIGHT TO DIRECTIVITY AND CITRUS The power of a loyalty program’s influence over buying behaviour The inherent benefits that some programs provide are powerful enough to influence incremental impulse purchases – even if the item(s) purchased is not needed. Loyalty programs DO influence impulse purchases! If 16% of your loyalty member base purchased an extra item (that they would not normally) , then what is the total value of that towards your revenue? Total base (vol) x 16% x $extra item = $? Loyalty programs and impulse purchases: Do members purchase items that they do not need because of a loyalty program? 16% of members have purchased items they did not need, just to earn points or maintain program benefits. Younger men are more impulsive! 26% of men under 45 years have bought something they don’t really need in order to earn more points or maintain program benefits. Again much higher than any other segment! I have bought something I didn’t really need in order to earn points or maintain program benefits MEN under 45yrs WOMEN under 45yrs WOMEN over 45yrs MEN over 45yrs 11%21% 26% 8% % Strongly agree/ Agree Influence over buying behaviour
  57. 57. 57© COPYRIGHT TO DIRECTIVITY AND CITRUS Evolving your loyalty program benefits based on members’ behaviour Points for purpose: Do members want opportunities to donate or redeem points/ rewards or vouchers to charities or local community initiatives? Give members ‘Points for Purpose’ Over a quarter of members of loyalty programs (27%) want to donate or redeem their points/rewards to charities or local community initiatives. Which means that programs should consider providing this as an option for their members. 27% Opportunities to donate or redeem my points/rewards or vouchers to charities or a local community initiative Evolving loyalty program benefits
  58. 58. 58 © COPYRIGHT TO DIRECTIVITY AND CITRUS From transaction to interaction: Do members want benefits for interacting with the brand through the program such as for answering surveys, opening emails and others? Evolve your program’s benefits from transaction to interaction There is keen interest in non-transactional rewards. Completing surveys and opening emails are the best opportunity for additional engagement. Programs need to move from one-dimensional “transaction-based” rewards by adding “interaction-based rewards” as a deeper way to engage members. Rewards offered for answering surveys from the loyalty program Rewards offered for opening emails from the loyalty program Rewards offered for attending specific events Rewards offered for referring friends to the program Rewards offered for sharing information about the program on social media % Very Interested/Interested 53% 46% 20% 18% 17% 2015 Q A number of alternatives are being considered by loyalty programs to reward Members for things other than spending money with them. Please use the scale below to indicate how interested you would be in each of these alternatives. Base: Total Sample n= 1367 Evolving loyalty program benefits
  59. 59. 59© COPYRIGHT TO DIRECTIVITY AND CITRUS Younger members are most inclined to take up the opportunities for ‘program interaction’ Total Under 35 years 35-54 years 55 years+ Rewards offered for answering surveys from the loyalty program 53% 55% 45% 40% Rewards offered for opening emails from the loyalty program 46% 61% 48% 51% Rewards offered for attending specific events 20% 31% 20% 13% Rewards offered for referring friends to the program 18% 25% 19% 13% Rewards offered for sharing information about the program on social media 17% 27% 18% 10% Base: Total Sample n= 1367 Evolving loyalty program benefits
  60. 60. 60 © COPYRIGHT TO DIRECTIVITY AND CITRUS Cash in the points: Do members want to accumulate cash rewards or accumulate points to redeem for non-cash rewards? It’s all about the money, money…81% of members want cash based rewards. This represents a CLEAR OPPORTUNITY for loyalty programs to ensure CASH based rewards is a benefit Strong preference across all segments for cash based rewards. Q Given an option within a loyalty program to accumulate cash rewards (or cash discounts) OR to accumulate points (that can be redeemed for non-cash rewards), what is your preference? 81% 19% Prefer CASH based Prefer POINTS based WOMEN over 45yrs WOMEN under 45yrs MEN under 45yrs MEN over 45yrs 81% 84% 75% 19% 16% 25% 20% 80% POINT based rewardsCASH based rewards Base: Total Sample n= 1367 Evolving loyalty program benefits
  61. 61. 61© COPYRIGHT TO DIRECTIVITY AND CITRUS Now vs the future: Do members want immediate lower value rewards or accumulate higher value rewards over a longer time? The prospect of accumulated, higher value rewards has most appeal. If you develop a program that has high value rewards that give members the opportunity to acquire over longer period you will win as they will spend and stay with your business longer! Members can wait for high value rewards and patience pays off! Q Given an option for ‘immediate rewards’ (eg. a discount or voucher of a relatively low value) OR rewards that take a longer time to accumulate (but are of much greater value), what is your preference? 68% 32% WOMEN over 45yrs WOMEN under 45yrs MEN under 45yrs MEN over 45yrs 65% 70% 62% 35% 30% 38% 28% 72% Prefer ACCUMULATED rewards Prefer IMMEDIATE based IMMEDIATE based rewards (lower value) ACCUMULATED rewards (higher value) Base: Total Sample n= 1367 Evolving loyalty program benefits VS
  62. 62. 4.0 4.3 - 28 Australian loyalty programs reviewed Detailed findings
  63. 63. 63© COPYRIGHT TO DIRECTIVITY AND CITRUS MYER one Amcal Rewards Millers Fashion Spotlight VIP myDanMurphy’s ANZ Rewards Big4 Loyalty Club Katies Fashion Club Vintage Cellars Wineclub Accor Hotels – Le Club Coles – flybuys Rays Outdoors Virgin – Velocity Kathmandu Summit Club Hoyts Rewards Commonwealth Bank awards program The Coffee Club VIP Boost VIP Thirsty Camel – Hump Club Starwood Preferred Guest Supercheap Auto Priceline – Sisterclub Country Road – VIP cardholder Village Movie Club Woolworths – Everyday Rewards Qantas Frequent Flyer Rebel Westpac Altitude Rewards 28 Australian loyalty programs reviewed For the first time in our research studies, we provided members with a list of 28 randomly selected Australian Loyalty programs to give members the opportunity to identify: • Which programs they are a member of • How active they are in these; and • Their view on whether it is a poor or excellent program. The results are surprising! Note. The authors of this research study have no vested interest in any of the listed loyalty programs. They were chosen randomly from the Australian loyalty program market place. The 28 loyalty programs were also randomly presented in the research to avoid bias of selection.
  64. 64. 64 © COPYRIGHT TO DIRECTIVITY AND CITRUS Ranking of 28 Australian loyalty programs based on membership Coles flybuys Woolworths Everyday Rewards Qantas Frequent Flyer MYER One Virgin Velocity Priceline Sisterclub Spotlight VIP Millers Fashion Comm Bank Awards Hoyts Rewards myDanMurphy’s Village Movie Club Boost VIP Katies Fashion Club Amcal Rewards Accor Hotels – Le Club Westpac Altitude Rewards Supercheap Auto Rebel Sport ANZ Rewards Kathmandu Summit Club Rays Outdoors The Coffee Club VIP Starwood Preferred Guest Vintage Cellars Wineclub Country Road VIP BIG4 Loyalty Thirsty Camel 73% 72% 52% 32% 29% 28% 21% 16% 8% 7% 7% 7% 7% 7% 6% 5% 5% 5% 5% 5% 4% 4% 4% 3% 3% 2% 1% 1% Program membership in Australia is skewed heavily towards flybuys and Everyday Rewards as well as the Qantas Frequent Flyer program. This is because of the extensive memberships that these programs have. Q Looking at the list, please indicate which loyalty programs, if any, you are a member of. % who are ENROLLED members Base: Total Sample n= 1367
  65. 65. 65© COPYRIGHT TO DIRECTIVITY AND CITRUS AustraliansareHIGHLYACTIVEwithintheprogramsthey haveenrolledinto(Top14/28) Member activity is highest when the opportunity to engage is frequent. Q Which of the programs you selected, if any, are you an active member of, i.e. you have presented your card or membership number when making a purchase in the last 12 months. % who are ENROLLED members % who are ACTIVE members Coles flybuys Woolworths Everyday Rewards Qantas Frequent Flyer MYER one Virgin Velocity Priceline Sisterclub Spotlight VIP Millers Fashion Comm Bank Awards Hoyts Rewards myDanMurphy’s Village Movie Club Boost VIP Katies Fashion Club 73% 72% 69% 32% 25% 72% 52% 32% 29% 15% 22% 14% 11% 7% 5% 6% 4% 5% 4% 28% 21% 16% 8% 7% 7% 7% 7% 7% Base: Total Sample n= 1367 Active = member has presented their card or membership number when making a purchase in the last 12 months.
  66. 66. 66 © COPYRIGHT TO DIRECTIVITY AND CITRUS Membersimpressiononoverallquality–frompoortoexcellent ANZ Rewards Westpac Altitude Rewards Coles flybuys The Coffee Club VIP Hoyts Rewards Comm Bank Awards Supercheap Auto Vintage Cellars Wine Club Country Road VIP Millers Fashion Woolworths Everyday Rewards Qantas Frequent Flyer Amcal Rewards MYER one Rays Outdoors Boost VIP Virgin Velocity Priceline Sisterclub Spotlight VIP myDanMurphy’s Katies Fashion Club Kathmandu Summit Club Accor hotels – Le Club Rebel Sport Village Movie Club 51% 50% 46% 46% 45% 44% 43% 40% 37% 36% 34% 34% 34% 33% 33% 32% 31% 29% 26% 26% 23% 23% 21% 17% 16% Banks are getting it right! The loyalty programs of two major banks are given strong endorsement by members Flybuys rated much higher than Everyday Rewards. Country Road leads the field in the fashion stakes Hoyts Rewards rated much higher than Village Movie Club % rating as ‘Excellent’ Q. Looking still at the programs you are an active member of, indicate the impression you have of that program based on your own experiences. Scale from 1 (poor) to 7 (excellent) Base: Respondents are ACTIVE members of the respective programs Top 25
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  68. 68. 5.0 The people who love loyalty programs Behind the research
  69. 69. 69© COPYRIGHT TO DIRECTIVITY AND CITRUS People behind the research Established in 2007, Directivity provides customer loyalty and retention strategies and programs for organisations operating in sectors as diverse as accommodation, leisure and entertainment, trade, education, manufacturing and retail. Adam Posner (CEO and founder) is one of Australia’s leading loyalty program strategists and has been a data-driven direct marketer for 23 years. He started his loyalty life in the mid ’90’s with a shopping centre loyalty program initiative called “Scratch & Save”. Since then he has been involved in a range of loyalty and retention programs from large retail programs such as the flybuys program re- launched in 2012 as well as developing financial ‘Return on Loyalty’ models for pharmacy, entertainment and large accommodation networks. Adam is also the author of one of Australia’s only practical book on loyalty programs – ‘Give-back to Get-back - 9 steps to a profitable loyalty program’ and is a frequent speaker on customer loyalty and retention. Citrus is a Retention Marketing Consulting firm focused on helping retailers & consumer brands to grow the size, engagement & value of their customer audiences through data-driven, personalised marketing automation programs across email, mobile, social and the web.  Peter Noble is the CEO & Head of Strategy for Citrus. With more than 17 years’ experience in the digital marketing space in Australia, Peter has lead the Citrus team to deliver world-class 1:1 marketing programs for leading brands such as Agoda, Yalumba, Seek, Coopers, adidas, TaylorMade, and the Victoria Racing Club, amongst others.  Peter is a passionate advocate of the power of loyalty programs to create long-term brand loyalty, particularly through digital communications across email, mobile, social media and the web. Peter has featured as a keynote speaker at many key marketing conferences around Australia and Asia and has featured in many articles discussing the importance of loyalty and retention programs to brands. Peter has been a member of the Australian Marketing Institute since 2002, and is a Certified Practising Marketer (CPM), the peak professional benchmark for marketers in Australia.
  70. 70. THE LOYALTY POINT www.theloyaltypoint.com.au Directivity Adam Posner t. 0433 818190 e. adam@directivity.com.au w. directivity.com.au Citrus Peter Noble Level 8, 100 Albert Road South Melbourne Victoria Australia 3205 t. +613 9681 5333 e. peter.noble@citrus.com.au w. citrus.com.au

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