Insights from the Maritz Motivation | Wise Marketer Loyalty Landscape Study
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70% of customer loyalty is constantly up for grabs. What does this mean for your business? Find out other key insights from the Maritz Motivation | Wise Marketer Loyalty Landscape Study.
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Insights from the Maritz Motivation | Wise Marketer Loyalty Landscape Study
- 1. 1 The Maritz | Wise Marketer Loyalty Landscape Study Top Insights from August 14, 2019
- 2. 2 Barry Kirk VP of Loyalty Strategy Maritz Motivation Bill Hanifin CEO The Wise Marketer Group
- 3. 3 ©MaritzMotivationInc.Proprietaryandconfidential. OUR METHODOLOGY Study participants identified as the purchase decision maker or key influencer in one or more of the following categories: 1. Banking Services (Personal checking, savings, loans, etc.) 2. Credit Card Services 3. Hotels (Room nights, etc.) 4. Airlines (Flights, etc.) 5. Restaurants 6. Specialty Retail Stores (i.e. sporting equipment, home goods, etc.)
- 4. Most brand loyalty is still bought, but experience-based loyalty is rising. 4 ©MaritzMotivationInc.Proprietaryandconfidential. While most consumer loyalty continues to be driven by price or offer, True Loyalty, founded on superior customer experience is gaining traction (+8% in popularity) at the expense of Mercenary Loyalty (down 7% in popularity).
- 5. 5 ©MaritzMotivationInc.Proprietaryandconfidential. The market is dominated by the Ephemerals –consumers who feel connected to brands, but whose devotion may be ever shifting. They share the world with the Unshakeables -- a much smaller, but highly desirable enclave of consumers who lock-in on their favorite brands and then rarely if ever stray from that decision. 70% of all consumer loyalty is constantly up for grabs.
- 6. 6 ©MaritzMotivationInc.Proprietaryandconfidential. Loyalty has a split personality. Are you more likely to purchase from a brand when active in their program? Unshakeables: 84% say “Yes” Ephemerals: 82% say “Yes” How important are those programs to your purchase decision-making? Unshakeables: 71% priority/very important Ephemerals: 52% priority/very important
- 7. 7 ©MaritzMotivationInc.Proprietaryandconfidential. Loyalty has a split personality. The Unshakeables are Insulated 66% say the chance to earn points influences them to ignore offers from competitors, versus only 47% of Ephemerals. The Unshakeables Provide Willing Inertia 2/3 agree that they would pay a fee to join a program versus just over 1/2 of Ephemerals. The Unshakeables Aren’t Price-War Scavengers While 45% of Ephemerals stated price as the primary reason they switch brands, that number was only 29% for Unshakeables.
- 8. 8 ©MaritzMotivationInc.Proprietaryandconfidential. Loyalty programs continue to be a strong influence on customer behavior. More than 8 in 10 consumers (82%) who participate in points- based programs agree they are more likely to purchase more often from a company when active in their program.. Over half (52%) agree that the chance to earn points influences them to ignore offers from competitor brands.
- 9. 9 ©MaritzMotivationInc.Proprietaryandconfidential. Loyalty programs continue to be a strong influence on customer behavior. Consumers reasonably expect companies to offer loyalty programs as a standard part of a great customer experience, ranking their influence secondary only to product/service quality.
- 10. 10 ©MaritzMotivationInc.Proprietaryandconfidential. Convincing consumers to open, read and act on marketing communications is always a challenge – except when that communication is about loyalty programs. This suggests that your program may be your most effective customer communications channel. Loyalty programs earn significant attention currency with consumers.
- 11. 11 ©MaritzMotivationInc.Proprietaryandconfidential. Of the 74% of Savers: 50% accumulate their points with a specific redemption in mind. 24% save points, but with no specific redemption goal. Saving points is as much an indicator of engagement as redemption is.
- 12. 12 ©MaritzMotivationInc.Proprietaryandconfidential. Redemption inactivity has long been viewed as a predictor of member disengagement. However, the trend now is decidedly towards members preferring to accumulate a bank of points, oftentimes saving them for a specific (and most likely sizeable) reward. Saving points is as much an indicator of engagement as redemption is.
- 13. 13 ©MaritzMotivationInc.Proprietaryandconfidential. Redemption experiences are falling short for 20% of consumers – in programs that are all about rewards! When effectively timed and communicated, a member’s reward experience should result in a positive “memory halo” that lasts well beyond the moment of redemption. When it comes to loyalty program rewards, 20% of consumers have amnesia.
- 14. 14 ©MaritzMotivationInc.Proprietaryandconfidential. The number of consumers willing to pay a program fee actually rose 10% over last year’s data, suggesting more companies should consider a fee as part of their program structure. Willingness to join a fee-based loyalty program is on the rise.
- 15. 15 15 ©MaritzMotivationInc.Proprietaryandconfidential. Many consumers are willing to be avengers, advocates and even defenders for their favorite companies. There is even a small percentage who will go to extremes to show their brand loyalty. How do customers show their loyalty? For some, there are almost no limits!
- 16. 16 ©MaritzMotivationInc.Proprietaryandconfidential. Industries Banking Services Credit Card Services Hospitality Hotels Airlines Restaurants Specialty Retail Stores The data and insights from this study go well beyond today’s overview, with rich insights that have filtered by industry, generation, gender and household income. Want a deeper diver? Reach out to barry.kirk@maritz.com Special Interest Areas Hospital/Patient Experience Financial Wellness Time Share Experience Subscription-Based Services Topics Top Drivers of Brand Loyalty Top Reasons for Brand Switching Loyalty Program Benefit Preferences Program Fee Receptivity Reasons for Program Disengagement Loyalty Profiles for: Amazon, Uber, Netflix, Starbucks, and more.
- 17. 17 The Maritz | Wise Marketer Loyalty Landscape Study Insights from August 14, 2019
- 18. 18 Stay Tuned For the Forthcoming Report, The Split Personality of Loyalty
Editor's Notes
- The AHA: - How consumers align to the Maritz Multi-Loyalty Framework showed an interesting shift this year. - While most consumer loyalty continues to be driven by price or offer, True Loyalty, founded on superior customer experience is gaining traction (+8% in popularity) at the expense of Mercenary Loyalty (down 7% in popularity). Barry’s Thought: While a traditional points-and-rewards program can still drive results, increasingly I see a need for brands to couple that with a customer or program experience that is unique, memorable and encourages emotional connection to your brand. My primary recommendation would be to try approaches that make your program less predictable – that will give members a reason to pay attention.
- The AHA: - A major challenge all brands face is that very little customer loyalty is locked in. - Yes, most consumers have their favorite brands, but the majority are also perpetually open to something better coming along. As a result, companies cannot take valuable customer segments for granted, or assume they are immune from attrition. But there is also good news in this insight – yes, your customers are vulnerable, but so are your competitors’ Barry’s Thought: Its critical to use both behavioral data and customer research to identify your own mix of Unshakeables and Ephemerals, as well as that of your competitors.
- The AHA: The Unshakeables are Insulated - 66% say the chance to earn points influences them to ignore offers from competitors, versus only 47% of Ephemerals. The Unshakeables Provide Willing Inertia - 2/3 agree that they would pay a fee to join a program versus just over 1/2 of Ephemerals. - The Unshakeables Aren’t Price-War Scavengers While 45% of Ephemerals stated price as the primary reason they switch brands, that number was only 29% for Unshakeables. For them, product quality, loyalty program benefits, and recommendations of family & friends hold increased weight. Barry’s Thought: Unshakeables are clearly the more attractive target for your loyalty strategy, BUT…the Ephemerals are a BIGGER target. You want more of the former, but you’ll need to go after the latter to build your membership. The trick will be identifying which of your customers is in each group, and put tactics in place to shfit more of your Ephemerals into Unshakeables.
- The AHA: The Unshakeables are Insulated - 66% say the chance to earn points influences them to ignore offers from competitors, versus only 47% of Ephemerals. The Unshakeables Provide Willing Inertia - 2/3 agree that they would pay a fee to join a program versus just over 1/2 of Ephemerals. - The Unshakeables Aren’t Price-War Scavengers While 45% of Ephemerals stated price as the primary reason they switch brands, that number was only 29% for Unshakeables. For them, product quality, loyalty program benefits, and recommendations of family & friends hold increased weight. Barry’s Thought: Unshakeables are clearly the more attractive target for your loyalty strategy, BUT…the Ephemerals are a BIGGER target. You want more of the former, but you’ll need to go after the latter to build your membership. The trick will be identifying which of your customers is in each group, and put tactics in place to shfit more of your Ephemerals into Unshakeables.
- The AHA: Consumers expect companies to offer loyalty programs as a standard part of a great customer experience, ranking their influence only secondary to product/service quality. Almost 60% rather them as very important or apriority to purchase decision-making Barry’s Thought: - There is constant discussion in the industry about whether loyalty programs as still relevant or even necessary. This statistic would strongly suggest they are. In fact, if you don’t already have a program, your customers are probably wondering “Why not?” You’re also losing out on identifying and retaining valued customers. - If you do have one, you should determine how well its living up to its potential to drive purchase decisions and to create resistance to competitive offers.
- The AHA: Consumers expect companies to offer loyalty programs as a standard part of a great customer experience, ranking their influence only secondary to product/service quality. Almost 60% rather them as very important or a priority to purchase decision-making Barry’s Thought: - There is constant discussion in the industry about whether loyalty programs as still relevant or even necessary. This statistic would strongly suggest they are. In fact, if you don’t already have a program, your customers are probably wondering “Why not?” You’re also losing out on identifying and retaining valued customers. - If you do have one, you should determine how well its living up to its potential to drive purchase decisions and to create resistance to competitive offers.
- The AHA - Convincing consumers to open, read and act on marketing communications is always a challenge – except when that communication is about loyalty programs. - Hopefully this is because customers have learned that loyalty messages are often more targeted and relevant to them as individual customers. - This suggest that your program may be your most effective customer communications channel. Barry’s Thought The next time you have a critical message or offer to get in front of your customers, think about presenting it under the brand of your loyalty offering where its far more likely to be noticed.
- - The AHA: Redemption inactivity has long been viewed as a predictor of member disengagement. However, the trend now is decidedly towards members preferring to accumulate a bank of points, oftentimes saving them for a specific (and most likely sizeable) reward. Barry’s Thought: - Rather than assume a non-redeeming member is at risk of churn, look instead to their overall level of spend and activity to build a more holistic assessment of their likely level of engagement. If a member is sitting on a pile of points AND is declining across other key behavioral metrics, that is the time to encourage them to redeem. Otherwise, you can assume its likely intentional. If you really want to know for sure, add a wish list so that you can know what the member is saving toward.
- - The AHA: Redemption inactivity has long been viewed as a predictor of member disengagement. However, the trend now is decidedly towards members preferring to accumulate a bank of points, oftentimes saving them for a specific (and most likely sizeable) reward. Barry’s Thought: - Rather than assume a non-redeeming member is at risk of churn, look instead to their overall level of spend and activity to build a more holistic assessment of their likely level of engagement. If a member is sitting on a pile of points AND is declining across other key behavioral metrics, that is the time to encourage them to redeem. Otherwise, you can assume its likely intentional. If you really want to know for sure, add a wish list so that you can know what the member is saving toward.
- The AHA: - Redeeming for a reward remains the core value prop of most loyalty programs, yet that aspect of the experience is falling short for 20% of consumers. When effectively timed and communicated, a member’s reward experience should result in a positive “memory halo” that lasts well beyond the moment of redemption, reinforcing their connection with the brand and their desire to start working toward their next reward. Barry’s Thought: This is most likely being driven by adequate communication around the reward redemption experience. A well-designed communication plan will build anticipation prior to redemption, and then reinforce that positive experience afterward.
- The AHA: - The number of consumers willing to pay a program fee rose 10% over last year’s data, suggesting more companies should consider a fee as part of their program structure. - It’s important to note, though, that many fee-friendly members are expecting an experience-based value prop, not just a financial one (although the financial aspect is the top rated driver) - So, while introducing a fee can provide a major benefit in funding program costs, companies need to be sure they can provide the kind of experience that justifies this upfront financial commitment by members. Barry’s Thought: - Fee-based options for your program makes sense to test, but I’d hesitate to make the entire program fee-based – yes, consumers saying they are receptive, but they likely need to be convinced that the program is worth first. Rather than put an immediate barrier to entry in place, I’d suggest making the lowest/entry level tier of your program free, but then test a “buy-up” option that allows members to pay for higher status and/or additional perks or access.
- The AHA: - Many consumers are willing to be avengers, advocates and even defenders for their favorite companies. There’s even a small group who admittedly will go to even higher measures to show their loyalty. Should note that 37% of respondents said they would do none of these things for their favorite brands, preferring a more passive loyalty - The important question is, “What would your customers do to show their loyalty and advocate for YOUR brand?” And, how will you know until you ask them? Barry’s Thought: Beyond the interesting outliers, the most interesting stat to me is the 43% who say they are willing to defend their favorite brand when someone says something negative about it. That’s the space you want to be in – when your loyalists are not just recommending in you, but defending you. The question you need to ask is, “Am I giving them a rationale to defend me?”