Stats & Facts On Loyalty Programs And Usage Data for 2013 / 2014


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An overview of the size and state of the loyalty and incentive program market in North America/USA in 2013/2014. Included in the deck are statistics and facts about market size, membership data, effectiveness, demographics and a section on mobile loyalty programs and digital rewards.

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Stats & Facts On Loyalty Programs And Usage Data for 2013 / 2014

  2. 2. THE  LOYALTY  &  INCENTIVES  MARKET  IS  HUGE   •  The North American Loyalty market is estimated to be $54 billion and growing at 20% per year (Raymond James) •  US companies spent $76.9 billion on incentives and promotions in 2012-2013. $22.7 billion is spent on incentive and loyalty gift cards alone (Incentive Marketing Association) •  There are over 2.5 billion loyalty memberships in the U.S. (Colloquy) •  Loyalty programs generate $48 billion in annual loyalty currency issuances which customers can redeem for goods or services (Colloquy) 2  
  3. 3. LOYALTY  MEMBERSHIP  IN  THE  U.S.  CONTINUES  TO  GROW   RAPIDLY   •  Nearly  90%  of  Americans  parDcipate  in  some  type  of  rewards  program  (BusinessWeek)   •  The  average  U.S.  household  belongs  to  ~22  loyalty  programs  –  not  all  acDve  though  (Colloquy)   •  71%  of  Loyalty  Members  have  room  for  more  cards  in  their  proverbial  loyalty  card  wallets  (Maritz)   3  
  4. 4. LOYALTY  PROGRAMS  ARE  EFFECTIVE…      …IN  INFLUENCING  PURCHASE  DECISIONS   Source:  Maritz   Source:  Nielsen   4  
  5. 5. LOYALTY  PROGRAMS  ARE  EFFECTIVE…      …IN  INCREASING  CUSTOMER  ENGAGEMENT   “Reward  program  members  are  70%   more  likely  to  be  WOM  champions   (defined  as  those  who  are  "ac@vely   recommending"  a  product,  service  or   brand)  than  the  general   popula@on”  (Colloquy)   Source:  Maritz   5  
  6. 6. LOYALTY  PROGRAMS  ARE  EFFECTIVE…      …IN  IMPROVING  MARGINS   “Loyalty  programs  can   increase  a  brand’s  market   share  by  20%  and   improve  customer   acquisi@on  by  up  to   10%”  (Aimia)   when  done   right!   6  
  7. 7. WHAT  THEY  WANT  OUT  OF  A  LOYALTY  PROGRAM   Customers   Businesses   Ease  of  redeeming   rewards   55%   Monetary  rewards   51%   Ease  of  earning   points     51%   Access  to  exclusive   deals  and  coupons     Easy  enrollment   op@ons   Source:  Mintel   36%   22%   More  revenue   34%   Customer  reten@on   Customer   engagement   70%   64%   BeHer  customer   14%   experience   60%  of  firms  consider  loyalty  to  be  a  top   three  strategic  priority     Source:  Forrester   7  
  8. 8. Choose Digital has EXIST Signed Partnerships with Already ACROSS COMPANY LOYALTY PROGRAMS II. Market Overview the Leading Loyalty and Incentives Programs in the III. Financial Overview World I. Business Overview Program SIZE Member Base 90 MM members 34 MM members 22 MM members 12 MM members 5 MM members 4.7 MM members 1.2 MM members 7 Confidential – Do not copy or redistribute. 2  
  9. 9. – United has been generating on average 26 MM digital impressions per month for its Choose Digital-enabled Digital Media Store among a sub-segment of its members during this beta period • The  quality  of  Choose  Digital’s  content  library  and  software  interface  has  resulted  in  significant  sales  conversion  rates   (above 10%) once a United customer visits the Digital Media Store – MileagePlus members are becoming more familiar with the service, resulting in decreasing bounce rates, down from 30.0% in August 2012 to 15.5% in March 2013 DEMOGRAPHICS FOR LOYALTY CARD OWNERS VARY • Going forward, the Choose Digital team is working toward a full launch with MileagePlus that will include: – (i) demographic tuning of marketing outreach, (ii) trigger targeting around decision points (e.g., an email five days before flight), (iii) marketing of different mixes of media, (iv) finalizing the content library and (v) increasing the frequency of monthly emails Sales Demographics by Gender Reward Redemption Demographics by Age Group 55 - 64 12.2% Over 65 Under 25 5.6% 8.0% Female 36% 25 - 34 21.6% 45 - 54 24.0% Male 64% 35 - 44 28.5% 15 dential – Do not copy or redistribute. 2  
  10. 10. ile $P ho an l $I ns cia u4 4t Ce on ne re s$ $S e al $B rv ra ice nd Ca $P s$ RO rb on VI Pe DE at rs ed RS on $B $ al ev $C er om ag Ca pu es bl te $ M e$ r$B ob or $In ra ile nd te $P rn ho s$ et ne $S e $B ra rv nd ice $ $P ro vid Pe er Su rs s$ on pe al rm $B ar ea ke ut t$ y$P Al co ro du ho OT ct lic C$ s$ $B He ev al er th ag $an Sn es ac d$ $ k$B M Pe ed ra rs ici nd on ne s$ al $P $E ro le du ct ro ct ni s$ cs $B On ra Ho nd lin m s$ e$ e$ Re El ec ta ile tro Ho rs ni m $ cs e$ $B Ap ra pl nd ia s$ nc e$ Br an ds $ ob M Fin CUSTOMER  LOYALTY  ACROSS  PRODUCT  CATEGORIES  (1/2)   35%$ %age  of  North  Americans  Who  Say  They  Are  “Completely  Loyal”  To  A  Brand     30%$ 29%$ 25%$ 23%$ 22%$ 20%$ 15%$ 20%$ 20%$ 19%$ 19%$ 18%$ 16%$ 15%$ 14%$ 13%$ 13%$ 13%$ 11%$ 11%$ 10%$ 5%$ 0%$ Source:  Nielsen   10  
  11. 11. ho Ho lic m $B e$ ev El er ec ag tro Ho es ni m $ cs e$ $B Ap ra pl nd ia s$ nc e$ Br On an lin ds e$ $ M Re ob ta ile ile OT $P rs ho C$ $ He ne al $B th ra $an Sn nd ac $ d$ k$B M Pe ed ra rs ici nd on ne s$ al $P $E ro le du ct Ca ro ct bl ni s$ e$ cs or $B $ In ra nd Ce te rn re s$ et al $B $S e ra Pe rv nd ice rs s$ on M $P al ro ob $B vid ile ea $P er ut ho s$ y$P ne ro $S e du rv ct Ca ice s$ rb $P on ro Pe vid at rs ed er on $B $ al ev $C er om ag pu es te $ r$B ra nd Su s$ pe Fin rm an ar cia ke l $I t$ ns Mt uM on s$ Al co CUSTOMER  LOYALTY  ACROSS  PRODUCT  CATEGORIES  (2/2)   %age  of  North  Americans  Who  Say  They  Are  “Not  Loyal”  To  Any  Brand     45%$ 40%$ 35%$ 30%$ 25%$ 41%$ 38%$ 37%$ 37%$ 36%$ 34%$ 34%$ 34%$ 32%$ 32%$ 31%$ 31%$ 30%$ 28%$ 23%$ Source:  Nielsen   21%$ 20%$ 15%$ 10%$ 5%$ 0%$ 11  
  12. 12. MOBILE  IS  BECOMING  AN  INCREASINGLY  EFFECTIVE   CHANNEL  FOR  LOYALTY   The  preferences  for  loyalty   func@onality  on  a  mobile  device   include:   •  Managing  points   •  Redeeming  points     •  Receiving  mobile  alerts     (Maritz)   Source:  Maritz   12  
  13. 13. DIGITAL  REWARDS  ARE  AN  INCREASINGLY  ATTRACTIVE   OPTION   •  Digital  media  is  in  great  demand   •  Digital  sales  of  music  albums  are  growing  at  double  digit  percentages  each  year,  now  accoun@ng  for  one  out  of  every  three  albums  sold   and  1.3  billion  digital  music  tracks  per  year,  according  to  Nielsen   •  Mobile  devices  are  feeding  the  demand  for  digital  rewards   •  Nearly  70  percent  of  Smartphone  Users  listen  to  music  on  their  phones,  and  of  those  who  do,  64 percent of those who listen to music on their smartphone do so daily or several times a day according to Paradigm •  Digital  media  rewards  are  easy  to  redeem   •  55%  of  users  list  ease  of  redemp@on  as  the  most  important  criteria  for  rewards;  digital  media  is  always  redeemable  and  not  scarce  like   other  reward  op@ons   •  Digital  media  rewards  appeal  to  all  demographics   •  Books,  music  and  movies  are  consumed  by  all  demographics  and  all  geographies;  with  a  good  selec@on  you  can  easily  appeal  to  everyone   •  Digital  rewards  increase  customer  engagement   •  Digital  rewards  allow  for  “micro”  redemp@ons,  ensuring  customers  can  enjoy  the  fruits  of  their  loyalty  sooner  and  more  oWen  than  if   they  only  offered  big  @cket  physical  items   •  Digital  media  rewards  can  be  cost  effecDve  for  companies   •  Unlike  physical  rewards,  digital  media  rewards  have  no  shipping  costs;  licensing  and  setup  fees  for  digital  rewards  stores  are  usually  also   aHrac@ve   13  
  14. 14. CONTACT INFORMATION Atul Sabharwal Founder, Snipp 415.595.7151 @snippinc 14