Commentary

How To Create Brand Advocates: Hispanics' Lure To Loyalty Programs

Understanding the nuances of the Hispanic market such as online buying behavior, family oriented culture, and propensity to engage and buy more from brands offering loyalty programs becomes more important as the population of this market segment continues to increase in the United States.

The U.S. Census Bureau estimates the Hispanic market will represent one-third of the U.S. population by 2050, up from 17% in 2011, and Pew Research estimates their spend at about $1 trillion annually, respectively, per a PunchTab report. So the company analyzed the market segments in relation to loyalty programs.

The growth of the Hispanic market, combined with their affinity for loyalty programs, inspired PunchTab to analyze this market segment and provide marketers with a few suggestions to help optimize brand campaigns. The company set out to explore how the Hispanic market interacts with and feels about loyalty programs -- focusing on a few of the most popular -- as they move through the purchase process.

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PunchTab reviewed more than 611 tweets, between Jan. 1, and Jun 30, 2013, centered on brand loyalty programs from Target, JCPenney, Kohl's, Walmart, Best Buy, Walgreens, Bed, Bath and Beyond, Panera, Sears, and Kmart.

Through the analysis, PunchTab mapped out the purchase path. The biggest challenge became searching to identify loyalty program members, consolidating social discussions, and sitting back to listen and observe. The public data allowed PunchTab to identify 500 loyalty program members who identified themselves as Hispanic or Latino American using a process called "whitelisting."

The analysis allowed PunchTab to evaluate the most popular topics at each phase: pre-purchase, during purchase, and post-purchase. The highest volume of loyalty conversations -- 62.8% -- took place in the post-purchase phase where consumers posted the highest volume comments, and 37.5% discussed brand engagement through Twitter tweets and other social posts.

Target's REDcard was the most discussed loyalty program by the Hispanic market during the pre-purchase phase. Getting approved for a Target REDcard can become more challenging than other retail loyalty programs. Conversations centered on consumers sharing their feelings of excitement about receiving the Target REDcard and their growing anticipation to begin earning rewards.

Balance Rewards from Walgreens and SHOP YOUR WAY from Kmart and Sears generated the most loyalty card conversation. Both Walgreens Balance Rewards and SHOP YOUR WAY ran multiple marketing campaigns generating conversations and brand engagement by the Hispanic community. Sears and SHOP YOUR WAY partnered for a campaign around New Years 2013 that encouraged people to share their New Year's resolutions. Kmart and SHOP YOUR WAY tapped into target consumer interests around WWE, while Balance Rewards encouraged members to promote their new program membership for a chance to win 1 million bonus points.

One of the more interesting points the study highlights centers on the enthusiasm for the brand after purchase, compared with prior to purchase. Loyalty card owners were much more likely to share positive sentiments about the brands than the negative ones. Within post-purchase conversation, for every post expressing something negative about the programs, there were 1.5 posts advocating the loyalty programs.

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