Despite seemingly every store offering its own loyalty program, shoppers, on average, have 10 loyalty cards in their wallet, according to the new Living Loyal study from customer engagement agency The Marketing Store.
Although they may be called loyalty programs, two in three customers don't think being loyal to a brand is important.
"There’s an opportunity to maximize marketers’ investments in established loyalty programs by using data they likely already have about their customers’ preferences," says Jeremy Ages, director of strategy and planning, The Marketing Store. "This knowledge about purchase behaviors and preferences forms the foundation of a strategy to further personalize brand experiences and engage customers at a more emotional level."
Brand marketers gain loyalty through story-worthy experiences. For customers to encounter lasting brand engagement, they need feel an emotional connection with a brand, says Ages. Marketers must identify authentic opportunities to facilitate this connection through their established loyalty program, or as a complementary initiative to their programs. These opportunities need to be authentic, shareable, and related to a personal story to create true and emotionally driven brand loyalty.
“Storytelling—giving customers a positive story to tell, seems to be a linchpin to long-term emotional brand loyalty," says Ages. "Understanding your customers and their experience with your brand within the context of their life seems to be the foundation to truly create the kind of experiences that foster meaningful engagement, that inspire stories and that lead to long-term business results."
Yet, this line of storytelling becomes more complicated since men and women approach the concept of loyalty differently. For women, their top association with the word “Loyalty” is “Trust”, followed by “Devoted” and “Committed”. For men, “Trust” was only a mid-level association when it comes to Loyalty. Rather, they respond to Loyalty as a contractual commitment, a matter of honor and doing the right thing.
"While it may seem obvious, men and women approach loyalty differently and marketers should take this into consideration when crafting the language of their messaging," says Ages. This distinction may be best illustrated when looking airline loyalty programs, he says. For women, “clean” is a much stronger association for what drives their loyalty to an airline than men. Then, women associate airline loyalty with a lack of baggage problems and a sense of comfort.
By comparison, men are significantly more concerned with not being “nickel and dimed” as their top association with airline loyalty, followed by “benefits of a loyalty program” and contractual commitments. Ultimately, brands need to consider the language of their messaging and the offers they make in the loyalty space, says The Marketing Store.
The research identifies six segments of shoppers in reference to loyalty programs and their relative share of the population: Trend Setters (14%), Prestigious Loyalists (25%), Quality Seekers (21%), Non-Shoppers (20%), Deal Hunters (11%) and Dollar Stretchers (9%).
Each group is identified by a number of attributes, including purchase drivers and brand affinity. "There were some demographical tendencies here and there, but overall these are shopper mindsets toward loyalty in general,' says Ages. "Mindsets may shift depending on circumstances which include age and income, but understanding the mindsets themselves helps predict and define both shopper behavior and their predisposition toward loyalty and loyalty programs at that given time."
Still, two of these six segments have a much higher propensity for brand loyalty: Trend Setters and Prestigious Loyalists, who make up 39% of shoppers. "As marketers approach their loyalty offerings and reward programs, they should tailor both rewards and messages to yield the greatest impact within each segment," says Ages. "Tertiary program opportunities may also be designed to address the segments that current programs may not reach. Marketers should ask themselves if their program is one size fits all when it comes to behavioral motivation and make the necessary changes to become more personalized for specific segments."
The study researched over 1,500 U.S. consumers between the ages of 18 and 65 while focusing on consumers’ participation in loyalty programs across five travel and retail categories: airlines, hotels, women’s apparel, supermarkets, and sporting goods.
The Marketing Store is one of the largest brand activation agencies with clients that include Coca-Cola, Nissan, McDonald's, Discover, and L’Oreal. It is headquartered in downtown Chicago, with offices across the globe in 12 countries and is privately-held as part of The HAVI Group.