• by Laurie Sullivan , Staff Writer @lauriesullivan, March 4, 2021

A massive 81% of consumers want to form relationships with brands, and 70% still prefer discounts and free products as top loyalty rewards.

Merkle released its fourth annual Loyalty Barometer report this week, analyzing how consumers feel about rewards programs and what brands can accommodate consumer preferences and their change in behavior.

Each year, the report digs into how consumer mindsets shift, so brands can ensure customer strategies are not only current but remain relevant and impactful.

For this report, Merkle surveyed more than 1,500 consumers sourced outside of the loyalty marketing programs that Merkle manages for clients, and fielded in November 2020. Responses are from U.S. residents ages 18 to 65. It segments data from baby boomers to Gen X to millennials and Gen Y.

The next evolution of customer loyalty programs focuses on curating moments of value that are informed by data, contextually relevant, and seamlessly assimilated into consumer lifestyles to create emotional connections.

Surprises and convenience are the best ways to drive emotional connections with consumers. Some 58% said this is the most important way for brands to interact with them.

Loyalty can sustain brands through disruptive times, with 57% of consumers admitting they didn’t change brands due to the events of 2020.

The full report delves further into what customers are expecting from the loyalty landscape, providing insight into how brands can best position themselves for success.

Unfortunately, consumers still view loyalty as an actual program -- an incentive-based construct to reward them for their money, time, and attention -- rather than an overall loyalty experience.

When survey participants were asked to cite the main reason for participating in loyalty or reward programs in 2021, 44% said they did so to receive discounts, while 26% wanted to earn free products, 11% cited member-only benefits, 6% wanted access to exclusive rewards, 5% cited enhanced experiences, and 6% wanted to stay connected.

Compare the percentages with 2020 numbers, when 39% said they participated to receive discounts, 30% cited earning free products, 11% wanted member-only benefits, 7% wanted access to exclusive rewards, 5% cited enhanced experiences, and 4% wanted to stay connected.

Consumers don’t like everything about loyalty or rewards programs.  Some 45% said it takes too long to earn a reward, while 31% said it’s too difficult to earn a reward, 27% said rewards are not valuable, 24% said rewards are not relevant, 16% said there are too many communications, 14% worry about security, 13% said the program rewards them early and never again, and 8% cited confusion in the program.

The interesting thing when comparing last year’s numbers to this year is that marketers are learning how to correct their mistakes, and about changes in consumer behavior. For example, in 2021, 31% of survey participants said it’s too difficult to earn rewards, compared with 34% in 2020.