Growth for Customer Loyalty Programs Slowing: Census

Author: Richard Adhikari / Source: E-Commerce Times

Membership in loyalty programs grew at 15 percent this year to total 3.8 billion, according to the recently published 2017 Colloquy Loyalty Census Report.

The growth rate recorded in the 2015 loyalty census, when membership stood at 3.3 billion, was 26 percent.

Growth has slowed because the United States is a maturing market, said Melissa Fruend, author of the report.

Mergers and acquisitions in the grocery sector, which saw memberships plummet 24 percent from 188 million to 142 million, were another factor.

However, the financial services sector is growing strongly, mainly due to cash back incentives. Membership is 664 million compared with 578 million in 2015.

The retail sector, with 1.6 billion reward program memberships, dominates the field. The travel and hospitality sector comes next with 1.1 billion memberships.

One of the most dynamic sectors is the other/emerging sector, covering online-only offerings, entertainment, daily deals, point aggregators and card-linked offers. With 462 million members, this sector makes up about 12 percent of the total membership market, according to the report.

What Drives Members

Emotion was the biggest driver across all groups represented in the census, with loyal customers most often choosing “I love the brand/retailer/service” as their main reason for participating.

Other findings:

• 53 percent of consumers identified ease of use as the main reason for participating in a loyalty program;
• 39 percent cited great discounts as the reason;
• 37 percent cited ease of understanding the program;
• 57 percent said they abandoned a program because it took too long to earn points or miles; and
• 51 percent said they trusted loyalty programs with their personal data.

“A bad structure can impact any sector,” Colloquy’s Fruend told CRM Buyer. “As a guideline, if your best customer can’t earn a program’s lowest level reward in…

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