Long-term success hinges on a retailer’s ability to build long-term shopper loyalty. To uncover which loyalty programs are revenue drivers Bond Brand Loyalty, in partnership with Visa, released its “9th Annual Loyalty Report,” ranking the top programs across industries.
The data reveals that loyalty program expectations continue to rise year over year and top programs differentiate and lead by prioritizing the experience over the end reward itself.
In the travel industry for example, Bond estimates billions of dollars in customer spending is left on the table when brands fail to address the 14% gap in customer expectations versus current experience. By re-tooling loyalty programs and closing the gap to better meet expectations, customer spending in the travel category could grow by $5 billion.
- Smith's Fuel Program
- Hy-Vee Fuel Saver + Perks
- SE Grocers Rewards
- Walgreens Balance Rewards
- CVS ExtraCare
- Rite Aid Wellness+
- Department Stores
- Kohl’s Yes 2 You Rewards
- Nordstrom The Nordy Club
- JCPenney Rewards
- The Children's Place My Place Rewards
- American Eagle Outfitters AEO Connected
- DSW VIP
- Bed, Bath & Beyond Beyond +
- PetSmart Treats
- REI Membership
- Gas and Convenience
- Cumberland Farms SmartPay
- Shell Fuel Rewards Program
- MAPCO MY Reward$
“This year’s report substantiates the experiential elements of a brand’s program as the key to unlocking greater profitability,” said Sean Claessen, chief strategy officer at Bond. “It’s the journey, not just the destination — when it comes to customer loyalty. The experience the program facilitates is what differentiates leaders from laggards.”
The data unveils key opportunities for brands to differentiate their loyalty programs by focusing on impactful elements the member experience, which will lead to deeper brand engagement and increased sales. Top recommendations from the findings include:
Gamification is a key driver of program enjoyment. Enjoyment derived from participating in a program beats the actual end reward. Fifty-three percent of program members say game mechanics would make the program more enjoyable and when gamification is present, 81% of members take advantage of it.
Over half (56%) of programs explored for the study employ game mechanics. When programs use gamification — like goal-setting, countdowns, and virtual rewards — programs see an almost two-fold (1.7x) lift in enjoyment.
As the data suggests, consumers have a high expectation that when personal data is shared, it will be used to make a much better and more personalized experience for them.
Only 2 in 10 members say that they are very satisfied with the level of personalization they get from their loyalty programs, and only 24% of members say that programs keep their preferences up to date.
The good news is that when personalization is done well there is a 6.4x lift in member satisfaction. And successful execution of program communications can result in up to a 10x lift in personalization.
Unlike their Gen X and Baby Boomer parents, the data finds Gen Z and younger Millennials (ages 24–29) are highly influenced by loyalty programs (65% Gen Z and 71% Millennials). Over half (59%) are comfortable with programs capturing their information in exchange for authenticity, purpose, and meaning.
Even though young consumers are at the beginning of their earning potential, they’re willing to pay a fee to receive enhanced benefits from loyalty programs (52% compared to the average U.S. consumer at 43%). Gen Z and younger millennials are also beginning to change the payments ecosystem, and they will likely expect a digital experience wherever they go. Forty-six percent save a card on file with a brand for use, while 27% save their card in their smartphone’s digital wallet and show it to receive benefits or make purchases.
According to Bond’s data, program members have the capacity to be actively involved in only seven programs. This represents an opportunity for brands to come together in a partnership when program participants have similar traits or buying patterns.
Sixty percent of members expressed interest in partnerships introduced to them through their loyalty programs. And 27% say their program has a partnership and 75% find the partnership appealing