KPMG International has released a report based on a global survey examining retailer loyalty programs and how they can be made more effective as customer attitudes evolve.
Titled “The Truth about Customer Loyalty,” the report finds that only 37 per cent of consumers say loyalty programs are an effective way to earn their favour, while 96 per cent of millennials want companies to find new ways to reward their loyalty. And three quarters of all consumers say they would switch brands for a better loyalty program.
The survey polled no fewer than 18,000 consumers in 20 countries, and according to KPMG, the bottom line is that “retailers need to get serious about customer centricity − loyalty platforms may help.”
"Despite massive digital and consumer-driven disruption in the retail sector, and the resulting need for a laser focus on customer centricity, it's ironic that many customer loyalty programs today haven't changed much," said Paul Martin, head of retail, KPMG in the UK. “Retailers who are serious about customer centricity need to ensure their loyalty programs are in line with the expectations of their customers. And today's consumers like to interact with an ecosystem that covers payments, fulfilment, social media, etc. as this can drive value, convenience and a positive experience. And that's a platform experience."
KPMG concludes that there are four ways to improve existing loyalty programs:
- Revitalize them. Responsible personalization, emotional connection and purpose-driven causes should be key considerations. With advanced analytics and artificial intelligence, loyalty platforms and personalization will help retailers get more intimately familiar with customer preferences.
- Keep it simple. Make loyalty programs easy to join and simple to use. Globally, 60 per cent agree loyalty programs are too hard to join and/or earning rewards is a challenge. Lengthy registration processes, rules and conditions, technical difficulties with redeeming awards are all likely to turn customers away.
- Maintain relevance. Retailers need to ensure their loyalty programs stay relevant to customers.
- Promote awareness and familiarity. Regular communication to consumers through social channels, email or advertising can help programs remain top of mind with consumers. More than one in three consumers who did not belong to any loyalty programs said they were not aware of any.
Read the full report here.