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Loyalty programs - statistics & facts

The ongoing effort to win over customers is an inescapable aspect of a brand’s life and can often be a highly competitive business. Once a brand has established a good reputation there comes the time to uphold it by providing consistently high-quality products or services. The aim is to gain and keep loyal customers who time and again choose your brand over others. In order to aid this process brands implement numerous tools and methods, one of which is loyalty programs. The entire customer loyalty management market worldwide is valued at more than 5.5 billion U.S. dollars and it is expected to surpass 24 billion by the end of 2028.

Loyalty programs - usage and perception

As it turns out, loyalty rewards program membership and usage are two different phenomena. On average, consumers in the United States belong to 14 such programs but actively use only half of them. The fact that it takes too long to earn a reward or is too difficult to earn one is the most probable reason behind such low active usage, with the majority of consumers admitting that this is something they dislike about loyalty programs . Invaluable or irrelevant rewards are also cited as common dislikes. On the other hand, discounts, free shipping and products as well as exclusive promotions are seen as valuable features of rewards programs.
Important to note is that in times of crisis customer loyalty counts for much more. The outbreak of the coronavirus in 2020 has proven difficult for brands, seeing that a third of consumers decided to try new brands at that time, and a large majority declared a willingness to continue with these new brands after the pandemic. So, what is it that consumers see as leading drivers of engagement in loyalty programs? For the most part, experience is what customers appreciate the most. Ease of use and enjoyment, brand alignment, data usage and trust, good communications, and digital capabilities are the most commonly cited ingredients of a positive experience with rewards programs.
All in all, both businesses and consumers benefit from loyalty programs if done right. Consumers appreciate instant wins, big prizes, and attractive discounts, which in turn drive sign-ups and encourage usage. Meanwhile, businesses reap the rewards of having a larger and more faithful customer base as well as a stronger brand connection and increased engagement.

Brand trust

The promise of special perks, reward points, discounts, and free offers is a popular method of attracting new customers and fostering their loyalty. The basis of that loyalty is brand trust. As common experiences dictate, trust in general can be difficult to earn, hard to keep, and close to impossible to win back. Trust is that much harder for brands to win and sustain as they face unending competition and social pressure. In fact, the results of a survey among consumers from across the globe found that on average they trusted less than half of the evaluated brands. Respondents to the same study also admitted that two thirds of the brands mentioned could cease to exist and they would be entirely unaffected by this – proof positive of the hoops brands must jump through to attract customers. br>
Among the main reasons why consumers would lose trust in brands are faulty products, poor customer service, and inadequate purchase experience, to name but a few. The most recent data shows that the types of brands viewed as untrustworthy by consumers are those in the pharmaceutical and telecommunications sectors, whilst retail and travel brands are held in higher regard.


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