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Download ReportLoyalty Programs Dole Out Rewards but Fail to Fully Connect with Consumers Says New CMO Council Study
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CMO Council releases
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Competitive crunch and convergence in communications marketplace is fueling increased customer churn, and testing customer loyalty.
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Facts & Stats

As part of the Giving a Business Lift From Loyalty initiative, the CMO Council has aggregated statistcs on the economics and operations of loyalty programs across various regions and industries. To learn more, select a topic from the menu below.

Loyalty Program Participants

British consumers feel that loyalty rewards are more valuable in a recession, with 95% having actively participated in travel and shopping reward schemes, and 90% planning to redeem them during 2009. (Air Miles Travel Rewards Programme, UK)

According to recent UK studies, 96% of their population are currently a member of a reward scheme and 64% belong to three or more loyalty schemes. (The Wise Marketer)

Good customer service (34%) was the single aspect most likely to encourage people to spend more, followed by personalised rewards they felt were relevant to them (30%)

Poor customer service (44%) is the aspect most likely to put people off increasing their spend, followed by unachievable rewards (28%), unrealistic points expiry deadlines (20%), or receiving too much communication (18%).

90% of UK adults now use recession-busting shopping strategies when they do their weekly shopping (uSwitch)

Travel industry loyalty rewards programs have seen a 31.2% decline in active participation since 2007 because of a decrease in business and leisure travel and corporate mandates to cut discretionary budgets. (Colloquy)

The average number of travel rewards programs to which consumers belong dropped 27.8% to 2.0 in 2009, from 2.77 in 2007. (Colloquy)

32.3% of consumers said the recession has made their participation in retail rewards programs more important. (Colloquy)

Participation in loyalty programs is up to 19% since 2007 (Colloquy)

Loyalty program members are more likely to be one or more of the following: female, young, living with children under the age of 18 in the household or from the Northeast. (Maritz)

One-third of consumers find retail loyalty programs "more important" when battling tough times. (Colloquy)

Participation in rewards and loyalty programs rose by 19% across the board since 2007. (Colloquy)

Women (62 percent) are significantly more likely to belong to a store or membership loyalty program than men. However, more than half of the men surveyed (54 percent) say they are part of a program. (Maritz)

Membership of loyalty schemes is more popular in general among women than men (72% of women were members of 3+ schemes, compared to 51% of men). (The Wise Marketer)

About 75% of consumers said the economy had a positive or neutral influence on their decision to join a loyalty program. (Colloquy)

More than 46% of shoppers ages 18 to 25 said retail rewards were "more important" during tough economic times, and 27% want to join more programs. (Colloquy)

Membership of loyalty schemes is more widespread among older people (46% of 18-29 year olds belonged to 3+ schemes, compared to 56% among 30-39 year olds, and 67% for the 40+ age group). (The Wise Marketer)

73% of teen and young adult consumers (aged 13 to 21) shop at a fixed group of stores. (Euro RSCG Discovery)

41% of females teens (aged 13 to 21) and young adults said that they are likely to engage in money-saving activities such as joining a loyalty program. (Euro RSCG Discovery)

Seventy percent of persons from higher-income households ($125,000 +) are more loyal to companies that offer rewards programs. (Maritz)

There has been a 19% growth in loyalty scheme participation since in 2007. (Colloquy)

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Card-based Loyalty Programs

According to Cardweb.com, 40 percent of all Visa and MasterCard issuers now operate a rewards program tied to their credit card offering. (Cardweb.com, 2009)

Loyalty program penetration among U.S. debit card issuers is already at 20 percent and rising rapidly. (The 2009 Colloquy Loyalty Marketing Census)

Customer spending is 46% higher with companies that offer reward card programs. (Total Research Corp & Custom Marketing Corp’s Loyalty Monitor Study)

28% of customers reported that they are “Extremely Likely” to increase their visits to a business if they have a loyalty reward card for them. (Total Research Corp & Custom Marketing Corp’s Loyalty Monitor Study)

Over 60% of U.S. households said that loyalty card programs were important in their shopping decisions. (AC Neilesen)

Over three-quarters of the consumer population hold some form of loyalty or rewards card, while 25 percent of the shopping population belongs to two or three programs. (The Wise Marketer)

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Loyalty Programs Across Regions

79 percent of Australians felt more or equally loyal to brands in the presence of effective loyalty programs, amidst the economic downturn, as did 73 percent of those in China, 69 percent in India and 59 percent in Japan. (Hilton Honors)

The Northeast (70 percent) and West (63 percent) have the highest concentration of store or membership loyalty program participants. People in the South (37 percent) and the Midwest (42 percent) are significantly more likely to not belong to any type of consumer loyalty program. (Maritz)

Barely half (52%) of UK consumers are members of a loyalty program. (Imperatives for Customer Loyalty Report)

30% of UK consumers say that “rewards that are relevant to the individual” are a driver of encouraging people to spend more in the shopping and retail sector within loyalty programs. (Imperatives for Customer Loyalty Report)

In Canada, led by the Air Miles loyalty coalition, more than 70 percent of all households participate in at least one loyalty program. (The 2009 Colloquy Loyalty Marketing Census)

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Loyalty Programs Across Industries

Travel industry loyalty rewards programs have seen a 31.2% decline in active participation since 2007 because of a decrease in business and leisure travel and corporate mandates to cut discretionary budgets (Colloquy)

The average number of travel rewards programs to which consumers belong dropped 27.8% to 2.0 in 2009, from 2.77 in 2007

While 57% of boardroom executives feel that customer retention will be more important in 2009 than in 2008, only 23% cited customer acquisition as their top priority (Ipsos MORI and The Logic Group)

46% of consumers said that they were not part of any loyalty scheme, while 47% said that they are enrolled in a loyalty scheme with a supermarket or other retailer

51% described themselves as being "fairly satisfied" with the programmes they are members of

Membership in US Loyalty Programs by Industry**
 
IndustryLoyalty Program
Memberships
IndustryLoyalty Program
Memberships
Financial Services422.0 millionDrug Stores73.9 million
Airline277.4 millionFuel Convenience51.2 million
Specialty Retail191.3 millionRestaurant13 million
Hotel161.8 millionCar Rental and Cruises10.7 million
Grocery153.3 millionOther Programs127.9 million
Mass Merchants124.8 million 
Gaming106.0 million 
Dept. Stores92.8 million 
  
(Colloquy)
**The 2009 figures have been adjusted to account for the inclusion of three industry segments that were not included in the 2007 version: Car Rentals, Cruise Lines and Mass Merchandisers. If these new industries are removed, the adjusted 2009 US census total stands at 1.673 billion.

Financial Services

For the first time on record, US credit card reward program members outnumber airline frequent flyers. (The 2009 Colloquy Loyalty Marketing Census)

US financial services rewards programs has reached 422.0 million, a 77% increase since 2007 census. In contrast, airline loyalty programs account for only 277.4 million members. (The 2009 Colloquy Loyalty Marketing Census)

Sixty-four percent of persons from higher-income households who don't currently participate in a rewards program with their main bank would increase business with their main bank if they were rewarded for doing so. (Maritz)

Retail and Grocery

Over half (50.7 per cent) of US supermarkets now offer savings through frequent shopper or loyalty card programs and rate their success at 7.3, up sharply from 6.4 last year. (FMI)

90% of best-in-class retail enterprises indicate at least "some level of success to very successful results" from their loyalty programs, whereas 47% of laggard retailers and 35% of industry average retailers indicate 'no change in performance' from their loyalty program. (Aberdeen Group)

Even though 53% of retailers surveyed indicate that customers can join their loyalty program on the retail website, the same is not true at the store POS: a mere 37% of all retail respondents reported that customers can join their loyalty program via the POS system in stores. (Aberdeen Group)

More than 76 percent of all U.S. grocery retailers with 50 or more stores now offer a frequent-shopper program. (The Food Marketing Institute, 2009)

53 percent of U.S. grocery customers are enrolled in loyalty programs. (McKinsey, 2009)

In the retail market, 73.7% of supermarket and grocery store respondents use face-to-face interactions to invite customers into their loyalty programs. (DMA Loyalty Program Cross-Industry Analysis of Usage and Effectiveness study, 2008)

Airlines

According to Web Flyer, there are 89 million members of airline frequent-flyer programs in the world, 74 million of them in the U.S. alone. (The Web Flyer, 2009)

Reward redemption among the top nine airlines rose last year but only 8 percent of all loyal airline customers redeemed miles for flight. (Market Platform Dynamics)

Auto

Consumers enrolled in loyalty programs get discounts ranging from about 5 percent off for repairs to free oil changes. (Bankrate.com)

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Leading Indicators

57% of respondents have introduced new measures in the past 12 months to help build relationships and retain customers, although only 39% said that the UK as a whole is getting better at customer service. (The Wise Marketer)

UK marketers are tentatively embracing Web 2.0 technologies, with 17% now saying that they 'blog' to connect with existing or potential customers. (The Wise Marketer)

Money off vouchers have also reached the top of the shopping list with the number of frugal consumers regularly using them increasing sharply to 74% (compared to only 26% in 2008).

Trust is key to keeping customer loyalty because people are seeking out cheaper private label options (Mintel)

In 2002, 32% of guests said that the loyalty program was a key factor in deciding where to stay. That number has grown steadily to 37% in 2007 but has declined in the first 9 months of 2008. (MarketMetrix)

The average household in the United States is signed up for 14 loyalty programs, ranging from grocery stores and gas stations to airlines and hotels, but actively participates in only six (Colloquy)

Participation in loyalty programs - especially among younger adults - has risen 19% since 2007, with retail loyalty programs getting the highest scores for adding value (Colloquy)

Reward program members are 70% more likely to be WOM champions (defined as those who are "actively recommending" a product, service or brand) than the general population. (Colloquy)

55% of reward program members are self-described WOM champions.

68% of WOM champions in reward programs will recommend a program sponsor's brand within a year.

Actively participating reward program members are more than three times more likely to be WOM champions.

Reward program members who have redeemed for experiential rewards are 30% more likely to be WOM champions than those who have redeemed for discounts.

Nearly 90% of Americans participate in some type of rewards program, and most are enrolled in more than one. (BusinessWeek)

From 2006 to 2008, U/S. loyalty program memberships increased from 1.341 billion to 1.807 billion – an adjusted growth rate of nearly 25 percent. (Colloquy)

96% of people are currently a member of a reward scheme and 64% of people belong to three or more loyalty schemes. (The Wise Marketer)

Reward program members are 70 percent more likely to be word-of-mouth champions (defined as customers who are "actively recommending" a product, service or brand) than the general population. (Colloquy)

The percentage of overall active memberships in the U.S. – those memberships that demonstrate some type of engagement within a 12-month period – remains at 43.8 percent, with a blended average of 6.2 active memberships per household. (Colloquy)

Consumer expectations regarding brand value went up 20 percent this year versus last. (Brand Keys)

Just under two-thirds of consumers (65 percent) say price is becoming more important than convenience in brand purchases. (Information Resources Inc.)

Seventy-three percent of customers who are enrolled in rewards programs say that they hope that data generated as a result of their participation in rewards programs are used to develop a better program for them. (Market Platform Dynamics)

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Economics of Loyalty Programs

Despite a jump from 1.3 billion to 1.8 million total loyalty program memberships in the US between 2007 and 2009, less than 44% are actively used (Colloquy)

792.8 million active memberships indicates that the rate of active membership is relatively flat at 43.8%, compared with 39.5% in 2007

Of an average total of 14.1 loyalty programs that each household has signed up for, only 6.2 of them are actually used. This puts the number of active loyalty programs at 792.8 million.

Loyalty program members accounted for 48 percent of holiday shoppers in the 2006. (Click Z)

Non-loyalty members primarily shopped at brick-and-mortar locations, while only 22 percent of loyalty members shopped in stores

Two-thirds of loyalty members shopped online, and 41 percent ordered from a catalog or through the mail.

Members of loyalty programs tend to be more affluent, with incomes of $100,000 or higher

Forty-four percent of program members spent in excess of $1,000 on holiday purchases

Fifty-eight percent of retail loyalty program members bought from companies where they had a membership

60 percent of most marketing budgets are allocated toward devising and promoting loyalty schemes. (Market Platform Dynamics)

Only 12 percent to 15 percent of customers are loyal to a single retailer, but they represent between 55 percent and 70 percent of sales. (Center for Retail Management, Northwestern University)

A 5% reduction in lost customers can increase profits by up to 75%. (Loyalty Magic)

A first-time customer has a 30% chance of becoming a long-term profitable customer. If they buy three times relatively quickly, their chance of becoming long-term more than doubles to 67%. (Loyalty Magic)

A typical company receives around 65% of its business from existing customers. (Return on Behavior Magazine)

Most companies can increase revenues by nearly 50% while retaining only 5% of their customer base. (Frederick Reichheid)

The total U.S. consumer membership in loyalty-marketing programs today is more than 1 billion strong, with an average of more than four programs per adult. (BusinessWeek)

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Leaders & Laggards

Grocery Sector Loyalty Ratings

While Wal-Mart rules the Grocery sector in terms of frequency of visit, respondent loyalty ratings told a more cheerful story for traditional Grocers and offered little praise for the Bentonville, Arkansas-based retailer. (Colloquy)

  • Northeast winner: Safeway. ALDI and Costco also received high loyalty ratings in this region.
  • Southeast winner: Costco. The Hybrid-model retailer was the clear favorite in this region. Publix, Sam’s Club and Kroger also evince strong customer loyalty.
  • Midwest winner: Safeway. Despite the Midwest serving as Kroger’s stronghold, Safeway holds the highest loyalty rating in this region.
  • Southwest winner: Costco. The membership club topped the list once again, followed by Safeway and H-E-B.
  • Northwest winner: Albertsons. Costco and Safeway came in virtually tied for second place.
  • Overall winner: Costco. Costco emerges as the grocery retailer to which U.S. consumers profess the highest degree of loyalty. Runner-up: Publix.