Customer loyalty program members remain a big plus for today’s retailers.
According to an Accenture Interactive survey, members of retailers’ customer loyalty programs generate between 12 and 18 percent more revenue for retailers than customers who aren’t members.
“Given that loyalty program members generate significant incremental revenue compared with non-members, retail loyalty program leaders must anticipate future growth trends and capture the opportunity to differentiate in an increasingly fragmented marketplace,” managing director of Accenture Interactive’s global loyalty and rewards practice, Farrell Hudzik, said.
Accenture’s research revealed four key findings: retailers focus more on increasing membership base over ROI, loyalty growth challenges still exist, customers find that retailers’ loyalty programs are not differentiated and that C-suite support is necessary and requires more strength.
Boosting membership base was more of a priority over ROI, according to the survey’s results. Fewer than one in five retailers focused on ROI to improve their customer loyalty programs (19 percent). Forty-five percent of respondents said that membership growth rates were the major focus of their customer loyalty programs. Forty-two percent of retailers surveyed said that they focused on the share of transactions by members. Retention rate (40 percent) and customer long-term value (37 percent) were also top priorities of retailers’ customer loyalty programs.
Retailers surveyed also reported that loyalty growth challenges included technology, competition, financial and talent. Forty percent of respondents said that keeping up with digital capacities and technology investments were a big hurdle for loyalty growth challenges. Many retailers also said that keeping up with competing loyalty programs (33 percent) was another major concern.
Retailers also thought that their loyalty programs are differentiated, when customers believe the contrary. Over two-thirds of respondents said that their loyalty programs were “significantly differentiated” from their competitors. Other research demonstrated that customers felt differently—44 percent said that they can easily replace a retailer’s loyalty program with a competitor’s.
C-suite support was also used by almost all respondents (97 percent), but more than half said they received “moderate” C-suite report (54 percent), perhaps demonstrating the need for improvement.
“The success of any good loyalty program hinges on the ability to identify and understand one’s customers and then provide them with a seamless experience through multiple touchpoints,” Hudzik said.