Slow Rewards Prompt Loyalty Defectors: Study

Consumers cited the length of time it takes to build up points in loyalty and rewards programs as the primary reason they bail out of such programs.

Seventy percent of respondents to a recent study said that it takes too long to see results from these programs and among the important 18-24 age group the number jumps to 79%, according to Maritz Loyalty Marketing, which conducted the study.

“Marketers need to provide consumers with realistic and achievable goals,” Gail Sneed, market development director at Maritz Loyalty Marketing, said in a statement. “Particularly with the crucial college-age demographic, it’s the chance to win or lose a lifelong customer.”

There were other reasons consumers decided to drop out of the programs. Twenty-three percent cited not being rewarded properly, 22% disliked the fee, 20% disliked the reward options, 17% said the program rules keep changing, 16% reported poor customer service and another 18% said that other programs seemed better.

Of those consumers with plenty to spend—incomes of $125,000 or more—they were particularly choosy and liked to comparison shop. Some 27% of this group dropped out of a program because another looked more appealing or the reward options were more attractive.

“The customer has to be able to believe that they can earn an appealing reward in a reasonable amount of time,” Sneed said. “Effective loyalty programs use analysis and modeling tools to ensure the right rewards are offered to the right customers and are achievable within a reasonable length of time. Programs that customize potential rewards based on the individual customer’s hobbies and interests hugely increase reward program satisfaction.”

The Internet can play a key role in customer satisfaction in loyalty and rewards programs. Fifty-eight percent of respondents said they preferred to get updates about the programs via the Internet while another 9% said they left a program because they got too much direct mail. The use of the Internet is even more important among the 18-24 group who said that 65% prefer communications through the Internet and 13% left a program after receiving too much paper mail.

“A robust loyalty program will include a link on the company’s Web site where customers can immediately access their reward points, easily determine required point values and redeem points with the click of a mouse,” Sneed said.

The survey was conducted earlier this year by Maritz Research to gauge attitudes and behaviors related to rewards and loyalty programs for retailers, hotels, airlines, credit card and restaurants. Interviews were conducted with 1,047 randomly selected adults in an online panel.