Customer loyalty programs, as their name implies, are meant to encourage loyal buying behavior – although their biggest value to retailers probably lies in the data they provide about customers' overall value and purchase behavior. But if customers become dissatisfied with these programs, or perceive them as indistinguishable from one another, loyalty programs will neither promote loyalty nor provide valuable data.

 

A recent customer loyalty program survey conducted by Wakefield Research and ACI Worldwide shows that many retailers may need to re-evaluate their loyalty programs.

 

The majority of Americans (75%) are members of at least one retail loyalty card program. While 62% join retail loyalty programs to get discounts on the items they buy most, only 36% of consumers report actually receiving a reward or promotion that made them return to the store; 25% of respondents say they received rewards or promotions for items they would never buy. This disconnect between what customers want and what retailers are offering as rewards could indicate more pervasive problems with meeting customers' needs.

 

Retailers should also pay attention to the quality of loyalty rewards and promotions they are providing: 27% of consumers say they received rewards they didn't want, 22% found a reward too small to take seriously and more than two in five (44%) said they had a negative experience from a loyalty program. Only 27% of consumers said they had received a reward or promotion that made them feel valued as a customer.

 

In some instances, communication with consumers, a critical element in customer engagement, was lacking: 85% of consumers enrolled in a loyalty program report that they never heard from the retailers about it after they signed up. Similarly, 81% said they didn't know about the benefits of a program they've signed up with, or how and when they would receive any rewards.