2 Reasons Why Loyalty Program Participation Is Up
The economy continues to lag, and that appears to understandably affect almost every sector in the marketing industry. But there's one major exception: loyalty programs, which recognize and reward the best customers of an organization. According to the recent white paper from loyalty marketing publisher and research company COLLOQUY, entitled After the Meltdown: Consumer Attitudes and Perceptions About Loyalty Programs in the Post-Recession Economy, U.S. consumer participation in loyalty programs has jumped nearly 20 percent amid the recession. Here are two reasons why.
1. Stretch those dollars
To help stick to smaller household budgets, many customers are using loyalty programs to earn rewards for their purchases and get better deals. The retail category, for example, has been hit hard by the recession, but more than three-quarters of customers who belong to retail loyalty programs report increases in their program participation as a direct result of the sour economy.
"U.S. consumers clearly see value in program participation and continue to leverage their activity as an antidote to hard times—seeking added value and using rewards to stretch dollars," says COLLOQUY Editorial Director Rick Ferguson.
2. Millennials finally become a demographic to be reckoned with and marketed to
Perhaps one demographic hit hardest by the economy are millennials (18- to 25-year-olds), that elusive group for direct marketers. Since last measured in 2007, their participation in loyalty programs has risen 32 percent, to nearly 60 percent. While about a third of the general population ranks retail rewards programs as more important during the recession, nearly half of responding millennials do. Also, more than one-quarter of millennials are actively seeking to enroll in new reward programs to help ease their spending.
"Millennials represent a golden opportunity in a time of economic darkness for loyalty marketers," states Kelly Hlavinka, COLLOQUY partner and co-author of the white paper. "This demographic is receptive to the wish list of loyalty initiatives—eager to join programs, eager to build relationships with their favorite brands and eager to engage with new media channels. This shows a powerful opening for loyalty marketers to build sustainable loyalty with the next generation of American consumers."