Loyalty reward communications are supposed to communicate with their customers. Now, how much do customers value those communiations. A consumer survey research released by customer loyalty agency Direct Antidote, answers that question. Interestingly, Hispanics, got the highest relevance scores. They are much higher than the relatively low figures the study obtains for the general U.S. population.
According to the survey, “despite marketers devotion to customized messaging, Direct Antidote’s results across all demographics surveyed showed decidedly average relevance scores, with Seniors reporting the lowest perceived relevance at a 5.7 mean score, and Young Adults and Hispanics tied for the highest at 6.9.”
The results suggest, what many marketers already know: Hispanics tend to be very brand loyal.
“Far too many of those mailings, emails and Facebook messages that companies send to their loyalty reward program members miss the mark, according to Just 32 percent of U.S. consumers rated reward program communications 8 or higher on a 1-10 scale for measuring relevance to their personal needs—with 68 percent giving a score of 7 or below. The Direct Antidote research is based on 2,152 completed surveys from consumers nationwide.
Direct Antidote’s study centered on loyalty rewards communications, such as annual points balance reports, special earning offers and program information. Consumers were asked to rank the relevance of the communications they receive from "not at all relevant" to "extremely relevant" on a 1-10 scale.
"We are in the era of enhanced customer expectations, where the empowered consumer has a strong desire for engagement," says Di Cullen, President of Direct Antidote. "And clearly the loyalty industry is falling short on delivering the highly-personalized, relevant communications that consumers expect. The data offers an opportunity for loyalty marketers to step up on several fronts."
Cullen cited the following strategies to improve communication relevance:
- Create offers that appeal to the trends and values of the times, such as the green movement or recession-stoked consumer frugality;
- Leverage partnerships with other brands to share data, drive down costs and drive up the value proposition to the consumer;
- Explore alternative sources to find new ways to mine for information that is compelling to customers.
Practicing what it preaches, Direct Antidote recently launched a campaign for Canadian loyalty program operator, the AIR MILES Reward Program, in an attempt to improve relevance and consumer response rates. The firm created an unprecedented 778,000 unique versions of an account statement mailed to over three million members. Early tests yielded a more than 100 percent boost in response rates and a green-friendly 40 percent reduction in paper waste.
In another key finding from the study, the Senior demographic reported a spike in engagement with rewards programs since the same questions were asked in 2007. Over the two-year period, the number of Seniors who reported reading special offers sent via mail increased 64 percent; the number saying that they read mailed statements was up 21 percent; and the number responding to member surveys increased 21 percent.
At the other end of the spectrum, the survey found Young Adults or Millennials outpacing all demographics in appreciation of engagement with rewards programs through new media. A somewhat expected but still notable 52 percent of Millennials strongly appreciate communication via cell phone or text message and 55 percent said the same about social networking sites. This compares with the General Population at 38 percent and 39 percent, respectively.
"The stats are indicators that the loyalty business enjoys appeal across the span of demographics," says Cullen. "As Baby Boomers move from workforce to retirement, there is great opportunity to engage these veteran loyalty players with communications that appeal to their new lifestyle. At the polar opposite, fostering engaged, loyal customers within the Young Adult demo means approaching them on emerging channels."
Source: Direct Antidote/Colloqui.
Best Practices: Customer Experience Crucial to Retain Brand Loyal Hispanics