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Do loyalty schemes take too long to reward customers?

8th Jan 2015
Editor MyCustomer
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54% of UK consumers believe it takes too long to earn rewards with loyalty schemes, a new survey from Grass Roots Group has revealed.

The research also found that 27% of people stop using reward programmes because of the length of time required to receive any benefits. 33% of respondents expect to receive significant rewards from a loyalty programme within a month of signing up, while a further 45% are prepared to wait between one and three months, despite the majority of schemes often taking far longer to offer customers any substantial returns.    

The older generation are more impatient in waiting for loyalty card rewards, according to the survey, with 12% of over-55s expecting to receive a reward within a week, compared to only 4% of 18-24 year olds.

However, further research from Grass Roots Group last November also stated that loyalty schemes fail to capture the majority of 18-24 year olds’ interest in the first place, suggesting that Generation Y are significantly harder to entice with loyalty schemes in the first place.  

And data from GI Insights in August also found that 94% of people belong to at least one brand loyalty programme, yet roughly half of those signed up admitted to never actually using them.

Commenting on the findings, Adam Goran, divisional director of customer engagement at Grass Roots Group said:  

“Customer loyalty schemes hold a lot of value to both brands and their customers. Brands have already done the hard work by earning customer loyalty, why then do so many risk losing their customers by not keeping them engaged throughout the entire loyalty lifecycle?

“Customers want, and expect, to be contacted by their loyalty scheme providers and if approached in the right way at the right time, they will become true advocates and not just occasional shoppers. If brands fail to capitalise on this and don’t engage effectively with their customers between the times where they spend and save their rewards, they will find it increasingly difficult to hold on to loyal customers.”

The success of loyalty schemes have been hotly debated in the last 12 months, especially in the supermarket sector where Planet Retail’s global research director, Natalie Berg recently predicted that 2015 would be the year that represented ‘the death of the loyalty card’.

Berg suggested retailers were waking up to the issues surrounding loyalty programmes and were far more likely to invest in new technology, such as home-scanning apps and personalised mobile rewards as means for attracting and retaining customers in the future.     

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Great article and interesting facts. Have you published full study presentation?

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ND
By Neil Davey
24th Apr 2015 09:03

Hi Daria, 

I've had a look around for a full report on these findings but it would appear that this was a limited piece of research by Grassroots with no full report accompanying it. 

However, you may be interested in the following guide on customer loyalty, which MyCustomer produced recently>

https://www.mycustomer.com/resources/form/the-mycustomer-crm-loyalty-gui...

Thanks

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