Consumers Shun Loyalty Programmes Forcing Brands to Rethink the Customer Relationship

18 May, 2016, 09:00 ET from Collinson Group

LONDON, May 18, 2016 /PRNewswire/ --

  • Traditional loyalty programmes are becoming less engaging for affluent middle class consumers, with 35 percent saying they 'can't be bothered'-compared to 18 percent in 2014 
  • However, personalised, relevant loyalty initiatives are effective-80 percent of financial services programmes encourage higher spending 
  • Financial services appear best placed to respond, with highest customer loyalty across eight industries 

There is growing apathy among the affluent middle class towards existing loyalty programmes according to research released today by Collinson Group. The survey shows that consumers are less likely to recommend a brand to friends or less likely to refrain from switching to a competitor as a result of current loyalty programme compared to two years ago. Membership of programmes is also lower across eight industries including grocery, retail, hospitality, and airlines than in 2014.

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"Our research is a wake-up call to brands in every industry where points-based programmes offering generic rewards are still being used. Given the importance of affluent middle class consumers on the fortunes of companies, it is imperative that low-performing initiatives are aborted, and that brands rethink how they recognise, engage and reward customers," said Christopher Evans, Director, Collinson Group. "Global consumers now expect real-time interactions with brands on a platform of their choosing. These interactions should be highly personalised and relevant, and as ever, consumers expect to be rewarded for their continued custom. Brands that are not innovating and addressing evolving customer expectation will simply be left behind."

The research polled 6,125 of the top 10-15 percent of earners from Australia, Brazil, China, France, Hong Kong, India, Singapore, the United Kingdom, the United States of America and the United Arab Emirates. This group of affluent middle class consumers is highly prized by global brands due to their higher spending potential, as well as the aspirational influence they have on other consumers.

Collinson Group identified four global tribes, or groups of people, who share common traits that cut across age, gender and international boundaries. First identified in 2014, these tribes have proved very useful in gleaning a deeper context of the affluent middle class, who prioritise family, altruism and enriching experiences. Each has its own nuances, whether it is a desire to save for the future or see the world, but one common thread among all tribes in the 2016 research is a high expectation of brands. Nearly three-quarters (69 percent) expect high quality, consistent customer service however they interact with a brand. The same percentage expect brands to be easy to do business with, and 67 percent value the flexibility to choose the rewards and benefits they are offered.

When asked what would encourage higher and more frequent spending on their preferred brands, half of respondents requested a loyalty programme where it is easy to earn, redeem and adapt to their personal preferences. However, there is growing apathy among the affluent middle class towards existing loyalty programmes. Over a third (35 percent) of respondents stated they could not be bothered with them, twice as many who held this view in August 2014.

Additionally, the three most popular loyalty programmes by industry-supermarkets, airlines and credit cards-all saw declining membership numbers in the same timeframe:

  • 64 percent are members of supermarket loyalty programmes, down from 70 percent
  • 55 percent hold frequent flyer memberships, down from 65 percent
  • 48 percent participate in credit card programmes, down from 63 percent

"We continue to see the potential of loyalty initiatives to positively influence consumer behaviour, as despite lower membership numbers, three quarters of programmes across eight industries still encourage higher spending," continued Christopher Evans. "There is an appetite for loyalty and customer engagement initiatives, but consumers are turning their backs on programmes they do not value. The affluent middle class value spending time with, and providing for, their families, as well as saving for the future. These rank far higher than driving a good car or going on a luxury holiday, and brands should seek to tap into what motivates their customers, instead of reach for discounts or material goods as rewards."

The financial services opportunity  

Of all the industries surveyed, 70 percent of the affluent middle class felt loyal or extremely loyal to their bank, the highest across any sector.  Almost two-thirds (65 percent) felt the same way about their credit card provider. These two sectors beat 8 other categories including technology providers like Apple (60 percent), supermarkets (57 percent), and clothing brands (46 percent).

Many people have stayed with the same bank for a number of years, which may be due to general apathy. However, this is rapidly changing as new disruptors enter the market and provide tailored digital and mobile services that legacy institutions are not yet offering. Banks are in a position to set the agenda by providing value that customers appreciate, thanks to the considerable data held on record and the existing level of perceived loyalty. Banking loyalty programmes were found to encourage 82 percent of members to spend more, while credit card initiatives positively influenced 79 percent of respondents.

The data suggests that recent moves made by financial services providers to develop more personalised and digital services are beginning to pay off. The research also uncovered increases in the levels of trust in financial services' ability to manage personal data, and faith in institutions to act in their customers' best interests.

"In the face of shifting customer expectation, the ubiquity of mobile, and a demand for brand interactions that are both personal and immediate, companies must adapt. This means doing away with the old ways of engaging with, and rewarding customers. The opportunity to turn apathy into active loyalty by meeting the expectations of the ever-demanding consumer exists now. It is only by rethinking loyalty to deliver something that truly adds value to consumers that brands will benefit from an engaged and committed customer base," concluded Christopher Evans.

Notes to Editors 

About the research 

Independent research was conducted by SSI Research in Singapore during January 2016 on behalf of Collinson Group. 6,125 consumers within the top 10-15 percent of earners in Australia, Brazil, China, France, Hong Kong, India, Singapore, the United Kingdom, the United States of America and the United Arab Emirates were polled online.

About Collinson Group 

Collinson Group (http://www.collinsongroup.com) is a global leader in influencing customer behaviour to drive revenue and value for clients. 

The Group offers a unique blend of industry and sector specialists who together provide market-leading experience in delivering products and services across four core capabilities: Loyalty, Lifestyle Benefits, Insurance and Assistance.

The group provides unrivalled insight and expertise around affluent consumers and frequent travellers, creating and delivering products and services that increase engagement, loyalty and value for customers.

We have 25 years' experience, with 28 global locations, servicing over 800 clients in 170 countries, employing 1,900 staff, and managing over 20 million end customers. Our clients include: MasterCard, VISA, Diners, Cathay Pacific, British Airways, Air France KLM and InterContinental Hotels Group.

Collinson Group comprises leading brands including: Priority Pass, Columbus Direct, ICLP, Collinson Latitude.

SOURCE Collinson Group