The 2 Sides of Loyalty
By Jackson Lewis on May 04, 2017CHICAGO -- There are two kinds of loyalty consumers out there: those who want points they can spend instantly and those who want to accumulate their points for a larger reward.
That’s according to a recent study from marketing program provider Excentus, based in Dallas, and New York City-based Ipsos, an analytics firm. The study found that most consumers fall into two main groups. Those looking for instant gratification are referred to as Earn-and-Burn consumers, and those who save points are known as Save-for-Later consumers.
Each group of customers wants different rewards and uses from the loyalty programs of the businesses they frequent, and the report urges retailers to be aware of what slots their customers fall into and build offers into their loyalty program accordingly.
Here are some insights into the different types of loyalty consumers, what they want and how to market to them …
Rewards now
Let’s start with the Earn-and-Burners. These consumers are looking for programs that offer immediate discounts. They’re less interested in accumulating points over time.
More Earn-and Burners prefer to receive rewards or discounts on fuel than any other category. That said, only 16% of respondents in this category said they prefer rewards for fuel, indicating that preferences of what to spend rewards on varies greatly among those in this category.
True to form, 15% of these consumers usually redeem rewards within one month of earning them. This group would likely be amenable to programs that offer instant rewards for simply signing up for a program, especially if it involves fuel discounts.
Rewards later
Then there are the Save-for-Laters. These consumers tend to treat rewards as cash and save them up to make a purchase or payment.
The study found that families with children are more likely to save rewards for special occasions than those without, making families more likely to fall in the Save-for-Later group.
While everyone in this consumer category prefers accumulating points or rewards, exactly what they save them for varies. While 12% spend their points on gifts or treats, 9% save earned rewards for family and personal purchases. Others use them to pay off a credit-card balance.
This group would likely respond well to reward programs that allow members to reach higher levels of rewards. Their preference to work longer for a bigger reward may also make them more open to gamification, according to the study.
Anything for a buck
The study also provided a few statistics that apply to each group. It said that 39% of loyalty-program members enjoy saving money any way possible. This may seem like a no-brainer, but it is important to note. Sure, everyone likes to save money, but this statistic implies that nearly 40% of loyalty-program members will do just about anything to save money, indicating that they don’t mind jumping through a few hoops.
The study also found a third customer category that saves its points to donate to charities or other people, but these Greater-Good consumers make up only 2% of loyalty users. Clearly, when it comes to loyalty programs, consumers are looking out for themselves, and why not? One of the main reasons loyalty programs exist is for people to feel that they are being properly recognized for their continued patronage. It’s important to know what different consumers want out of loyalty and to stay ahead of expectations.