How to increase customer loyalty using data-backed insights

New data reveals how to boost customer loyalty and retention

To better understand how consumers experience loyalty programs, our study addressed the perceptions and experiences of program promoters and detractors from 50 top brands in these industries:

• Auto
• Telecom
• Lodging
• Retail
• Gas
• Gaming
• Financial
• Quick-service restaurants
• Grocery

Through the study, we learned that the best loyalty programs achieve ideal brand outcomes of increased customer visits, spend and wallet share. But even the best programs have room for improvement in the two areas customers want most from a loyalty program: value and ease.

Is your customer loyalty program working?

While making it easy to participate in a program is essential, the most important aspect of a loyalty program is the value it delivers. Customers are generally drawn to a wide range of benefits,

ranging from utilitarian (savings) to symbolic (recognition). That could look like:

• Variety of rewards
• Exclusive rewards
• Earned discounts
• Exclusive promotions or offers
• Offers that go beyond point-of-sale discounts

The study uncovered that the importance of perceived value over effort is true across all industries. Even when a program minimizes the amount of effort required by a participant, it’s usually not enough to have an impact if the benefit-to-burden ratio is off. If a program’s ratio is right for its industry, the brand will build up loyal customers who are more likely to turn into brand advocates.

How customer engagement and loyalty create brand advocates

Rather than relying on demographics like income, customer tenure or other factors, we used Net Promoter Score (NPS) as the measurement for our analysis. We asked customers to identify as a promoter or a detractor, then analyzed the components within each brand and industry that contributed to their feelings.

The research dives deep into the difference between promoters and detractors and how your loyalty program can reach both audiences. All brands have detractors, but brands can turn detractors into advocates via strong loyalty programs. How you do that depends on the change you’re trying to make in your programs.