Dive Brief:
- Consumers are seeking more substantial value from loyalty programs, with 85% saying they want better discounts, according to a Kobie survey of 5,000 global participants released Wednesday.
- The ability to track earnings is also important, particularly for paid loyalty programs. Two-thirds say they immediately appreciate the value of fee-based loyalty programs when they see how much they’ve saved in a year.
- More than 4 in 5 respondents said they would be interested in surprise earning opportunities.
Dive Insight:
Not only do customers want different rewards, but their approach to redeeming them varies as well — something grocers should keep in mind as they revamp or launch loyalty programs.
Kobie’s research found that about half of consumers are "savers," defined as those who earn points with a specific loyalty reward in mind, while one-third are "collectors" who earn points without a specific goal. Just one in five are considered "spenders" who redeem points as soon as they are eligible for a reward.
While monetary rewards are popular, loyalty programs can also benefit from offering a variety of rewards that go above and beyond transactional value. Prizes and experiences can help a program stand out, particularly among a brand’s most loyal customers.
Butcher Box takes this approach with its Sizzle Society loyalty program. The three-tiered program offers the equivalent of 2% back with each purchase for all members, but customers who reach the higher tiers can access experiential benefits like priority customer support and access to virtual Q&As with the company founder.
“The table stakes, if you will excuse the pun there, are offering points back,” Chief Commercial Officer Reba Hatcher told sister site CX Dive last month. “That is just a loyalty program. Nothing about that makes ButcherBox stand out, and nothing about that makes our program special. You can go to another company and get your 2% back.”
Several grocers are looking to their loyalty programs to boost their businesses. Albertsons’ loyalty program, which grew membership 14% year over year in its first quarter, will play an important role in the grocer’s future, CEO Susan Morris told The Wall Street Journal in an interview last month. Meanwhile, Sprouts Farmer Market is readying for the chainwide launch of its first loyalty program, which executives expect will be a tailwind for the next several years.
