It's tougher than ever to elicit brand loyalty from customers today. A multitude of competitive choices, user-driven reviews, and low entry barriers make switching brands very easy. So how does a brand marketer get customers to remain loyal?
One method is a brand loyalty program. According to Bond Brand Loyalty's new 2015 Loyalty Report, enrollment in brand loyalty programs is up and views of loyalty programs are positive. On average, a consumer participates in more than 13 loyalty programs. Over three-quarters (76 percent) of respondents believe loyalty programs "are part of their relationships with brands," and 34 percent say if it weren't for a loyalty program, they would not be loyal to a brand. Almost half (43 percent) of loyalty program participants are very satisfied with loyalty programs, and 49 percent agree they spend more with a brand now than before joining a program.
While consumers are generally positive about such programs, their active engagement is slipping -- of the 13 programs they belong to, consumers are, on average, active in less than 7 of them. Interestingly, while visits to loyalty program websites declined in the last year, 48 percent of respondents say they would like to engage with loyalty programs via a mobile device.
Most loyalty programs depend on discounts or other point-driven incentives. Bond Brand Loyalty's believes, however, "The challenge for brands is that discounts are not sustainably differentiating, and many brands cannot simply continue to one-up or out-discount the competition while still expecting to remain profitable." Instead, "marketers (and customers) will be well served to ensure the program is designed to authentically meet customers' needs, in ways that go beyond a focus on discounts and the dividends issued per $1 spent, while also enabling an experience that is both easy and enjoyable."