Dive Brief:
- Only one-quarter of consumers say they are loyal to almost all of the loyalty programs to which they belong, according to a survey from AnswerLab, a research-led experience strategy firm.
- Nine in 10 consumers say their favorite brands deliver convenience, value and ease, according to the survey of 1,500 U.S. consumers.
- However only 61% of consumers feel genuinely known or recognized by their favorite brands, exposing a gap between functional experience and emotional connection. “It’s the line between a brand customers use and a brand customers keep,” AnswerLab CEO Megan Malli told CX Dive in an email.
Dive Insight:
Loyalty program enrollment should not be confused for lasting brand allegiance. To do so is a mistake, Malli told CX Dive.
“Enrollment is a behavior,” Malli said. “Loyalty is a relationship. Most brands are measuring one and assuming they're earning the other.”
Olga Lopategui, founder and principal consultant of Restaurant Loyalty Specialists, describes it as “loyalty with a capital L, that warm and fuzzy feeling.” For restaurants, that takes form in the “inability to not stop at the door of the restaurant when you're on that street.”
“When I look at loyalty programs, I actually prefer to call them rewards programs, because that's what they do,” Lopategui said. “Those generally, in most cases, don't come to generate the capital L loyalty, but they're very, very effective and very productive at driving incremental visits, driving incremental spend, and essentially accomplishing the very tangible marketing goals — not warm and fuzzy feelings as much.”
Most consumers engage with loyalty programs based on financial benefits, according to Malli. But true allegiance is driven by relationships, experience and brand values.
“The brands consumers described as genuinely loyalty-worthy had one thing in common: None of that loyalty was driven by a program,” Malli said. “It was driven by what the brand stood for and how it behaved when it cost them something.”
One of the largest roadblocks to lasting loyalty is the reciprocity gap, Malli said. “Consumers feel they hold up their end — they return, they spend, they recommend — and brands don't hold up theirs.”
Recognition makes consumers more likely to return. A Toast survey found that half of diners said human recognition — staff remembering a name or a usual order — was the No. 1 factor that made them feel valued. Points-based loyalty reward came in at a distant second, selected only by 22% of respondents.
“Lasting loyalty runs on something harder to build: The sense of being genuinely known,” Malli said.
