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How Important Is Offering Loyalty Rewards or Special Offers to Consumers?
Prioritising customer retention over generating leads is perhaps the oldest rule in the business bible. One that applies just as much today as it ever has, extending to all types of online and bricks-and-mortar businesses alike.
But what’s interesting is how rather than remaining static, the number of shoppers who (quite rightly) believe they should be rewarded for brand loyalty is on the up. That’s according to an extensive study conducted by Hall & Partners, which took into account the opinions of more than 4,000 shoppers in the UK and USA.
Of particular interest was how younger shoppers – those between the ages of 18 and 24 – showed a particular keenness for loyalty programs. 51% of UK shoppers within this bracket ranked loyalty rewards among the top-three ways businesses can support their customers, falling to 39% for those in the US.
Growing Interest in Fair Rewards
Unsurprisingly, competitive deals were the single most important value proposition for the highest bracket of UK consumers – a priority for 60%. Loyalty rewards for regular shoppers came in at second with 51%, followed by demonstrating fair and amicable treatment of staff with 45%.
But while these figures may not prove particularly surprising on the surface, the extent to which they’ve shifted over recent years indicates a growing trend. When Hall & Partners last conducted their survey three years ago, just 17% of shoppers stated that loyalty rewards were an important factor when choosing brands.
Which meant that it was, by a considerable margin, the least significant of all factors they voted on.
According to Kurt Stuhllemmer, partner at Hall & Partners, the shift in priorities could be attributed to the fact that more people than ever before are struggling to make ends meet, and therefore expect to get something in return from the brands they do business with.
“Consumers are still adjusting purchasing decisions to a new higher cost of living,” he said.
“Brands need to work harder to make sure their value proposition is clear and strong as even everyday essential items become more discretionary. Throwing out occasional offers will not be enough to prove to customers that you’re on their side. Instead, brands need to deepen the relationship with them in meaningful ways to create value including treating employees fairly.”
“Asking what they can do to serve their customers better, make their lives easier or simply thank them for their loyalty. This is critical at a time when the pressure on ‘mental loads’ and ‘physical wallets’ is intense.”
Further to this, the study found that the vast majority of shoppers (75%) are happy to switch to other brands offering better prices, despite the fact that 73% would ideally prefer to stick with Brands they trust.
“This research underscores the profound impact of the economic challenges faced by consumers,” Stuhllemmer continued.
“While brand loyalty persists, it’s evident that we’re entering an era where consumers prioritise value and community over conspicuous consumption. Brands must pivot towards strategies that foster long-term relationships with customers, especially younger generations who demand more from the brands they support.”
“Prioritising a reassessment of customer loyalty should be a key focus for brands moving forward.”