By Shannon Goldsmith, senior insight analyst, IGD
The latest IGD research uncovers what consumers really want from their loyalty schemes to identify the key features needed to influence behaviour.
The loyalty landscape developed rapidly from 2020-2022. After a couple of years of slower innovation as operators assessed their schemes, it seems busier than ever. However, while operators are pushing forward with innovation, new mechanics and rewards are emerging quickly, and consumers are starting to feel overwhelmed.
In our most recent consumer research, we ran online focus groups to understand the latest feelings towards loyalty and how consumers are using the schemes. We then validated this qualitative research with an online questionnaire of over 2,000 respondents. Combining the findings of this research, we found that there are three fundamental areas of loyalty schemes that operators must deliver on to keep consumers engaged – they must be easy, valuable and fair.
- Make it easy – two of the top three features of AFH loyalty schemes were around how easy it was to both collect and use points/stamps. They want to be able to easily understand how they earn, what they get for their loyalty, and how they can redeem these rewards
- Make it valuable – the most important part of a loyalty scheme is offering good deals and discounts. The rewards that consumers receive for their loyalty must have a tangible benefit or saving for them to be considered valuable
- Make it fair – the relationship between the consumer and the operator must feel equitable. If a consumer feels like they are putting in lots of effort for minimal reward, the schemes can feel ingenuine and consumers can feel undervalued.
Personalised deals are important to 66% of consumers with an AFH loyalty scheme, but there are also a number of concerns around data sharing and privacy – with just 40% of respondents happy to share their data to get personalised discounts.
Personalisation is more important to those who eat/drink out of the home most regularly (69%), but it still falls below the fundamentals of easy, valuable and fair. Newer elements of loyalty schemes like personalisation, gamification or tiered mechanics can work – but operators need to keep delivering on the core elements first.
What will success look like in the future?
We also asked consumers their hopes for the future of loyalty from away from home operators. These fell into four key categories, which stem from the fundamentals:
- Real rewards for real loyalty – make sure the loyalty scheme works as a real thank you to consumers for choosing to spend their money and time with you
- Minimise the physical barriers – make sure digital cards on apps can be added to mobile wallets, WiFi isn’t an issue in store and that apps aren’t constantly logging users out
- Make it easy for them to be loyal – make it easy for them to earn, redeem and choose their rewards so they feel like they’re getting the most out of them
- Keep the relationship two way – make sure that the push towards loyalty schemes doesn’t lose the emotional connection that AFH brands typically have with consumers by making it too transactional and conditional.
