Want Satisfied Customers? Make Your Loyalty Program Easy to Use

Offering better rewards may not be the best way for banks to foster customer loyalty.

A new study from Maritz Loyalty Marketing in Toronto found that a main driver of customer satisfaction with financial-services firms' loyalty programs is how easy they are to use, rather than the financial incentives they offer. The survey also showed that banks need to balance their customers' need for communication with privacy concerns.

The 2013 Maritz Loyalty Report, released today, is the company's first look at attitudes toward loyalty programs in the United States. Previous studies focused on Canada.

It found that the average U.S. consumer belongs to 7.4 loyalty programs across all industries, including retailers, airlines, hotels and financial service firms. But 53% stopped participating in at least one program in the past year. This figure underscores the need for companies to design programs that meet their customers' needs, the authors of the study say.

The financial-services sector had the second-highest level of customer satisfaction with their loyalty programs, at 73%. Customers of JPMorgan Chase's Ultimate Rewards program recorded the highest satisfaction levels, followed by American Express' Membership Rewards and Citi's Thank You Preferred programs.

The five top factors determining the level of satisfaction were whether the program meets the customer's needs, the ease of redeeming rewards, the quality of rewards available, total earning potential and the number of ways to earn points.

While 94% of survey respondents overall said that they enjoyed receiving communications through their loyalty programs, some personalization efforts can make them uncomfortable.

More than a quarter of the respondents — 29% — said they would be discouraged from joining rewards program if it required too much personal information, and 24% said that privacy concerns could deter them.

Overall, however, the survey's results showed broad customer satisfaction with rewards programs and other brand-loyalty efforts; 80% of respondents said that they believe participating in loyalty programs is worth the effort involved.