Survey Examines Consumers' Perceptions, Behavior Of Card Reward Plans

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Why do consumers leave a loyalty or rewards card program after signing up? A new survey indicates the biggest reason is the time it takes to earn those points.

In a poll conducted by Maritz Loyalty Marketing, 70% cited the length of time it takes to build up points as the primary reason they dropped out. The number jumps to 79% in the critical 18 to 24 age group, the company reported.

"Marketers need to provide consumers with realistic and achievable goals," said Gail Sneed, market development director at Maritz Loyalty Marketing. "Particularly with the crucial college-age demographic, it's the chance to win or lose a lifelong customer."

Perceived Problems

The Maritz Poll also found that customer defection resulted from other perceived problems with rewards programs, including: "not being rewarded properly" (23%), "disliked the fee" (22%), "disliked the reward options" (20%), "program rules kept changing" (17%), "poor customer service" (16%) and "other programs seemed better" (18%).

High-income individuals ($125,000-plus) spend money and collect points at a faster rate, but they are particularly choosey and likely to comparison shop, the survey found. More than a quarter (27%) of this demographic left a rewards program because "another company's program seemed better" or they didn't like the reward options.

"The customer has to be able to believe that they can earn an appealing reward in a reasonable amount of time," advised Sneed. "Effective loyalty programs use analysis and modeling tools to ensure the right rewards are offered to the right customers and are achievable within a reasonable length of time. Programs that customize potential rewards based on the individual customer's hobbies and interests hugely increase reward program satisfaction."

The Maritz survey also revealed the importance of the Internet as a communication tool. When asked, most people prefer to be updated about their rewards programs through the Internet (58%), and 9% stated that they have even stopped participating in a rewards program because they receive too much mail from the company. This trend is even more common among customers in the 18 to 24 age group: 65% said they prefer communication about rewards programs via the Internet and 13% have stopped participating in a rewards program because they received too much mail from the company.

How Both Parties Can Win

"A robust loyalty program will include a link on the company's website where customers can immediately access their reward points, easily determine required point values, and redeem points with the click of a mouse," said Sneed.

According to Sneed, when companies make the extra effort to determine what customers really want and how to communicate with them, "both parties win."

The survey is based on 1,047 interviews with randomly selected adult participants in an online panel. Total group comparisons have a confidence interval of plus or minus 3 percent.

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