Putting data in the driver’s seat Insight - Putting data in the... · customer purchasing habits,...
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Delivering Proven Profitability
[email protected] 0116 412 0017 www.gi-solutionsgroup.com
Delivering Proven Profitability
Putting data in the driver’s seat
A STUDY LOOKING AT THE POWER OF LOYALTY SCHEMES TO INFLUENCE AND SHAPE CONSUMER ATTITUDES AND BEHAVIOUR IN THE AGE OF BIG DATA
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ContentsGI Insight Putting data in the driver’s seat
Page 3 Key Findings
Page 4 Methodology
Page 5 Introduction
Page 8 Research
Page 14 Conclusion
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Key FindingsGI Insight Putting data in the driver’s seat
• Overall, the research shows that loyalty schemes are a very effective tool for gaining customer insight that can be used to build stronger customer relationships, and that the vast majority of consumers see real value in these programmes
• 76% of the 1000-plus consumers surveyed say they are only happy to hand over personal data to companies if they have, “a proper loyalty scheme in place”, while the same proportion expect “any credible retail chain” to have a programme
• 64% of consumers are happy for a company to hold and use a considerable amount of detail on their personal preferences and circumstances as long as it uses this information to send them“relevant, timely offers and communications”
• 37% of respondents note that, in several instances, companies they regularly buy from have treated them as new customers when they went online because, without a loyalty scheme, it had no way of knowing who they were and what their purchasing history was
• 87% of consumers say that a company having a good loyalty scheme has led them to continue buying from that brand over the last few years
• 82% of consumers confirm “now that things are picking up” they will continue buying from businesses whose loyalty schemes have delivered value in the last few years
• 33% have even switched purchasing from one brand to another in the previous year because the company they moved their business to had a loyalty programme they liked
• The presence of an effective loyalty scheme has a bigger impact on female consumers than male, the research shows:
90% of women say a “good loyalty scheme” has led them to continue buying from a company over the last few years, versus 84% of men
86% of women plan to continue spending with companies that have delivered good value through loyalty schemes in recent years, compared to 79% of men
• Younger consumers are more likely to require a proper loyalty scheme if they are to share personal information:
18-24-year-olds are most demanding in this area, with 89% wanting a loyalty scheme in place if a business is collecting their personal information
55-64-year-olds are much less stringent in this area, with only 69% suggesting that the lack of a scheme is a potential deal-breaker
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MethodologyGI Insight Putting data in the driver’s seat
• 1,008 UK consumers were surveyed, with the results collated in April 2015
• The survey sample was broadly representative of the UK according to gender, age, region and social class
• The respondents were asked to name the things that most excite them about a loyalty scheme, listing up to four
• Margin of error: plus/minus 3%
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IntroductionGI Insight Putting data in the driver’s seat
A well-run loyalty scheme provides a comprehensive platform for establishing and extending ongoing relationships with a company’s customers. The trouble is too few companies - even some that have loyalty schemes - seem to understand what the fundamental goal of these programmes is. It is not simply a means of getting customers to stick around by throwing them a few points, discounts or freebies, for which the company then expects them to pledge eternal brand loyalty. In the age of Big Data and omnichannel customer engagement, it has to be much more.
One of the great misconceptions about the term ‘loyalty scheme’ is that ‘rewards scheme’ is an exact synonym. But a loyalty scheme is a far more complex animal than a straightforward rewards scheme. Simply put, not all rewards schemes are full-fledged loyalty programmes. A comprehensive and sophisticated loyalty programme tracks the transactions between a customer and a brand - and in some cases other interactions, such as online browsing and abandoned baskets - and then uses the resulting data to gain insight into customer purchasing habits, other shopping behaviour, needs, personal circumstances, interests and preferences. This level of loyalty scheme is not the equal of the simple customer continuity programme offering free-coffee stamp cards or collectable tokens; it is not merely a platform for enabling promotions, replaceable with Groupon, Wowcher, Amazon Local or other promotional coupon and voucher websites. A loyalty scheme is a highly sophisticated means of capturing customer data that also provides a built-in mechanism for then applying the resulting insight in a logical and highly targeted way.
Certainly, in the minds of consumers, a loyalty scheme is largely about the rewards, but for companies it has to address much more fundamental goals. Relationships, not rewards, are the key to successful loyalty schemes. Rewards are indeed important for driving consumer take-up and participation in schemes: our previous research report, The Lure of Loyalty, looked at the need for a complex array of rewards that attract a range of consumers and reflect what the data tells a company about its best and most loyal customers. But for the brand, rewards are not the primary raison d’être of a loyalty scheme. A lot of press coverage and online discussion on loyalty schemes focuses on the rewards, with some commentators raising the alarm over the value of the ‘unclaimed points’ - as if the reward take-up is the be all and end all when discussing a programme’s success. These commentators talk of a reward offering affecting consumer behaviour but not of the use of loyalty data to analyse customer activity and respond to it more effectively.
Unfortunately, this level of one-dimensional thinking when it comes to loyalty schemes may be more widespread than it should be. Recent research out of the United States indicates that this fundamental misunderstanding is widespread in company boardrooms and marketing departments. According to research by Omnicom’s customer engagement hub, Kitewheel, although 73% of consumers feel loyalty programmes should be a way for brands to show their commitment to loyal customers, 66% of marketing executives believe they are a way for consumers to demonstrate loyalty to a business. It seems companies think that simply
Looking beyond the need to reward
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joining a scheme should obligate consumers to stick to a brand. Plainly, few consumers see it that way.[1]
While consumers should rightfully feel that, from their point of view, the aim of schemes is to reward them for their business, companies operating schemes need to take a colder, more analytical approach to them and forget about the emotional need to feel that consumers should demonstrate their gratitude by joining and continuing to participate in these. Data and its resulting insight is the company’s reward - and a valuable one at that. A loyalty scheme is a value exchange: companies give something the consumers deem to have worth (such as redeemable points, vouchers and coupons, exclusive offers, first access to new products and deals, special privileges and perks, and preferential treatment) in return for consumers providing information on themselves and permitting their actions to be tracked and analysed. This exchange not only gives companies the ammunition they need to retain their best and most promising customers, but it arms them to extend those relationships, encouraging more and more frequent spending and flagging up opportunities for cross-selling and upselling.
But the use of this information is not the automatic entitlement of companies merely because they have a loyalty scheme - the thinking that the Kitewheel research would seem to suggest - but a privilege that is earned through the effective and responsible use of customer data. Companies have to continually earn the right to utilize scheme members’ loyalty programme data by using it judiciously to improve the communications they send, inform interactions, better the service they
provide, and win the confidence and trust of scheme members. The Kitewheel research showed that 28% of companies concede that the reason consumers most often unsubscribe from emails is that they are receiving too many irrelevant offers, while the consumer half of the survey shows that an underwhelming 10% of respondents find the majority of the marketing sent to them is relevant to their purchasing interests. [2]
Our own research demonstrates clearly that just having a scheme with rewards is not enough to keep members engaged. The 2014 whitepaper, Loyalty Frequency: Who’s Tuning In, showed that although 94% of UK consumers belong to at least one loyalty programme, just 47% of scheme members remain active participants on average and only 27% feel the associated brands are effectively analysing their needs and sending them relevant offers. Thus, the evidence indicates that data is the most vital component of a successful loyalty programme, and that it is essential to employ the resulting customer insight to keep members engaged and further develop their relationship with the brand - through personalised, tailored and targeted communications.
A loyalty programme is a powerful tool for tracking, understanding and responding to consumer behaviour. At its most fundamental level, a scheme enables a company to reward, listen and communicate. In its most complex form, it provides a rich layer of information to guide, bolster and fine-tune an array of company activities related to its interactions with customers, including segmentation, messaging, marketing strategy, service provision, product development, stock selection, purchase channel growth,
IntroductionGI Insight Putting data in the driver’s seat
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business location choice and other functions. The result is that this more detailed knowledge of customers’ behaviour patterns, requirements and preferences pays off with improved profits.
To gauge just how successful schemes are in gaining consumer confidence and trust, establishing the importance of these programmes in the minds of consumers, winning customer loyalty and impacting purchasing behaviour, we surveyed just over 1,000 people. The results indicate that the loyalty scheme remains a vital element in the customer engagement mix of any business.
IntroductionGI Insight Putting data in the driver’s seat
1 Bill Bronaugh, The Two-way Street of Customer Loyalty Sometimes Goes the Wrong Way, Loyalty 360, 14 January 2015.
2 Ginny Marvin, Marketers, You’re Thinking About Loyalty Programs All Wrong and Other Consumer Disconnects, Marketing Land, 10 October 2014
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ResearchGI Insight Putting data in the driver’s seat
Overall: Findings show the modern loyalty scheme a touchstone in the age of Big Data
The results of the survey should come as welcome news to virtually any company invested in a loyalty scheme, as the research reveals that these programmes broadly present an extremely effective means of building bonds with customers and provide a strong springboard for the further expansion of those relationships.
Overall, the survey revealed that consumers do see real value in loyalty schemes and are happy for companies to capture and use their data - as long as it is of benefit to them in terms of providing value through the programmes and related offers.
The most telling finding on the value of a loyalty scheme in the age of Big Data was that this type of programme is a critical pillar in the data-gathering infrastructure of a business today, as 76% of consumers made clear that they do not want to hand over personal data to companies “unless they have a proper loyalty scheme in place”. The research also brought home the particular importance to retailers of having a scheme in place in this day and age with the survey showing that the same proportion - 76% - say they expect “any credible retail chain” to have a programme in place.
37%
64%
76%
76%
63%
36%
24%
24%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I can think of several instances recently where a company that I regularly buy from has acted as if I am a new customer when I have gone online
with them – because it has no loyalty programme and therefore no way of knowing
who I am and my buying history.
I am happy for a company to have quite a lot of detail on my preferences and personal circumstances so long as it acts on this
informaGon with relevant, Gmely offers and communicaGons.
I expect any credible retail chain today to have a loyalty scheme.
I don’t like handing over details about myself to a company unless they have a proper loyalty
scheme in place.
Figure A: AOtudes to loyalty scheme data
Agree Disagree
33%
82%
87%
67%
18%
13%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
In the last 12 months, I have switched my purchasing from one company to another
because the second had a loyalty programme that I liked.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those
companies in the coming years.
Where a company has a good loyalty scheme, this has led me to conGnue buying from them
over the last few years.
Figure B: Impact of loyalty schemes on consumer behaviour
Agree Disagree
74%
79%
84%
78%
86%
90%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I expect any credible retail chain today to have a loyalty scheme.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those
companies in the coming years.
Where a company has a good loyalty scheme, this has led me to conGnue buying from them over the
last few years.
Figure C: Impact of loyalty schemes by gender
Female Male
89%
81% 79% 74%
69% 73% 71%
67% 68%
59% 60% 63%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure D: AOtudes to loyalty scheme data by age group
I don’t like handing over details about myself to a company unless they have a proper loyalty scheme in place.
I am happy for a company to have quite a lot of detail on my preferences and personal circumstances so long as it acts on this informaGon with relevant, Gmely offers and communicaGons.
89%
92% 90%
88%
79%
83% 82%
84%
87%
83%
77%
81%
65%
70%
75%
80%
85%
90%
95%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure F: How loyalty schemes impact buying behaviour of different age groups
Where a company has a good loyalty scheme, this has led me to conGnue buying from them.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those companies in the coming years.
63%
51%
41%
29% 26% 27%
51% 51%
46%
27%
19%
15%
0%
10%
20%
30%
40%
50%
60%
70%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure E: How loyalty schemes shape aOtudes of different age groups
I can think of several instances recently where a company that I regularly buy from has acted as if I am a new customer when I have gone online with them – because it has no loyalty programme and therefore no way of knowing who I am and my buying history.
In the last 12 months, I have switched my purchasing from one company to another because the second had a loyalty programme that I liked.
[email protected] 0116 412 0017 www.gi-solutionsgroup.com
Delivering Proven Profitability
ResearchGI Insight Putting data in the driver’s seat
When it comes to giving up their data to a loyalty scheme, 64% of consumers are happy for a company to hold and use a considerable amount of information on them as long as it uses this data to send them “relevant, timely offers and communications”. Today’s consumers are savvy to the use of data to strengthen customer relationships and most are unsurprised by its use in suggesting further purchases that match their needs, communicating servicing offers, and otherwise extending the commercial ties between brand and customer.
Indeed, many consumers expect companies they buy from regularly to keep track of who they are and what their interests and preferences are - and to reflect this knowledge in their interactions with them. In fact, many consumers take note when companies fail to recognise them as regular customers, particularly when they go online after previously purchasing in-store.
According to the survey, 37% of respondents note that they could think of several instances in which a company they regularly purchased from treated them as unknown customers online because, without a loyalty scheme, it had no way of knowing who they were and what their buying history was.
The research also demonstrates that loyalty schemes have a very real and direct impact on purchasing behaviour, fostering loyalty to brands with programmes perceived to be providing good value to members. The consumers surveyed confirm that not only have well-run loyalty programmes encouraged them to keep purchasing from brands that have good schemes, but that they intend to keep doing so even as the economy strengthens.
37%
64%
76%
76%
63%
36%
24%
24%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I can think of several instances recently where a company that I regularly buy from has acted as if I am a new customer when I have gone online
with them – because it has no loyalty programme and therefore no way of knowing
who I am and my buying history.
I am happy for a company to have quite a lot of detail on my preferences and personal circumstances so long as it acts on this
informaGon with relevant, Gmely offers and communicaGons.
I expect any credible retail chain today to have a loyalty scheme.
I don’t like handing over details about myself to a company unless they have a proper loyalty
scheme in place.
Figure A: AOtudes to loyalty scheme data
Agree Disagree
33%
82%
87%
67%
18%
13%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
In the last 12 months, I have switched my purchasing from one company to another
because the second had a loyalty programme that I liked.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those
companies in the coming years.
Where a company has a good loyalty scheme, this has led me to conGnue buying from them
over the last few years.
Figure B: Impact of loyalty schemes on consumer behaviour
Agree Disagree
74%
79%
84%
78%
86%
90%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I expect any credible retail chain today to have a loyalty scheme.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those
companies in the coming years.
Where a company has a good loyalty scheme, this has led me to conGnue buying from them over the
last few years.
Figure C: Impact of loyalty schemes by gender
Female Male
89%
81% 79% 74%
69% 73% 71%
67% 68%
59% 60% 63%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure D: AOtudes to loyalty scheme data by age group
I don’t like handing over details about myself to a company unless they have a proper loyalty scheme in place.
I am happy for a company to have quite a lot of detail on my preferences and personal circumstances so long as it acts on this informaGon with relevant, Gmely offers and communicaGons.
89%
92% 90%
88%
79%
83% 82%
84%
87%
83%
77%
81%
65%
70%
75%
80%
85%
90%
95%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure F: How loyalty schemes impact buying behaviour of different age groups
Where a company has a good loyalty scheme, this has led me to conGnue buying from them.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those companies in the coming years.
63%
51%
41%
29% 26% 27%
51% 51%
46%
27%
19%
15%
0%
10%
20%
30%
40%
50%
60%
70%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure E: How loyalty schemes shape aOtudes of different age groups
I can think of several instances recently where a company that I regularly buy from has acted as if I am a new customer when I have gone online with them – because it has no loyalty programme and therefore no way of knowing who I am and my buying history.
In the last 12 months, I have switched my purchasing from one company to another because the second had a loyalty programme that I liked.
[email protected] 0116 412 0017 www.gi-solutionsgroup.com
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ResearchGI Insight Putting data in the driver’s seat
The survey reveals that an overwhelming 87% of consumers say that, where a company has a good loyalty scheme, they have continued purchasing from that brand over the last few years. A significant proportion of consumers - 33% - have even switched brands because the company they went to had a loyalty programme that appealed to them. What’s more, 82% of consumers confirm “now that things are picking up” they will continue buying from businesses whose loyalty schemes have delivered value in the last few years.
Thus we see that loyalty programmes are not about the short-term win but the ongoing relationship, so even as the economy moves to a stronger position it is critical for companies to make the best use of their schemes to keep members engaged. Clearly, loyalty programmes remain a valuable tool for generating customer knowledge in both the good times and the bad - providing information that can be used to not only retain business, but to improve all customer-facing facets of an operation.
Gender factor: Loyalty schemes more likely to impact women’s consumer behaviour
The research showed that there were few major differences between men and women in terms of their attitudes towards loyalty schemes, but the findings did indicate that the buying behaviour of female consumers was more affected by a useful loyalty scheme. Most significantly, the research reveals that more women than men feel schemes have kept them loyal to certain brands during more difficult economic periods over the last few years, and that they are more likely to remain loyal because of these programmes even as the economy improves.
The survey shows that 90% of female consumers say that the presence of a “good loyalty scheme” has led them to continue buying from a brand over the last few years, compared to 84% of men. The research also reveals that, as things pick up, 86% of women plan to continue spending with brands that have delivered good value via their loyalty schemes over the last few years, versus 79% of men.
The survey reveals that an overwhelming 87% of consumers say that, where a company has a good loyalty scheme, they have continued purchasing from that brand over the last few years. A significant proportion of consumers – 33% – have even switched brands because the company they went to had a loyalty programme that appealed to them. What’s more, 82% of consumers confirm “now that things are picking up” they will continue buying from businesses whose loyalty schemes have delivered value in the last few years.
Thus we see that loyalty programmes are not about the short-‐term win but the ongoing relationship, so even as the economy moves to a stronger position it is critical for companies to make the best use of their schemes to keep members engaged. Clearly, loyalty programmes remain a valuable tool for generating customer knowledge in both the good times and the bad – providing information that can be used to not only retain business, but to improve all customer-‐facing facets of an operation.
Gender factor: Loyalty schemes more likely to impact women’s consumer behaviour
The research showed that there were few major differences between men and women in terms of their attitudes towards loyalty schemes, but the findings did indicate that the buying behaviour of female consumers was more affected by a useful loyalty scheme. Most significantly, the research reveals that more women than men feel schemes have kept them loyal to certain brands during more difficult economic periods over the last few years and that they are more likely to remain loyal because of these even as the economy improves.
The survey shows that 90% of female consumers say that the presence of a “good loyalty scheme” has led them to continue buying from a brand over the last few years, compared to 84% of men. The research also reveals that, as things pick up, 86% of women plan to continue spending with brands that have delivered good value via their loyalty schemes over the last few years, versus 79% of men.
74%
79%
84%
78%
86%
90%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I expect any credible retail chain today to have a loyalty scheme.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those companies in the coming years.
Where a company has a good loyalty scheme, this has led me to conOnue buying from them
over the last few years.
Figure C: Impact of loyalty schemes by gender
Female Male
37%
64%
76%
76%
63%
36%
24%
24%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I can think of several instances recently where a company that I regularly buy from has acted as if I am a new customer when I have gone online
with them – because it has no loyalty programme and therefore no way of knowing
who I am and my buying history.
I am happy for a company to have quite a lot of detail on my preferences and personal circumstances so long as it acts on this
informaGon with relevant, Gmely offers and communicaGons.
I expect any credible retail chain today to have a loyalty scheme.
I don’t like handing over details about myself to a company unless they have a proper loyalty
scheme in place.
Figure A: AOtudes to loyalty scheme data
Agree Disagree
33%
82%
87%
67%
18%
13%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
In the last 12 months, I have switched my purchasing from one company to another
because the second had a loyalty programme that I liked.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those
companies in the coming years.
Where a company has a good loyalty scheme, this has led me to conGnue buying from them
over the last few years.
Figure B: Impact of loyalty schemes on consumer behaviour
Agree Disagree
74%
79%
84%
78%
86%
90%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I expect any credible retail chain today to have a loyalty scheme.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those
companies in the coming years.
Where a company has a good loyalty scheme, this has led me to conGnue buying from them over the
last few years.
Figure C: Impact of loyalty schemes by gender
Female Male
89%
81% 79% 74%
69% 73% 71%
67% 68%
59% 60% 63%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure D: AOtudes to loyalty scheme data by age group
I don’t like handing over details about myself to a company unless they have a proper loyalty scheme in place.
I am happy for a company to have quite a lot of detail on my preferences and personal circumstances so long as it acts on this informaGon with relevant, Gmely offers and communicaGons.
89%
92% 90%
88%
79%
83% 82%
84%
87%
83%
77%
81%
65%
70%
75%
80%
85%
90%
95%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure F: How loyalty schemes impact buying behaviour of different age groups
Where a company has a good loyalty scheme, this has led me to conGnue buying from them.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those companies in the coming years.
63%
51%
41%
29% 26% 27%
51% 51%
46%
27%
19%
15%
0%
10%
20%
30%
40%
50%
60%
70%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure E: How loyalty schemes shape aOtudes of different age groups
I can think of several instances recently where a company that I regularly buy from has acted as if I am a new customer when I have gone online with them – because it has no loyalty programme and therefore no way of knowing who I am and my buying history.
In the last 12 months, I have switched my purchasing from one company to another because the second had a loyalty programme that I liked.
[email protected] 0116 412 0017 www.gi-solutionsgroup.com
Delivering Proven Profitability
ResearchGI Insight Putting data in the driver’s seat
Women are also slightly more willing than men to share their data with a firm because it has a proper loyalty scheme in place (77% of female respondents versus 75% of male). A higher proportion of women are also more likely to expect “any credible retail chain” to have a loyalty programme in place (78% versus 74% of men). The differences are relatively small but indicate that women are more likely to demand a credible loyalty scheme in return for their data, their trust, and, ultimately, their business.
Age impact: Younger consumers more influenced by loyalty programmes
The research reveals that, although the digitally savvy younger generations of consumers may be more used to the casual sharing of information via personal devices, they place a higher value than their elders on having an established, formal relationship with businesses tracking them. In general, the younger the consumer,
the more likely they are to demand that a company have a proper loyalty scheme in place if they are to hand over details about themselves to the business.
The most demanding in this area are 18-24-year-olds, 89% of whom want to see a loyalty scheme in place at a firm collecting their personal information, while 55-64s are much less strict about this, with only 69% seeing the lack of a loyalty scheme as a potential deal-breaker.
While all consumers are generally happy for companies to have quite a bit of detail on their preferences and personal circumstances - as long they use this information to deliver relevant and timely offers and communications - younger consumers are somewhat more agreeable to handing over their data if it is applied effectively.
37%
64%
76%
76%
63%
36%
24%
24%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I can think of several instances recently where a company that I regularly buy from has acted as if I am a new customer when I have gone online
with them – because it has no loyalty programme and therefore no way of knowing
who I am and my buying history.
I am happy for a company to have quite a lot of detail on my preferences and personal circumstances so long as it acts on this
informaGon with relevant, Gmely offers and communicaGons.
I expect any credible retail chain today to have a loyalty scheme.
I don’t like handing over details about myself to a company unless they have a proper loyalty
scheme in place.
Figure A: AOtudes to loyalty scheme data
Agree Disagree
33%
82%
87%
67%
18%
13%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
In the last 12 months, I have switched my purchasing from one company to another
because the second had a loyalty programme that I liked.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those
companies in the coming years.
Where a company has a good loyalty scheme, this has led me to conGnue buying from them
over the last few years.
Figure B: Impact of loyalty schemes on consumer behaviour
Agree Disagree
74%
79%
84%
78%
86%
90%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I expect any credible retail chain today to have a loyalty scheme.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those
companies in the coming years.
Where a company has a good loyalty scheme, this has led me to conGnue buying from them over the
last few years.
Figure C: Impact of loyalty schemes by gender
Female Male
89%
81% 79% 74%
69% 73% 71%
67% 68%
59% 60% 63%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure D: AOtudes to loyalty scheme data by age group
I don’t like handing over details about myself to a company unless they have a proper loyalty scheme in place.
I am happy for a company to have quite a lot of detail on my preferences and personal circumstances so long as it acts on this informaGon with relevant, Gmely offers and communicaGons.
89%
92% 90%
88%
79%
83% 82%
84%
87%
83%
77%
81%
65%
70%
75%
80%
85%
90%
95%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure F: How loyalty schemes impact buying behaviour of different age groups
Where a company has a good loyalty scheme, this has led me to conGnue buying from them.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those companies in the coming years.
63%
51%
41%
29% 26% 27%
51% 51%
46%
27%
19%
15%
0%
10%
20%
30%
40%
50%
60%
70%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure E: How loyalty schemes shape aOtudes of different age groups
I can think of several instances recently where a company that I regularly buy from has acted as if I am a new customer when I have gone online with them – because it has no loyalty programme and therefore no way of knowing who I am and my buying history.
In the last 12 months, I have switched my purchasing from one company to another because the second had a loyalty programme that I liked.
[email protected] 0116 412 0017 www.gi-solutionsgroup.com
Delivering Proven Profitability
12
ResearchGI Insight Putting data in the driver’s seat
Close to 70% of consumers in the age bands covering the 18-44 range are happy to share personal information so long as it is used to better serve their needs, but the figure is closer to 60% for older consumers, who appear to be slightly less willing to give companies the benefit of the doubt in this area.
The survey also indicates, however, that younger consumers have higher expectations when it comes to being treated in a personalised manner: 63% of the 18-24-year-olds, 51% of the 25-34s and 41% of the 35-44s say they can think of several instances in which a company they buy from regularly treated them as an unknown customer online because the lack of
a loyalty scheme meant the business had no way of recognising their existing relationship. Conversely, fewer than 30% of consumers aged 45 and over note this as a problem. These findings suggest that those consumers more firmly fixed in the digital age, with a bigger digital data footprint - mainly the youngest - may be more used to personalised treatment by brands and are more likely to expect it. For this group, sharing data via a loyalty scheme and subsequently receiving appropriately tailored offers and communications has become second nature, and thus more central to their brand relationships.
37%
64%
76%
76%
63%
36%
24%
24%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I can think of several instances recently where a company that I regularly buy from has acted as if I am a new customer when I have gone online
with them – because it has no loyalty programme and therefore no way of knowing
who I am and my buying history.
I am happy for a company to have quite a lot of detail on my preferences and personal circumstances so long as it acts on this
informaGon with relevant, Gmely offers and communicaGons.
I expect any credible retail chain today to have a loyalty scheme.
I don’t like handing over details about myself to a company unless they have a proper loyalty
scheme in place.
Figure A: AOtudes to loyalty scheme data
Agree Disagree
33%
82%
87%
67%
18%
13%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
In the last 12 months, I have switched my purchasing from one company to another
because the second had a loyalty programme that I liked.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those
companies in the coming years.
Where a company has a good loyalty scheme, this has led me to conGnue buying from them
over the last few years.
Figure B: Impact of loyalty schemes on consumer behaviour
Agree Disagree
74%
79%
84%
78%
86%
90%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I expect any credible retail chain today to have a loyalty scheme.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those
companies in the coming years.
Where a company has a good loyalty scheme, this has led me to conGnue buying from them over the
last few years.
Figure C: Impact of loyalty schemes by gender
Female Male
89%
81% 79% 74%
69% 73% 71%
67% 68%
59% 60% 63%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure D: AOtudes to loyalty scheme data by age group
I don’t like handing over details about myself to a company unless they have a proper loyalty scheme in place.
I am happy for a company to have quite a lot of detail on my preferences and personal circumstances so long as it acts on this informaGon with relevant, Gmely offers and communicaGons.
89%
92% 90%
88%
79%
83% 82%
84%
87%
83%
77%
81%
65%
70%
75%
80%
85%
90%
95%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure F: How loyalty schemes impact buying behaviour of different age groups
Where a company has a good loyalty scheme, this has led me to conGnue buying from them.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those companies in the coming years.
63%
51%
41%
29% 26% 27%
51% 51%
46%
27%
19%
15%
0%
10%
20%
30%
40%
50%
60%
70%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure E: How loyalty schemes shape aOtudes of different age groups
I can think of several instances recently where a company that I regularly buy from has acted as if I am a new customer when I have gone online with them – because it has no loyalty programme and therefore no way of knowing who I am and my buying history.
In the last 12 months, I have switched my purchasing from one company to another because the second had a loyalty programme that I liked.
[email protected] 0116 412 0017 www.gi-solutionsgroup.com
Delivering Proven Profitability
This willing exchange of data for better individualised service, rewards, perks and other benefits has meant that younger consumers feel they have gotten value from the loyalty schemes they use - leaving them more wedded to the brands running good programmes. Indeed, the research shows that younger consumers have been more influenced by loyalty programmes through the economic lean times of the last few years, with 25-34-year-olds leading the way: 93% of the consumers in this age group said the availability of a good scheme has kept them buying from a particular brand “over the last few years”, compared to 79% of the 55-64s. And with things picking up, consumers under 55 are more likely to remain loyal to a brand because of a scheme, with 87% of those in the 35-44 age band confirming that this is the case - versus 79% of 55-64-year-olds.
The research also demonstrates that loyalty schemes can have a big impact as acquisition tools when it comes to younger consumers,
with roughly half of those in the under-45 age range saying they had switched from one company to another in the previous 12 months because the second had a scheme that appealed to them. Older consumers, on the other hand, are far less likely to jump from one brand to another because to the loyalty programme - fewer than 30% of 45-54s said this had been the case over the previous year, while fewer than 20% of those 55 and older had done so.
Clearly, loyalty schemes, while well-established over the past two decades as powerful customer management tools, are no less important to younger consumers than to their older counterparts. In fact, the evidence makes the case that these younger digital natives, used to having their data gathered through a range of touch points, place even greater emphasis on loyalty schemes as the basis for an ongoing customer relationship than their parents and older siblings.
ResearchGI Insight Putting data in the driver’s seat
37%
64%
76%
76%
63%
36%
24%
24%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I can think of several instances recently where a company that I regularly buy from has acted as if I am a new customer when I have gone online
with them – because it has no loyalty programme and therefore no way of knowing
who I am and my buying history.
I am happy for a company to have quite a lot of detail on my preferences and personal circumstances so long as it acts on this
informaGon with relevant, Gmely offers and communicaGons.
I expect any credible retail chain today to have a loyalty scheme.
I don’t like handing over details about myself to a company unless they have a proper loyalty
scheme in place.
Figure A: AOtudes to loyalty scheme data
Agree Disagree
33%
82%
87%
67%
18%
13%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
In the last 12 months, I have switched my purchasing from one company to another
because the second had a loyalty programme that I liked.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those
companies in the coming years.
Where a company has a good loyalty scheme, this has led me to conGnue buying from them
over the last few years.
Figure B: Impact of loyalty schemes on consumer behaviour
Agree Disagree
74%
79%
84%
78%
86%
90%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I expect any credible retail chain today to have a loyalty scheme.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those
companies in the coming years.
Where a company has a good loyalty scheme, this has led me to conGnue buying from them over the
last few years.
Figure C: Impact of loyalty schemes by gender
Female Male
89%
81% 79% 74%
69% 73% 71%
67% 68%
59% 60% 63%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure D: AOtudes to loyalty scheme data by age group
I don’t like handing over details about myself to a company unless they have a proper loyalty scheme in place.
I am happy for a company to have quite a lot of detail on my preferences and personal circumstances so long as it acts on this informaGon with relevant, Gmely offers and communicaGons.
89%
92% 90%
88%
79%
83% 82%
84%
87%
83%
77%
81%
65%
70%
75%
80%
85%
90%
95%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure F: How loyalty schemes impact buying behaviour of different age groups
Where a company has a good loyalty scheme, this has led me to conGnue buying from them.
Now that things are picking up, the loyalty schemes that have delivered good value to me in the last few years will keep me buying from those companies in the coming years.
63%
51%
41%
29% 26% 27%
51% 51%
46%
27%
19%
15%
0%
10%
20%
30%
40%
50%
60%
70%
18-‐24 25-‐34 35-‐44 45-‐54 55-‐64 65+
Figure E: How loyalty schemes shape aOtudes of different age groups
I can think of several instances recently where a company that I regularly buy from has acted as if I am a new customer when I have gone online with them – because it has no loyalty programme and therefore no way of knowing who I am and my buying history.
In the last 12 months, I have switched my purchasing from one company to another because the second had a loyalty programme that I liked.
[email protected] 0116 412 0017 www.gi-solutionsgroup.com
Delivering Proven Profitability
14
ConclusionGI Insight Putting data in the driver’s seat
The research findings make it abundantly clear that the loyalty scheme has become a mainstay of modern customer insight and engagement. In the age of Big Data, the consumer is not only much more aware of the use of personal data by organisations of all stripes, but of its value. The responses to the survey demonstrate that the vast majority of consumers are more comfortable sharing personal information or having it captured by a business if that company has a properly structured loyalty programme - indeed, they only see a retail firm as “credible” if it has a scheme in place. In short, the loyalty scheme is critical to wining consumer confidence and trust.
It is also evident that consumers expect something in return for their permission to use their data. This payback can consist of rewards, benefits and preferential treatment by the brand using the data. But consumers today
also demand that companies use the data they gather to screen out irrelevant communications that might otherwise be sent to them, while at the same time providing them with offers and an overall service that more precisely meet their needs and preferences. Loyalty schemes today have to be engineered to enable firms to do this. If not, they risk alienating and losing customers.
The key for companies is to follow the data. The need to gather the pieces of information they need, analyse this data, gain insight into the customer segments they serve and act on it. If they do this effectively, they can positively influence customer behaviour and gain an edge over competitors. A well-executed loyalty scheme thus creates a stronger bond with the individual customer, who can then be encouraged to spend more and more often - the big payoff for the company.
[email protected] 0116 412 0017 www.gi-solutionsgroup.com
Delivering Proven Profitability
[email protected] 0116 412 0017 www.gi-solutionsgroup.com
Delivering Proven Profitability
Putting data in the driver’s seat
A STUDY LOOKING AT THE POWER OF LOYALTY SCHEMES TO INFLUENCE AND SHAPE CONSUMER ATTITUDES AND BEHAVIOUR IN THE AGE OF BIG DATA
Delivering Proven Profitability