Overall Loyalty Program Growth is Slowed, but Far From Stopped

Loyalty programs continue to grow as a whole, but increasing demands have slowed that growth over the last two years. This, from Colloquy’s newly released 2017 Loyalty Census, a report analyzing trends regarding the customer loyalty industry over time. Total consumer enrollment currently sits at 3.8 billion memberships, an uptick of 15 percent from 2015 but down from the 26 percent growth found in that year’s report.
 
When it comes to the motivation behind loyalty program enrollment and engagement, convenience trumps even value, with 53 percent of survey participants noting “easy to use” as a primary driver of participation, followed by “gives me great discounts” and “easy to understand” at 39 and 37 percent, respectively.
 
Conversely, program disengagement is driven by earn-redeem cadence, with 57 percent noting that taking too long to earn points or miles is a top reason for abandoning programs. With many programs moving to aspirational rewards, it’s become apparent that the longer redemption cycle may take its toll on engagement numbers, especially in the absence of additional smaller, more attainable rewards.
 
Qualitatively, the report demonstrates a need for brands to create 1:1 marketing experiences in order to bring programs in line with those found at industry leaders.
 
“The membership growth slowdown signals the U.S. loyalty market is maturing and retailers need to up their game on how to attract and retain members within their loyalty programs,” said Melissa Fruend, LoyaltyOne Global Solutions partner and COLLOQUY Census author. “In order to improve loyalty marketing, brands must optimize the overall experience by creating more personalized and relevant experiences for their best customers.”
 
In spite of recent struggles in the vertical, retail continues to lead the pack in terms of total enrollment: over 1.5 billion memberships places it above the travel and hospitality sector, which boasts a likewise impressive 1.1 billion members across all programs.
 
It’s clear from the report that while the loyalty sector has only continued its upward trend, additional sophistication is going to be the key to maintaining that growth and avoiding disengagement.

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