Loyalty program success depends on activity not volume

“Volume is for vanity, activity is for sanity.” The engagement of members in loyalty programs is essential to its success says Adam Posner, loyalty specialist and author of the annual study For Love or Money.

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While some companies may boast of swollen loyalty program member numbers, how active these members are with the program is what matters most. This can vary by brand and buying behaviours, and the levels of engagement are trending down, says Posner.

“So that's a bit of a worry for loyalty programs,” he says.

“Program propositions really, the experience, the proposition, the value have to lift their game.”

Interaction and personalisation are two other key trends that Posner is watching.

Posner says that the four pillars of personalisation being the medium, the message, the member and the moment are all gaining traction when it comes to loyalty programs. Members interacting with programs through card linking versus other methods has also seen a significant increase, trending upwards by 400 per cent in 2021.

“Card linking, I'm sure you've heard of, has become very prominent in 2021 and will be a big area again as it becomes more mainstream. So that's that simple pay, earn as you go or integrated into the experience.”

Trust is another key area of focus, where organisations can consider the net data trust score of their programs.

“How much do you trust your program with the information that you're giving them? That's from a consumer's point of view, and that's not such a great result at the moment.”

While loyalty programs’ trust score is a negative result this year, Posner says it has improved.

“Programs are getting better in trust, and transparency with the data and the value exchange as we know."

Posner believes that for loyalty programs to become more valuable, they need to start by adding more value to the lives of their customers.

“Solving some of their problems, giving them more utility in the program, adding them into more of a community connection piece,” says Posner.

“So programs that have got the opportunity to create more passion points will really lift their game in terms of interaction and engagement.”