Loyalty programs carry heavy power

A majority of consumers are more likely to visit retailers that offer loyalty programs, according to new research by Nielsen.

The “Global Survey of Loyalty Sentiment” which polled respondents in 58 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America, revealed that 84 per cent were more likely to visit shops that offer loyalty programs (marketing programs that reward members with purchase incentives).

“While the concept of loyalty is nothing new, we are seeing a significant surge in retailers – and particularly those in developing economies – investing in loyalty programs that give them valuable insight into how to better meet customer needs,” said Julie Currie, senior VP, global loyalty, Nielsen.

Seventy-five per cent of respondents said that discounted or free products was the most valuable loyalty program benefit. Enhanced customer service and free shipping incentives were important to 44 per cent and 42 per cent of respondents, respectively.

Good customer service was important to more than half of respondents in Latin America (59 per cent) and Asia-Pacific (53 per cent). Also, exclusive deals (41 per cent) and special shopping hours (36 per cent) mattered most among loyalty program participants in Asia-Pacific.

Meanwhile, free shipping incentives were important for 46 per cent of North Americans.

Nearly one-quarter (24 per cent) of respondents claimed complete loyalty to mobile phone brands, mobile service providers and financial institutions, the highest percentages reported globally across the 16 categories measured.

While approximately 40 per cent of consumers surveyed said they were not loyal and likely to switch brands in the alcoholic beverages (43 per cent), snacks (39 per cent), carbonated beverages (38 per cent) and cereal (37 per cent) categories.

Thirty-nine percent of global respondents said they were not loyal to online retailers.

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