Brands continue to push loyalty schemes despite drop in membership

By Lucy Carroll | 25 August 2015

Australians with loyalty cards such as FlyBuys have become more active in their programs, despite an overall drop in the number of people signing up for schemes, according to research commissioned by loyalty marketing company Directivity and digital agency Citrus.

The For Love or Money survey of about 1300 consumers claims 59% of members are now active in all of their programs, with more men than women committed to gaining rewards. About 45% of members were active in their programs in 2013.

But the reseach reveals that Australian consumers are less likely to be members of loyalty programs than they were two years ago, with 84% of people enrolled in one card, compared to 88% in 2013. The average number of memberships has also dropped from four to 3.8 per person.

People are more likely to buy more from brands with a program, compared to 2013, with 16% purchasing items they didn’t need just to earn rewards.

Report co-author and head of Directivity Adam Posner said while some brands question the value of loyalty programs, the research “provides key competitive advantage for brands.”

“This research is a good news story for loyalty marketers. While consumers are telling us they’re more selective with their programs, they’re also more active and engaged,” he said.

“Programs also drive impulse purchasing as evidenced by 16% of members who buy things they didn’t need just to earn rewards, which jumps to 26% for men under 45.”

But a 2014 report by consumer advocacy group Choice found loyalty programs offer very little to their members, with most programs offering such poor rewards that consumers on average save less than one dollar for every $100 spent.

The companies behind the loyalty cards are the big winners, according to the Choice report, with retailers gaining information about specific spending habits including product preferences and choices which is then stored in sophisticated databases and used for targeted marketing.

According to the Directivity report, almost half of all members believe the quality of loyalty programs have improved, but more than a quarter don't think the programs communicate well with their members.

Most consumers want immediate results from their cards, with almost 80% listing instant price discounts as the most important reward.

Supermarket programs such as Coles FlyBuys and Woolworths Everyday Rewards top the list for consumers who believe programs are performing well for their members. Qantas Frequent Flyer and Virgin velocity also scored well.

Traditional cards trump technology in the loyalty scheme industry, with two thirds of consumers still wanting cards and only 10% preferring a loyalty app.

Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au

Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.

Read more about these related brands, agencies and people

comments powered by Disqus