48% of consumers say hurdles deter loyalty program sign-up

Dive Brief:

While retailers and brands continue to experiment with customer loyalty and rewards programs, about 48% of 1,000 consumers surveyed by Kobie Marketing for its "Loyalty in the Age of the Connected Consumer" report cited hurdles that could keep them from signing up for such programs.
More specifically, 26% of those surveyed said they won’t join a loyalty program if companies require too much information from the shopper, or the enrollment process takes too long. Another 22% said they would be deterred from joining such a program if it seems like it takes too long to earn and redeem points.
The study also found that 86% of surveyed consumers participate in loyalty programs primarily to collect and redeem points for rewards and that about 75% actively participate in three or fewer loyalty programs.

Dive Insight:

Many retailers and brands have realized that they need to build something that spurs more revenue and keeps customers coming back. Several big retailers — including Target, Kohl's and DSW — have expanded or tweaked their loyalty programs in recent months. These programs offer merchants a chance to collect more data about customer preferences and buying habits than they might otherwise possess, which ultimately can be used to personalize experiences and better serve customers.

Yet, loyalty and rewards programs have to go beyond just asking shoppers to fork over a bunch of their personal info for a vague promise of "points." Merchants may still have some work to do to figure out how to make these programs as appealing as possible, and how to make sign-up and the process of earning rewards as painless as possible.

For example, a recent survey from Oracle found that only 32% of consumers believe the rewards offers they receive from retailers are relevant, even though a much larger percentage of retailers believe they are providing rewards members with relevant offers.

In regard to program sign-up, the process may be a bit of a burden for a busy shopper. As the Kobie Marketing study further pointed out, one in three millennials and one in four members of the Gen X demographic says sign-up for these programs takes too long. Meanwhile, the study showed that 45% of millennials and 40% of Gen Z shoppers believe it takes too many purchases to earn and redeem points — not what merchants trying to woo these younger consumers want to hear.

These shortcomings are perhaps part of the reason why retailers such as Target, Kohl’s, Macy’s and others have been busy in recent months revising and augmenting their rewards programs. As they do so, they may take some comfort in the understanding that consumers appear to be generally interested in loyalty and rewards programs.

The Kobie study suggested that the vast majority of consumers are engaging in these programs, although participating in up to three programs may be the limit for many of them. Of those surveyed, 40% also said they prefer to be asked to join programs during the checkout process. If the interest is there, retailers and brands just need to make sure they can make sign-up quicker and less painful, and that they can deliver rewards that are worth the effort it takes to earn them.