Dive Brief:
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Although 75% of consumers surveyed approved of retailers giving special treatment to loyalty program members, 32% of American and Canadian shoppers said they don’t know which tier they fall into even in their own favorite retail rewards memberships, according to a report entitled "Fears for Tiers: 2014 Colloquy Study on Membership Status in Loyalty Programs" by loyalty consulting company Colloquy.
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Multiple-tiered programs with “gold, silver, and bronze” levels are outdated and cause confusion for consumers, Colloquy found. The company in February surveyed 3,077 consumers in the U.S. and Canada.
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Half of those surveyed said they spend more or otherwise change their behavior because they want to achieve a higher level in a rewards program, and 33% in lower loyalty tiers don’t think they’re properly rewarded for their loyalty, the survey also found.
Dive Insight:
This survey showed at once the value of loyalty programs as well as the way they can turn off customers. In this tough retail environment, companies should take a close look at their loyalty program structures and ensure that they reward those customers who favor them.