New Valuedynamx global research reveals the
value of joyful reward redemption in driving loyalty program value
and highlights opportunities to enhance satisfaction in reward
earning and redemption offerings
A new international research study conducted by Valuedynamx, a
Collinson company and leading global provider of curated,
data-driven purchase rewards, highlights ripe opportunities for
companies to enhance customer satisfaction and long-term engagement
via loyalty programs. The study found that personalized,
simplistic, gratifying, and frequent loyalty program reward earning
and redemption opportunities strongly align with consumer
expectations. These offerings also significantly increase greater
satisfaction and more frequent customer interactions since they
provide better perceived value for shoppers’ time and money.
“According to our research, forward-thinking brands must obsess
over ensuring their loyalty program members derive equal, if not
more, value than they invest,” said James Berry, Managing Director
at Valuedynamx. “To optimize this value exchange, brands must
understand their members on a deeper, more personal level to make
them feel appreciated and cherished. This means providing ease of
use, helpful recommendations, and most importantly, reward options
that resonate and drive feelings of gratification. With
satisfaction comes engagement — and an increase in the rate at
which consumers earn and spend their rewards. This ongoing ‘earn
and burn’ cycle directly correlates with more frequent touchpoints
that can drive increased revenue potential and loyalty program
success for businesses.”
Valuedynamx’s Power of Satisfaction Research, which surveyed
more than 5,500 consumers enrolled in loyalty programs, uncovered
the following key takeaways about what drives consumer
satisfaction, engagement, and value in modern loyalty programs.
Simplicity and Satisfaction Drive Customer Loyalty and
Engagement
There is a direct correlation between customer satisfaction and
the rate at which loyalty program members engage in the program by
redeeming/spending ("burning") and earning rewards ("earning").
Programs that exhibit a high spend rate often find that it equates
to a higher earn rate and more satisfied members, likely thanks to
more tailored reward and redemption options. In fact, consumers are
willing to accept (and remain satisfied with) slightly lower
monetary rewards if they are better personalized to their
preferences for airlines, hotels, banks, and retailers.
With consumers juggling more apps, platforms, and digital
services than ever, it should come as no surprise that the number
one characteristic of a desirable and satisfying loyalty program is
a simple redemption process. This simplicity extends to ease of use
and cost-saving, with redemption options with the brand, savings,
and easy-to-track balance and reward eligibility being the next
most desirable program traits.
In general, the study found bountiful opportunities for brands
to make customers feel their spending is worthwhile — leading to
enhanced customer satisfaction in key areas such as redemption
value, cost savings, and product offerings. Consumers surveyed
often highlighted disappointment and dissatisfaction in reward
value/discount savings, disproportionate savings relative to their
spend, and dissatisfaction with limited selections of a brand’s
product range.
Consumers Want Choices but Lack Options
There is a substantial opportunity for brands to enhance loyalty
programs and satisfy their customers by expanding reward redemption
options. This is evidenced by the fact that about two-thirds of
loyalty program members are less than completely satisfied with the
redemption options available to them. That same number of
respondents actively seek to earn loyalty currency when rewards
align with their individual preferences (such as the option to
redeem for experiences and rewards from a variety of their favorite
brands).
While the most popular types of loyalty currency are cashback
and gift cards, the vast majority (90%) of program members want the
flexibility to redeem loyalty points with multiple brands. Despite
this overwhelming demand, many loyalty programs still limit
redemption options to their own brand while fewer programs offer
rewards and discounts across multiple brands. Further, nearly half
of loyalty program members desire experiential reward options, but
only 25% currently have access to them.
Brands looking to increase their “earn and burn” rate can turn
to program characteristics most associated with complete
satisfaction, such as the ability to redeem for memorable
experiences, options to redeem with other brands, brand options
that resonate with their interests, personalized reward options,
and reward recommendations based on past purchases.
There is Strong Consumer Demand for Value and Personalized
Rewards
Redemption events are not self-sufficient in driving future
earning. Instead, the study found that loyalty program satisfaction
is derived from a positive redemption event that creates joy when
consumers feel the time and effort they have invested in a loyalty
program has been sufficiently rewarded (called “redemption joy”).
This joy can be nurtured when programs go above and beyond to
create it — particularly through personalized rewards.
Approximately 30% of respondents expressed a preference for
rewards based on their past purchases and when asked to rank which
loyalty program traits increased their redemption satisfaction,
helpful recommendations for reward redemptions ranked highest,
closely followed by the ability to redeem high-value rewards and
being offered unique and interesting reward options.
Customers want rewards that reflect their individual tastes and
past interactions with brands, and introducing artificial
intelligence (AI) to find the rewards that best resonate with
customers’ interests will drive redemption joy. The research even
found that about two-thirds of respondents that see clear value in
engaging with loyalty programs would be willing to share
personalized data to better inform personalization strategy. This
data sharing is becoming a cornerstone of modern loyalty programs
and provides brands with a deeper understanding of customer
preferences and behaviors to create rewards and experiences that
resonate on an individual level.
Consumers Use Loyalty Rewards at High Frequency for Different
Purposes
As economic challenges persist, consumers are “earning and
burning” rewards frequently; 83% of respondents reported redeeming
loyalty currency at least once in the last three months and half
reported redeeming in the last month. Supermarket, credit card,
airline, and hotel loyalty programs rank among the top-preferred
options, likely due to their versatility and ability to offset
everyday spending. Supermarket programs boast some of the most
active loyalty program members as 82% of respondents reported
redeeming rewards on groceries, while airline and hotel programs
appeal to loyalty members looking to earn and burn more often to
save on high-value rewards such as free flights or luxury hotel
stays.
From a regional perspective, supermarket loyalty programs are
particularly popular in Europe and Australia, reflecting the
routine nature of grocery shopping in these regions. In contrast,
credit cards are used more frequently in the United States (43%)
and Brazil (39%), where consumers might be leveraging their cards
for a variety of purchases to accumulate cashback. Meanwhile,
airline loyalty programs are most popular in China (40%) and Hong
Kong (37%), where the focus is often on saving points for
significant travel-related rewards.
“These research findings present a significant opportunity for
loyalty programs to re-evaluate and enhance their offerings,
particularly by integrating personalized and experiential rewards
that resonate with consumer preferences,” added Berry. “It’s not
enough just to drive reward redemption, as unsatisfying or
uninspired rewards do not actively drive richer, more frequent
engagements. Instead, complementary and personalized ‘earn and
burn’ behavior is more likely to create ongoing loyalty program
satisfaction. By seizing the opportunities identified by this
research, loyalty programs can better meet the needs of their
members and drive greater long-term customer engagement.”
About the Valuedynamx Power of Satisfaction Research
2024
A global study of 5,500+ respondents belonging to a loyalty
program with 1+ airline, bank, credit card, or hotel. Survey
respondents were surveyed in January 2024 via PureSpectrum. To
download the final report, click here.
About Valuedynamx
Valuedynamx is a leading global provider of curated, data-driven
omnichannel purchase rewards. Part of Collinson, a group
acknowledged for delivering the world's most valued travel
ecosystem, Valuedynamx combines its expertise across payments,
card-linking, affiliate marketing, earning, and redemption into a
single entity that delivers relevant and engaging solutions for its
clients. Valuedynamx enhances customer loyalty and drives
transactional engagement for some of the world’s largest airlines,
banks, financial institutions, and hotel groups. Valuedynamx
supports over 400 million consumers, maintains 50,000 retail and
travel partners, and provides more than 400,000 rewards in more
than 180 countries.
Collinson has more than 30 years’ loyalty and customer
engagement experience, and more than 10 years focused on delivering
loyalty commerce solutions. The organization has been at the
forefront of loyalty innovation, continually evolving and building
capability to meet the changing needs of clients and their
customers.
For more information visit www.valuedynamx.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240710842395/en/
MEDIA CONTACT: Tara Strazdas The Fletcher Group
732.275.7732 Tara@fletchergroupllc.com