Most consumers welcome loyalty apps

Warc, 30 July 2014

NASHVILLE, TN: Saving money is the main motivation for American consumers willing to participate in a loyalty program, although the option of receiving rewards attracts more than a third, new research has shown.

According to a poll of 3,162 loyalty program users in the US by TechnologyAdvice, a Tennessee-based insights company, saving money and receiving rewards were cited by 57.4% and 37.5% respectively.

Earning VIP status came in as a distant third as a primary motivator (3.6%) while just 0.8% felt social recognition was an important driver.

Of particular interest for brands looking to expand the effectiveness of their card-based systems, or increase adoption of their physical rewards programs, the report found almost 6-in-10 (59%) would be more likely to join a loyalty program that offered a smartphone app.

This compared to just 41% who said they would be “less likely” or “much less likely” to join such a program.

Despite the clear majority being open to loyalty programs that offer smartphone apps, the report found a slightly higher proportion still preferred card-based programs (36.8%) over digital ones (33%). 

TechnologyAdvice concluded this could indicate that US consumers are open to digital, but may not want to rely exclusively on an app or lose the convenience of a physical card. A similar proportion (29.9%) was undecided or had no preference.

While consumers may be encouraged to join loyalty programs because of digital apps, the report also showed that they don't find social rewards appealing.

A full 83.3% said they would be either “less likely” or “much less likely” to participate in a program that relied on social rewards, such as Foursquare-style apps.

But more encouragingly for brands like Starbucks that operate loyalty programs based on exclusivity-based rewards, 56.8% said they would be “more likely” or “much more likely” to participate in such a program – although, of course, only a tiny proportion cited it as their primary motivation, suggesting it's seen as an “extra”.

Overall, more than four-fifths (82.4%) said they would be “more likely” or “much more likely” to shop with brands and retailers that offered loyalty programs.

TechnologyAdvice said this suggests that once consumers “buy-in” to a loyalty program, then they are “highly likely” to reward a brand with repeat business.

Data sourced from TechnologyAdvice; additional content by Warc