Retailers Need to Provide More Value in Loyalty Programs
More than a third (38 percent) of customers generally avoid participating in retail loyalty programs, mostly because they just don't see the value in joining, according to a new report from CFI Group and Radial.
For consumers who do not join loyalty programs, 53 percent say it is simply because they do not like giving out their personal information or are concerned that their identities could get stolen. To reach these customers, retailers can better operationalize and promote their fraud protection services so consumers can be assured that their personal information will be protected, the report recommends.
Another 39 percent, however, do not sign up for loyalty programs simply because they don't believe loyalty programs are worth it. Retailers need to find ways to make these programs relevant to consumers, the report also recommends.
The study points to three specific actions retailers can take to make their loyalty programs more compelling:
- Offer a faster delivery option, something preferred by 63 percent of all retailer customers;
- Offer personalized customer service, as 41 percent of retail loyalty members say that being recognized by the customer care agent makes loyalty much more likely; and
- Offer fast and flexible returns and exchanges, something preferred by 55 percent of retail loyalty members.
Retailers have an obvious incentive to add more customers to their loyalty programs, given that the research found that retail loyalty members are 12 percent more satisfied, 10 percent more loyal, and 13 percent more willing to recommend than other customers.
"Retailers understand that they need to offer meaningful options to meet their customers' needs," said Carey Stoker, senior vice president of customer care services at Radial, in a statement. "Faster delivery and flexible returns are important, but equally important, if not more so, is equipping customer care agents with the ability to immediately recognize the customer as a loyalty member and provide personalized service for that customer. A personalized experience not only enhances loyalty but drives additional revenue for retailers."