Brand Marketers Unsure of Loyalty Program Effectiveness

Despite the fact that numerous brands today have a loyalty marketing strategy in place, many remain unsure about their strategy’s efficacy and continue to seek the most effective one they can find, according to a new study from loyalty and engagement solutions provider CrowdTwist and brand marketing event developer Brand Innovators.

In addition, more than one-third (38 percent) of brands do not deem their current loyalty efforts as a success or a failure, so says the study, which further found that even for the 26 percent of respondents that do not have formal loyalty programs, informal methods are being deployed to encourage loyalty.

The study, which details a survey of 234 digital marketers at Fortune 500 brands from March 2016 to April 2016, says the majority of its loyaltysurvey’s respondents value both the engagement and the transactional ROI of loyalty campaigns. In fact, 31 percent of all respondents ranked “driving engagement” as the main focus of their loyalty programs.

Brand marketers recognize that in order for loyalty programs to be effective, they must be multichannel, the report offers. Multichannel is an increasing area of focus, with 88 percent of respondents saying executing coordinated campaigns across channels is important and relevant to loyalty efforts. Of all strategies, multichannel integration of consumer data is increasingly a “must” and not a “nice to have,” as consumer journeys have become increasingly fragmented across devices and channels. Limiting channels prohibits the amount of data collected and used, as well as the impact of the program’s effectiveness in engaging and driving spend.

Of the loyalty programs being executed, the most successful have multiple layers of distribution and reward. A whopping 88 percent of respondents with multichannel loyalty programs rate themselves as a success, yet only 17 percent have such programs in place. Of that percentage, nearly all deem their tactics successful. In addition to reaching multiple channels, these programs offer rewards beyond discounts, including brand experiences, free products and special access. Doing so allows brands to form stronger relationships with consumers, increase engagement and spend, and ultimately strike a balance between enticing new customers while keeping existing ones happy.

However, barriers to success exist in the area of technology, with technological deployment/resources and data management being the primary and secondary hurdles, the study explains. Among respondents, nearly two-thirds (63 percent) cited the inability to perform data integration from disparate sources as the primary inhibitor of loyalty program adoption. In a related question, just more than half (53 percent) ranked technical hurdles as bigger barriers to the success of current loyalty efforts than dollars allocated.

“More than money, it is technical aspects that a majority of marketers feel hold them back from effective loyalty programs,” the study says. “However, financial muscle behind programs can allow brands to adopt effective platforms and software management systems.”

The full study is available here.