Capgemini researched the loyalty programs of 160 global companies across 7 sectors including Retail, Banking, Consumer Products, Telecom, Airlines, Hotel Chains and Consumer Electronics. In addition, Capgemini also conducted a scan of 40,000 consumer conversations on social media to gauge customer sentiment towards loyalty programs.
The research revealed that most loyalty programs follow a basic transactional philosophy where rewards are based on purchase. Only a small minority of programs recognize and reward consumers for engaging and interacting with the brand in other meaningful ways. Furthermore, most loyalty programs lack personalization and fail to offer cross-channel redemption services. The negative social media sentiment on loyalty programs stemmed mainly from the lack of reward relevance, rigid reward structures, user experience issues with online channels, and poor customer service quality levels.
- Just 11% of loyalty programs offer personalized rewards based on a customer’s purchase history or location data
- 79% of loyalty programs use the mobile channel, and yet only 24% allow redemption through it
- 97% of loyalty programs are based primarily on purchases made by consumers
Loyalty programs need to focus on driving customer engagement
Seamless purchase experience at Sephora
- Integrate loyalty programs with the overall customer experience
- Deliver personalized customer experiences
- Conduct “Social Listening” to understand customer needs
- Reward members for social media engagement and advocacy
- Use gamification techniques to drive deeper participation
- Provide value beyond traditional rewards
For the “Fixing the Cracks: Reinventing Loyalty Programs for the Digital Age” report, through web-based research made in November and December 2014, Capgemini analyzed current loyalty programs of 160 global companies around the world across seven business sectors (Hotels, Airlines, Telecoms, Banking, Consumer Electronics, Consumer Products and Retail). In December 2014, it also conducted a scan of 40,000 consumer conversations on social media to gauge sentiment towards loyalty programs. Customer sentiment was analyzed using sophisticated sentiment analytics tools. In order to get an accurate view of the sentiment, the scan looked at opinions expressed by users, and not at questions and neutral comments.
To download a copy of the report visit – Fixing the Cracks: Reinventing Loyalty Programs for the Digital Age