Global consumers now expect real-time interactions with brands on a platform of their choosing. These interactions should be highly personalized and relevant, and as ever, consumers expect to be rewarded for their continued custom. Brands that are not innovating and addressing evolving customer expectation will simply be left behind.
New research from the UK’s Collinson Group finds three major changes:
1. Traditional loyalty programs are becoming less engaging for affluent middle class consumers, with 35% saying they ‘can’t be bothered’-compared to 18% in 2014
2. personalized, relevant loyalty initiatives are effective-80% of financial services programs encourage higher spending
3. Financial services appear best placed to respond, with highest customer loyalty across eight industries
There is growing apathy among the affluent middle class towards existing loyalty programs according to research released by Collinson Group.
The survey shows that consumers are less likely to recommend a brand to friends or less likely to refrain from switching to a competitor as a result of current loyalty program compared to two years ago. Membership of programs is also lower across eight industries including grocery, retail, hospitality, and airlines than in 2014.
The research polled 6,125 of the top 10-15% of earners from Australia, Brazil, China, France, Hong Kong, India, Singapore, the United Kingdom, the United States of America and the United Arab Emirates. This group of affluent middle class consumers is highly prized by global brands due to their higher spending potential, as well as the aspirational influence they have on other consumers.
Collinson Group identified four global tribes, or groups of people, who share common traits that cut across age, gender and international boundaries. First identified in 2014, these tribes have proved very useful in gleaning a deeper context of the affluent middle class, who prioritize family, altruism and enriching experiences.
Each has its own nuances, whether it is a desire to save for the future or see the world, but one common thread among all tribes in the 2016 research is a high expectation of brands. Nearly three-quarters (69%) expect high quality, consistent customer service however they interact with a brand. The same percentage expect brands to be easy to do business with, and 67% value the flexibility to choose the rewards and benefits they are offered.
When asked what would encourage higher and more frequent spending on their preferred brands, half of respondents requested a loyalty program where it is easy to earn, redeem and adapt to their personal preferences.
However, there is growing apathy among the affluent middle class towards existing loyalty programs. Over a third (35%) of respondents stated they could not be bothered with them, twice as many who held this view in August 2014.
Additionally, the three most popular loyalty programs by industry-supermarkets, airlines and credit cards-all saw declining membership numbers in the same timeframe:
• 64% are members of supermarket loyalty programmes, down from 70 percent
• 55% hold frequent flyer memberships, down from 65%
• 48% participate in credit card programs, down from 63%
Of all the industries surveyed, 70% of the affluent middle class felt loyal or extremely loyal to their bank, the highest across any sector. Almost two-thirds felt the same way about their credit card provider. These two sectors beat 8 other categories including technology providers like Apple (60%), supermarkets (57%), and clothing brands (46%).
Many people have stayed with the same bank for a number of years, which may be due to general apathy. However, this is rapidly changing as new disruptors enter the market and provide tailored digital and mobile services that legacy institutions are not yet offering. Banks are in a position to set the agenda by providing value that customers appreciate, thanks to the considerable data held on record and the existing level of perceived loyalty.
Banking loyalty programs were found to encourage 82% of members to spend more, while credit card initiatives positively influenced 79% of respondents.
The data suggests that recent moves made by financial services providers to develop more personalized and digital services are beginning to pay off. The research also uncovered increases in the levels of trust in financial services’ ability to manage personal data, and faith in institutions to act in their customers’ best interests.
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