In today’s competitive market, maintaining the health of your loyalty program is crucial for sustaining customer engagement and brand loyalty. Kobie’s 2024 Consumer Research Report sheds light on the key factors that influence members to disengage from loyalty programs and offers actionable insights to keep the loyalty engine running smoothly.
Why Members Disengage
Understanding why members disengage from a program is the first step in diagnosing potential issues. The research identifies two critical points of disengagement: early and late. Early disengagement occurs when members sign up but never engage, often due to slow reward accumulation (49%), unappealing benefits (31%), or lack of ongoing interest after an initial offer (26%). On the other hand, late disengagement happens after prolonged participation, with reasons including slow reward accumulation (52%), reduced purchasing from the brand (49%), and a stagnant program experience (32%).
Keeping Your Program Healthy
- Accelerate early engagement: To combat early disengagement, it’s essential to provide an accelerated path to rewards without making the initial offers too rich. This balance ensures members find value quickly while staying motivated for the long term.
- Regularly review benefits: Continuous evaluation of your program’s features and benefits is vital. Engaging members with relevant and appealing perks can prevent them from feeling the program is outdated or uninteresting.
- Sustain engagement over time: Maintaining member interest requires a dynamic program structure. Regular updates and fresh benefits keep the experience exciting and engaging, reducing the likelihood of disengagement.
The Appeal of Choice and Optionality
Members crave flexibility in how they earn and redeem rewards. The ability to choose benefits and redemption options significantly impacts their engagement. The report reveals that members prefer programs that allow them to use points like currency (84%), gift points (57%), and exchange points between programs (53%). Ensuring your loyalty program offers diverse options for earning and spending points can enhance member satisfaction and loyalty.
The Cash Back Mindset Shift
Interestingly, while cash back remains a popular redemption option, its perceived value has evolved. Members now see cash back as a flexible tool rather than a limiting choice. This shift highlights the importance of offering varied redemption options and communicating their benefits effectively to members.
Implications for Program Health
To keep your loyalty program in optimal condition, consider these critical questions:
- Are your benefits aligned with member expectations and preferences?
- Do you offer sufficient options for using loyalty currency?
- Are redemption messages a prominent part of your communications strategy?
- How well do you know your members, and do you act on that knowledge?
By addressing these questions and leveraging the insights from Kobie’s research, you can boost your loyalty program’s health, keeping the check engine light off and driving sustained member engagement.
Looking to explore even more loyalty insights? Access Kobie’s full 2024 Consumer Research for four additional sections packed with valuable findings and actionable strategies, including:
- Boosting Loyalty Through Personalized Experiences
- Engaging Members Beyond Transactions
- The Power of Tiers in Loyalty Programs
- Navigating Loyalty Program Innovations
Read the full report to supercharge your loyalty strategy with insights that keep your brand ahead of the game!
Written By: Dr. JR Slubowski
Dr. JR Slubowski, Kobie’s Associate VP of Strategic Consulting focuses on creating engaging data-driven experiences for brands that customers love. His commitment to craft critical thought-out strategies allows him to perform complex customer analytics and to drive results with relevant data. He specializes in customer analytics, marketing communications and strategic planning.
