Millennials are much more open to fee-based loyalty programs than any other U.S. population segment, according to a new survey by research and analytics firm LoyaltyOne. The survey polled 1,005 U.S. consumers in May.
|62% would consider joining a fee-based rewards program if their favorite retailer offered one||75% of 18-24 year-olds and 77% of 25-34 year-olds would consider it|
|65% said customer rewards are worth paying for if relevant to their needs||79% of 18-24 year-olds and 76% of 25-34 year-olds said relevant rewards are worth paying for|
|47% said rewards in fee-based programs are better than rewards in free programs||61% of 18-24 year-olds and 54% of 25-34 year-olds said fee-based rewards are better|
“These results should attract the attention of brands considering a shift to fee-based loyalty programs as marketers look for ways to create competitive differences and lock in customer spend against a backdrop of waning program effectiveness and engagement challenges,” LoyaltyOne Consulting Associate Partner Lance Du Chateau said.
Du Chateau noted the survey found that 49% of overall respondents said all rewards programs seem alike. The perception of program sameness was even stronger among Millennials, where the scores were 57% for 18-24 year-olds and 52% for 25-34 year-olds.
“The perception that only a small minority shoppers will pay to play is a dated viewpoint”
“Brands have historically hesitated to explore new loyalty strategies because traditional programs were still novel in most spaces. However, this hasn’t been true for years. The perception that only a small minority shoppers will pay to play is also a dated viewpoint,” Du Chateau said. “Forty-two percent of consumers surveyed have already paid to join a program and 62% of respondents said they’d consider joining a fee-based rewards program if their favorite retailer offered one.”
Other key findings:
- Of the respondents who already participate in fee-based loyalty programs, 69% were enticed by free shipping, followed closely by special discounts at 67%
- Women (67%) are slightly stronger than men (64%) in their belief that rewards are worth paying for
- Respondents ranked grocery and mass merchandise as most appealing if compelling benefits were available through a fee-based program (35%), followed by credit card rewards (26%), specialty retail (13%), travel (18%) and restaurants (9%)
- 32% of 18-24 year-olds and 34% of 25-34 year-olds said they have never been offered membership in a fee-based program, vs. 25% of the general population