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Loyalty Equals Discounts, Free Products for Consumers

Posted on 12.01.2013

Loyalty programs aren't exactly new, but consumers still seem to love the marketing-focused programs that reward members with purchase incentives. And new research from Nielsen confirms it, with 84 percent indicating they were more likely to visit retailers that offered a loyalty program.

“While the concept of loyalty is nothing new, we are seeing a significant surge in retailers—and particularly those in developing economies—investing in loyalty programs that give them valuable insight into how to better meet customer needs,” said Julie Currie, senior vice president, Global Loyalty, Nielsen. “Savvy retailers are mining the data and looking for new and innovative ways to achieve the benefits most important to their customers.”

According to Nielsen’s survey, three-quarters (75%) of global respondents said that discounted or free products was the most valuable loyalty program benefit. Enhanced customer service and free shipping incentives were important to 44 percent and 42 percent of global respondents, respectively. Good customer service was important to more than half of respondents in Latin America (59%) and Asia-Pacific (53%). Exclusive deals (41%) and special shopping hours (36%) mattered most among loyalty program participants in Asia-Pacific. Free shipping incentives were important for 46 percent of North Americans.

“In markets where loyalty programs are long established, customers tend to be savvy about copy-cat promotional offerings that don’t offer unique advantages,” said Currie. “Particularly in developed loyalty markets, retailers and manufacturers need to work together to offer exclusive awards that cut through the clutter. New and innovative concepts, especially in the online space, that connect with how consumers want to shop are proving to be most effective.”

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