A new report finds that a majority of U.S. consumers are not satisfied with the reward choices offered by their loyalty programs, and that rewards that offer a more experiential component are essential to shifting this attitude. According to the report from loyalty firm COLLOQUY and ticket-selling platform FanXchange, 54 percent of loyalty program members report feeling a lack of satisfaction with their program. Additionally, 48 percent of respondents said they encountered frustration when attempting to redeem their awards.
This matches the current trend seen in the corporate incentive market to include more experiential rewards in both individual and group travel programs and points-based rewards programs that are increasingly including individual incentive travel offerings in addition to merchandise and gift cards. And even merchandise suppliers have been getting in on the experiential trend, as described in Incentive
's May/June cover story.
The COLLOQUY study, titled "Live it Up: Using Experiential Rewards to Re-ignite Member Engagement," draws on the responses of 1,003 consumers. The study's authors spotlight the fact that 93 percent of respondents rate "types of rewards offered" as very important or somewhat important in the effectiveness of the loyalty program -- a point that the authors believe shows the importance of "speaking to the needs and aspirations of people in every demographic" through the experience and enjoyment of live events.
While 44 percent of respondents cited airline tickets as the most appealing experiential reward, 56 percent pointed to tickets to live events, such as concerts, sports, and theater.
"For marketers, experiential rewards offer the ability to create offerings that can continually be changed and updated," write the report's authors, COLLOQUY Research Director Jeff Berry, and FanXchange President and Chief Operating Officer Morley Ivers. "As the recession subsides, consumers are spending more disposable income on enhanced experiences like exclusive access and great seats."
They point to Starwood Hotels & Resorts' Starwood Preferred Guest program, which recently allied with Broadway theater rewards program Audience Rewards, allowing not only for upgraded seating, but backstage experiences and private after parties.
The report offers five best practices for designing experiential loyalty programs:
• One size doesn't fit all - Make it relevant
• Don't start with "Dear Valued Member" - Make a great first impression
• "Who did that come from?" - Set the brand apart from competitors
• Post it, Tweet it, recognize it - Help facilitate a buzz
• Fail often and early - Test and measure
To view the entire report, head here