A third of consumers can’t ID what loyalty tier they belong to: study

Three-quarters of Canadians also say it's acceptable for businesses to give preferred treatment to high-spending customers, according to new Colloquy research.
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Think you’re winning favours with your customers by placing them in preferred loyalty “tiers?” Think again. A new study from Colloquy, the research arm of Loyalty One, found that a third of U.S. and Canadian consumers can’t identify what tier they belong to with their favourite loyalty programs. Non-travel-related program members are almost twice as likely as those in travel rewards program to be unsure of their tier levels.

Though tiered loyalty programs – that is programs that offer better rewards for different spending habits, such as buying more items with bonus points or miles, or only shopping at certain stores to maximize point collection – are designed to encourage better engagement with frequent shoppers, the study found that many consumers were confused about the tiers and rewards in the first place, causing them to feel disengaged from the process.

What’s more, these may be linked to the widening economic gap, the study found: consumers making less than $50,000 were 50% less likely than those making $100,000 a year to make it to the top tier of a program. Four out of 10 consumers never make it out of the basic tiered level. Roughly one-third of people in lower tiers feel they are not properly acknowledged for their participation in a program.

That being said, consumers may not care too much about the gap. Three quarters said it was acceptable for businesses to give special treatment to customers who spend more money, while 69% said it’s fair for customers to buy their way into a higher tier to reap the benefits.

Interestingly, only 50% of respondents said they have increased their spending or changed their purchase behaviour to achieve a higher reward status.

The study also found that those who are in higher tiers tend to seek more personalized services and products, with 82% identifying this as the reason for seeking a higher tier.

LoyaltyOne operates Air Miles rewards, a direct competitor to Aeroplan, which recently launched a tiered program for its card-holder members, though Colloquy is an independent research division of the program.

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