Loyalty programs struggling to stay relevant

A survey by Bond also shows what helps retention during a pandemic and which stores consumers are comfortable returning to.

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The latest survey by Bond Brand Loyalty finds that loyalty programs are failing to adequately help communities or offer relevant rewards, as the amount of people spending less over the next three months begins to level off.

Bond’s latest wave of research surveyed approximately 1,500 Canadians respondents, finding that 58% of people plan on cutting spending over the next three months, up from the 55% who said the same on March 20 and 42% who said the same on March 16.

Bond said in its report that the numbers “appear to be flattening to a steady-state decline through the crisis,” while also reporting that there are signs of positivity bubbling to the surface. For example, compared with its first wave of pandemic research in March 16, 7% more people agree that they plan to spend more online in the next three months.

However, Bond warns, loyalty and credit card reward programs have failed to respond satisfactorily in times of crisis. Only 15% of members are very satisfied with loyalty or credit card reward programs’ response to COVID-19, down from 26% who said the same in March.

With it comes to sending relevant communications, benefits, staying connected and helping local communities, both credit card and loyalty programs perform poorly.

According to Bond, 28% of active loyalty members agree brands are offering relevant benefits, compared with 23% of credit card rewards members who said the same. And only 25% of active loyalty plan members and 19% of credit card reward program members feel that brands are helping local communities.

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According to Bond’s chief strategy officer Sean Claessen, the economy is going to emerge somewhere between a recession and a depression, and that customer retention will be a necessity. While 44% of respondents said saving money was more important for ensuring their brand loyalty during the pandemic, customer service (34%), helping them feel secure (34%), saving time (32%) and surprise perks and benefits (23%) also ranked high on the list.

As most provinces prepare to allow retailers to reopen in the coming days – if they have not already ­– Bond reports that consumers have different comfort levels in doing so, depending on the category. While 47% of respondents would be comfortable returning to a bank this month, 37% are comfortable returning to a specialty retailer and 32% to an automotive dealership. Even lower on the list were gyms (13%), flights (12%), taxis and rideshares (12%) and AirBnBs (9%).