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Insight of the Day: Discounts are the leading reason consumers sign up for loyalty programs

The article highlights the following key points regarding consumers and loyalty programs:

- Leading Reason for Participation: Discounts emerge as the primary motivator for consumers to sign up for loyalty programs. A significant percentage of US adults, around 48%, cite discounts as the top reason for their participation, based on data from Merkle in October 2023.

- Impact of Rising Prices: With increasing costs, consumers are turning to loyalty programs as a means to access discounts and savings. This trend underscores the importance of discounts in attracting and retaining customers within loyalty programs.

- Evolution of Consumer Preferences: Consumer preferences within loyalty programs are evolving. While discounts remain popular, the desire for free products and exclusive rewards has seen a decline from 2022 to 2023, indicating a shift in what consumers value from loyalty programs.

- Challenges and Dislikes: Consumers express dissatisfaction with loyalty programs when rewards take too long to earn or are overly complex. According to the Merkle survey, the top two features disliked by US adults are rewards that are challenging to obtain.

- Engagement Strategies: To keep consumers engaged in loyalty programs, brands must offer a balanced mix of rewards and perks that align with consumer preferences. Additionally, providing a user-friendly platform that simplifies the process of earning and redeeming rewards is crucial for enhancing consumer experience and loyalty program engagement.

Overall, the article emphasizes the significance of discounts in driving consumer participation in loyalty programs and underscores the importance of adapting loyalty program offerings to meet evolving consumer preferences and expectations.


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