Loyalty Programs Cut Across All Businesses: DMA Report

A recent survey from the Direct Marketing Association and Colloquy indicates the majority of people in various industries maintain some form of loyalty programs.

The report, “Loyalty Programs: A Cross-Industry Analysis of Usage and Effectiveness,”
covers aspects of loyalty programs in five industry segments, including supermarket and grocery stores; hotels and restaurants; retail and department stores; banks and credit cards and catalog companies.

According to the report, 73.7% of supermarket and grocery store respondents use face-to-face interactions to invite customers into their loyalty programs, whereas almost 80% of retail and department store respondents use face-to-face interactions to draw their customers into their loyalty offerings.

Nearly 65% of hotel and restaurant respondents have a loyalty program in place to reward customers with their own products and services, the report found. For there part, proprietary loyalty programs, which reward customers with a company’s own products, were the most popular among 64.3% of respondents who had a loyalty program, followed by partner programs, with rewards from third parties, favored by 18.4%.

When it comes to pricing loyalty programs, seven out of 10 respondents indicated their programs featured free enrollments. More than 15% reported maintaining tiered fee structures and rewards programs.

The report also found the following:

• More than half (57.8%) offer special pricing and discounts as their rewards, followed by gift certificates (38.5%).
• Respondents claimed that on average 47.4% of their entire database is enrolled in a loyalty program, and 57.9% of those enrolled are considered active participants.
• Respondents in the retail and department store business cite maintaining active customers (86.2%) as the primary reason for their loyalty programs followed by tracking customers’ behavior (81%).
• Maintaining active customers was the overwhelming reason for running loyalty programs among bank and credit card respondents (91.2%).
• Nearly half (48.6%) of bank and credit card companies have partner programs.

The survey was conducted in June by e-mail based on 250 respondents from the DMA’s in-house list and a targeted audience of Colloquy subscribers. The 157-page report is available for download at www.the-dma.org.

More coverage on research