Marketers, You’re Thinking About Loyalty Programs All Wrong, And Other Consumer Disconnects [Study]

It’s a common refrain that consumers are moving faster and changing habits more quickly than marketers can keep pace with. We’ve seen it happening in mobile and a new study underscores how businsses are missing out on key connections throughout the so-called “customer journey”. With devices at our fingertips, we want and seek out information in the moment. When companies aren’t there to meet us, well, we quickly move on to the companies that will.

In this study, a survey of 600 digitally savvy consumers and marketers commissioned by Kitewheel, a real-time marketing hub for agencies, 80 percent of consumers said they will search the web, conduct product research, read reviews and compare prices between different retailers at least 75 percent of the time before purchasing.

The fact that the customer journey involves many more touchpoints now isn’t news, but it’s worth repeating because this change is fundamental to how marketers adapt user experiences across all channels.

The survey asked marketers and consumers about brand loyalty programs and the differences are startling. Companies expecting to sit back and rely on their loyalty programs need to take a hard look at how their programs connect with key customers.

Nearly three-quarters of consumers (73 percent) said that loyalty programs should be for brands to show appreciation for their loyal customers. And yet, two-thirds (66 percent) of marketers see it the other way around: loyalty programs are for consumers to show their commitment to their businesses.  “Businesses must revise their strategy and prove to consumers that loyalty goes both ways,” the report’s authors point out.

And marketers that think their brand loyalty programs are going to keep their customers truly loyal online should take stock. The research shows that nearly half (47 percent) of consumers said that although they may have a company preference, if they can’t find what they’re looking for on that site quickly, they’ll go elsewhere. A quarter of consumers said they feel companies only care about the sale and rather than establishing long-term customer relationships through their loyalty programs.

With 66 percent email opens happening on mobile devices, email has entered the real-time marketing chain.  Yet, even when companies have cross-channel marketing capabilities in place, they often don’t get the timing right and miss out on key opportunities.

For example, half of consumers said they have regularly received open cart email notifications after they’d already completed a purchase elsewhere.

Similar to the complaints about loyalty programs being used by companies to get the sale rather than develop customer relationships, consumers also have gripes about email marketing practices. Interestingly, businesses seem to know their is a problem but can’t seem to change bad habits.

While 58 percent of the marketing executives polled acknowledged that customers don’t want to be sold, companies continue to pummel consumers with untargeted, untimely offers. Many businesses know this is a problem. Over a quarter (28 percent) of companies said they believe the reason consumers most often unsubscribe is because they’re sending too many emails and irrelevant offers. Consumers agree: just 10 percent said the majority of promotional marketing they receive is relevant to their purchase interest.

“Brands face tremendous challenges — and opportunities — to adapt their strategies to better meet the demands of today’s connected consumer, while truly differentiating themselves,” said Mark Smith, President, Kitewheel. “Yet transformation across one category or touch point will not suffice in the long run — individual customer journeys that span all touch points, channels and strategies must lie at the heart of this evolution.”

The full “State of the Customer Journey 2014 Report” is available for download here.