Psssst: Your Loyalty Program Customers Aren’t More Loyal

More importantly, does it matter?

According to McKinsey’s study of 55 major corporations, those with the highest focus on loyalty had the lowest increase in revenue.

Metacom reports that 82% of people who join an apparel loyalty program spend the same or less after joining the program, and 87% of shoppers say they’d pick the same retailers if the program never existed.

Babs Ryan explains: ‘In cumulative programs, the majority of people who join are the ones who already shopped often enough to get the rewards, so they already spent three times more before they signed up. The difference is that now we’re giving the most frequent shoppers additional discount rewards on stuff they would have bought anyway. Just 22% of shoppers are responsible for 83% of all coupon redemptions.

Re-examine your competitive research. Your top-spending loyalty customers are most likely to be top spenders at your competitors, and in their loyalty programs, too. Big spenders bust the 29 programs per household average. The bottom line is: Top loyalty program spenders are actually least loyal.’

To read the full article click here.

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