Executive Summary: rDialogue Brand Loyalty Study

In November 2017, we released the first wave of our proprietary research on Loyalty 3.0, “Changing Consumer Expectations” which revealed how the changing dynamic between brands and customers is impacting brand loyalty. Our latest rDialogue research continues to validate the concept of “Loyalty 3.0” as well as the continuing effect of Amazon, which we call “Amazonification”. This recent study, fielded in late early Q2 2018, shows that leading brands are taking a cue from Amazon and beginning to broaden their value propositions beyond the traditional transactional offerings, like free product, discounts, and rewards.

Given that there are now 100 million Prime members in the United States, this reinforces the requisite for brands to continually improve the customer experiences they deliver, as Amazon continues to do.  Prime members still have significantly higher expectations – three times in fact – than non-Prime members when it comes to brands delivering relevance, including recognizing them and delivering a more personalized experience. In essence, Prime members have been trained (primed) by Amazon to expect more from other brands. 

While consumers still view and express loyalty in transactional terms, they increasingly place value on the experience, especially time and convenience, which they actually value more than earning loyalty points, benefits and recognition.

In this recent wave of research, we also delved into the retail and hospitality verticals. The findings highlight the overly promotional and transactional nature of retail versus the experiential opportunities within travel and hospitality.  travel loyalty is influenced significantly more by non-transactional drivers – recognition, time, access and information – than retail. This is not surprising when considering how promotional retail in general has become, in contrast to the loyalty heritage in travel. It is our belief that, over time, retail will continue to evolve to be more experiential.

Recently, we’ve been discussing time as a loyalty currency. For consumers, brands that save them time will receive loyalty in return for the respect the brand demonstrates towards them. Time, in our opinion, can be saved by brands in three primary ways: actual time savings, convenience, and frictionless experiences. Brands like Amazon have laid the groundwork for how a consumer’s time can be valued, whether it be through something as simple as two-day shipping, or as nuanced as Dash Buttons. Our research found that over half of all Prime members consider time-saving as extremely valuable for loyalty. Amazon is able to use its extensive customer data to provide relevance, as well as convenience, thus saving customers even more time by not wasting it.

Last, and importantly not least, the study validated the challenges and opportunities of customer data, which is key to delivering on the Loyalty 3.0 drivers: consumers are happy to share data when used for relevance, but this opportunity is mitigated by an erosion of brand trust if data security and relevance are not prioritized.

In the coming months, we will be sharing more from this wave of research, so stay tuned to learn more.

For now, here are some highlights:

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Regarding Transactional vs. Experiential Loyalty:

  • 67% of travel loyalty members and 70% of retail loyalty members want access to member-only experiences
  • 60% of travel loyalty members and 66% of retail loyalty members want to be able to save their points and use them on future purchases or travel
  • 67% of retail loyalty members want classes, videos and other content to learn about the products they buy and 70% of travel loyalty members want content about travel amenities and destination

Regarding Time:

  • 83% of consumers say it’s very/extremely important that a brand makes their experience more convenient
  • 77% of travel loyalty program members say it’s extremely important for brands to save their time / make it easy to purchase, while only 54% of retail loyalty program members say the same
  • 56% of consumers say it’s very/extremely important that a brand uses technology to make the experience seamless
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Regarding Trust:

  • Only 41% of retail loyalty members are willing to share information about themselves in exchange for relevant discounts and offers
  • 43% of retail loyalty members are uncomfortable when brands use their information to market to them
  • Only 36% of retail loyalty members like it when brands send them recommendations based on their previous purchases, down from 40% in 2017

For more details on the research study, please contact rDialogue.

If you'd like a PDF of this research summary and the results discussed within, please click here.