Most loyalty programmes ‘failing consumers’
Dubai, December 30, 2013
Most consumers in the UAE and Saudi Arabia feel customised rewards would win their loyalty, but many brand loyalty programmes are failing to deliver on the things that matter most to customers, a report said.
‘Loyalty Chasm’, the gap between what is important to customers in driving their loyalty and what brands are delivering is identified in the report ‘Driving greater loyalty in the Middle East’ published by global loyalty agency ICLP.
The new research commissioned by ICLP surveyed 600 consumers in the UAE and the Kingdom of Saudi Arabia, with illuminating results.
Loyalty programmes remain a powerful way to win business and improve bottom-line results. 63 per cent of UAE and 61 per cent of KSA consumers choose to buy from brands with loyalty programmes, and 55 per cent of UAE and 60 per cent of Saudi Arabian consumers tend to buy more from brands they are loyal to.
The largest gaps between customer expectation and brand delivery where in the areas of personalisation and relevance. Both regions identified customised, relevant incentives and communications as important to securing loyalty.
In the UAE, 66 per cent of consumers felt customised rewards would win their loyalty, while only 44 per cent of brands delivered this, leaving a sizable chasm of 33 per cent. Meanwhile, Saudi Arabian consumers rated customisation as 62 per cent important, with 45 per cent delivery and a 17 per cent chasm.
ICLP’s report shows that, in a harsh economic environment, customers demand more than ever in return for their loyalty. In particular, customers expect more instant, flexible, and customizable rewards, available through modern mobile technology.
In addition, customers expect instant rewards. In the UAE, 74 per cent of respondents felt instant rewards were important, while only 54 per cent of brands delivered, leaving a chasm of 20 per cent. In Saudi Arabia, 72 per cent of consumers wanted instant rewards, but delivery of 57 per cent left a chasm of 15 per cent.
Contrastingly, the smallest gap was found in the delivery of social media loyalty elements. While many brands perceive social media as very important in engaging with customers, only 20 per cent of consumers had connected with brands they are loyal to on social media. In addition, the gap between perceived social media importance and brand delivery was just 6 per cent.
The findings of the report suggest that, while social media is not to be ignored, the most effective improvements to a Middle East loyalty programme are found in making incentives and communications more relevant, personalised, and tailored.
Dion Maritz, general manager at ICLP said: “This valuable research proves the effectiveness of a loyalty programme, but sheds new light on what consumers expect for their loyalty. More than anything else, consumers expect loyalty programmes that are localised to the Middle East, and offer tailored communications and rewards. We have seen an ongoing trend in better customer segmentation, and that is where we will get the biggest results in loyalty.” – TradeArabia News Service