Consumers want to redeem well before they hit $100 in rewards; most prefer reward cards over other reward options, especially younger generations
PLEASANTON, Calif., Jan. 22, 2019 /PRNewswire/ -- According to recent research*, loyalty program members surveyed want more accessible redemption opportunities and prefer to redeem their points at least once a year. Furthermore, they want to redeem well before they hit the $100 mark in reward earnings and prefer a reward card over any other reward option, especially younger generations. These are among the findings of the latest research commissioned by global financial technology company, Blackhawk Network.
The research findings were published in an ebook, "A Heart-to-Heart About Increasing Loyalty" and were based on a survey of more than 1,500 American adults on their preferences and attitudes toward loyalty programs across a range of categories, including retail, airline, hotel, food & beverage, online retail, bank, gym, telecom and utility.
Other key findings of the research include:
The average consumer belongs to six loyalty programs, but is only active in four: Most consumers surveyed (87 percent) belong to at least one loyalty program with respondents estimating that they belonged to 6.2 loyalty programs, on average. However, respondents report that of the loyalty programs they participate in, they are only active in 3.9, on average.
Consumers want more redemption opportunities: Loyalty members in food & beverage, online retail, gym and retail programs report the highest engagement; roughly nine out of ten surveyed loyalty members in each category report redeeming their loyalty points at least once a year. Additionally, a majority of surveyed loyalty members in those categories consider themselves frequent redeemers, cashing in their loyalty points four or more times throughout the year. When examining when loyalty members redeem their points, only surveyed members of an airline and/or hotel chain loyalty program usually wait until they have at least one hundred dollars in rewards to redeem their points. For members of the other surveyed categories, most members would rather redeem well before that threshold—especially members of online retail (85 percent), utility (76 percent), phone (75 percent) and bank (68 percent) programs.
The digital divide in reward preference: Overall, loyalty program participants prefer reward cards over other reward options with more than half of surveyed consumers in most categories studied opting for a prepaid or gift card. Reward cards are most popular for online retailers (70 percent), phone companies (65 percent), utility companies (61 percent), retailers (56 percent) and banks (56 percent). However, when examining whether consumers prefer physical or digital rewards, participants were generally divided. The research shows there is a desire for both physical and digital rewards, and gift and prepaid cards.
"Effective loyalty programs keep participants engaged and continuously coming back for more. Our research found that participants in programs with the highest engagement are redeeming their loyalty points at least once a year, and in some categories, the majority of consumers are redeeming at least four times a year," said Theresa McEndree, vice president of marketing, Blackhawk Network. "Combined with the fact that most consumers want to redeem their rewards well before the $100 mark, our findings suggest that retailers and organizations can increase consumer engagement with their loyalty program by simply offering the right rewards at the right values."
To download the complete "A Heart-to-Heart About Increasing Loyalty" ebook, click here.
*About Consumer Loyalty Verticals Research
The consumer loyalty verticals research was an online survey conducted independently by Leger on behalf of Blackhawk Network between February 5 and February 15, 2018. The sample size included 1,500 American respondents ages 18+. A probability sample of the same size would yield a margin of error of +/-2.5%, 19 times out of 20.
About Blackhawk Network
Blackhawk Network Holdings, Inc. is a global financial technology company and a leader in connecting brands and people through branded value solutions. Blackhawk platforms and solutions enable the management of stored value products, promotions and rewards programs in retail, ecommerce, financial services and mobile wallets. Blackhawk's Hawk Commerce division offers technology solutions to businesses and direct to consumers. The Hawk Incentives division offers enterprise, SMB and reseller partners an array of platforms and branded value products to incent and reward consumers, employees and sales channels. Headquartered in Pleasanton, Calif., Blackhawk operates in 26 countries.