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Deloitte: Evolving trends in brand loyalty and consumer behavior

Keep it simple for me: I prefer a loyalty program that can simply communicate the rich value it provides

Year over year, consumers continue to prioritize the “ability to earn and redeem financial rewards” and “simplicity and ease” as the two most important attributes of a loyalty program. To maximize brand loyalty and optimize consumer behavior, programs should continue to clearly articulate the holistic value they provide and provide cohesive, seamless experiences throughout the consumer journey. For many, this requires brands to optimize for member needs across all owned and partner touchpoints where the loyalty value proposition is delivered and where key program features are present.

Provide meaningful experiences for my personal data: I want brands to provide more personalized and elevated experiences driven by the personal information I choose to share

The survey results found that just over half of consumers believe that loyalty programs offer sufficient personalization and that the willingness to share personal information is rising. Fifty-three percent of consumers said they are willing to share their personal information, up markedly from 2021. Brands can continue to harness the power of consumer data to tailor experiences that make an outsized impact for members, such as proactively predicting the type of support a member may need when they reach out to customer service or recommending desirable benefits the member hasn’t yet experienced with loyalty partners.

The report details the factors that would most increase their willingness to share personal information:

1. An ability to opt in and out of what information of mine is collected and shared
2. Transparency around how my personal information is being used
3. Trust in the brand’s data security standards and practices
4. Transparency around what information is collected on me
5. A clear value proposition for what I am receiving in exchange for my personal information

Extend my benefits through a well-integrated credit card: I expect credit cards affiliated with programs to offer exclusive benefits that are seamlessly embedded into the program model and experience

More than 55% of consumers are actively seeking credit cards that accelerate their program benefits and rewards, an increase of 12% from 2021 in the latest loyalty survey results.  Deloitte see this shift indexing towards more experiential industries (e.g., hospitality, specialty apparel) over those that are traditionally more transactional (e.g., grocery, convenience), a trend Deloitte expect to continue.

For industries with greater interest, programs need to communicate the value of being a cardholder by demonstrating the enhanced experiences and exclusivity that comes only with the credit card. Exclusive benefits should be well integrated within the wider loyalty program and clearly linked to card membership while remaining distinct from other loyalty perks. Several examples include an annual companion pass for flights, exclusive discounts on apparel, and early VIP access to concerts and shows.

Let me opt in for exclusivity: Programs that offer a paid membership option provide an additional avenue for me to receive exclusive, highly sought-after benefits and rewards

When it comes to brand loyalty and consumer behavior, there is sufficient demand for paid loyalty programs. More than 60% percent of consumers state they are willing to pay a membership fee in exchange for exclusive benefits and an elevated experience. Of the consumers who pay loyalty membership fees, almost half pay for two or three loyalty programs.

In order to entice consumers to pay an annual fee, the additional benefits must be substantially differentiated from the general loyalty program or branded credit card perks. The research shows that consumers, across all industries, are most willing to pay for financial benefits such as exclusive discounts, promotions, and special pricing. In travel-based industries, such as airlines and hotels, increased flexibility (e.g., no cancellation fees) and enhanced services (e.g., upgrades) are understood to be as important as value-added benefits.

Consumers said they are most willing to share personal information in exchange for:

1. Discounts, promotions, and special prices
2. Free products and gifts
3. Upgraded or enhanced services
4. Special merchandise or products
5. Increased flexibility

Help me support mission-driven causes: The way a brand interacts with its community socially and/or politically impacts my satisfaction and overall perception of a brand

The loyalty program survey indicates that the social and community attributes of loyalty programs are becoming increasingly important for consumers as we transition to a post-pandemic norm. While the ability to refer a new member for benefits or rewards remains the most important community-related attribute to consumers, the second most important factor for consumers is the opportunity to participate in or support causes through a loyalty program. Incorporating mission-driven causes into loyalty programs can be more than just offering a charitable points donation program. Leaders in this space are implementing more tangible programs such as incentivizing recycling and upcycling by offering loyalty points or a discount for used materials. The mission-driven work of loyalty programs is a nascent driver that should be watched over the next few years to see if and how more brands fold social good into their mainstream consumer loyalty strategy.