The Problem With Loyalty Programs

Consumers like loyalty programs, but they have complaints. A major one is the hassle of accessing rewards.

In a February 2018 survey from mobile coupon solution provider CodeBroker, some 54% of US loyalty program members said it’s frustrating when programs can’t be easily accessed on smartphones or when an app download is required.

More than five in 10 respondents agreed that without easily accessible programs, rewards often go unused or expire because members aren’t aware they’ve accrued.

Of those polled, 37% prefer accessing loyalty program information, such as balance or redemption details, via a periodic text message. Some 28% rely on a mobile app.

While many loyalty programs incorporate an app, many respondents had an aversion to accessing reward details in this way. Most respondents said they’re unwilling to give up smartphone storage for an app, even if rewards are an incentive.

This sentiment was underscored by preferred communication methods as well. Only 15% of those polled favor loyalty program alerts, such as expiring rewards, through an app. Instead, members prefer email (42%) and text message (32%) notifications.

"Loyalty program leaders have recognized that they need to make their programs easily accessible via mobile in order to meet the requirements of the majority of today’s consumers," said Dan Slavin, CEO and co-founder of CodeBroker. 

The survey signals that brands have to support multiple mobile channels, he said.  "Different consumers prefer different mobile channels. For example mobile apps are preferred by only about 30% of consumers." 

Apps retain a strong appeal for many retailers because of the promise of deep, long-term engagement with shoppers. More than half of the retailers surveyed by RetailMeNot in February said they plan to make exclusive offers to mobile app users this year.