Call to rethink loyalty schemes as an estimated 10 million consumers have unused points
26 July 2017
- Survey of 2,000 UK consumers finds 22% of respondents have unused loyalty points
- According to new research by Deloitte a quarter of UK consumers are apathetic to traditional loyalty schemes;
- Technological advancement to aid move towards ‘smart loyalty’.
More than a fifth (22%) of UK consumers - 10.3 million people - have unused loyalty points, according to new research from Deloitte. The latest Deloitte Consumer Review: Customer loyalty: A relationship, not just a scheme which is published today, highlights the need to rethink traditional loyalty schemes.
The report includes findings from a survey of more than 2,000 UK adults which reveals that one in four consumers (26%) are regular users of brand loyalty schemes, using them at least once a week. However, almost half of consumers (41%) use such schemes once a month or less, with 14% of respondents ‘never’ using them.
Ben Perkins, Head of Consumer Business Research at Deloitte comments: “Traditional loyalty schemes need a rethink not only because of changing consumer expectations but also because they have become expensive to run and difficult to unwind.
“They still have some appeal, one in five of consumers would stop shopping with a brand if they were to end their loyalty scheme. However, for the majority of customers these schemes are too generic and loyalty should be about more than collecting points.”
While the majority of respondents (54%) claim they like points-based loyalty schemes, only half of consumers (47%) always redeem all of their points. 18 to 24 year olds are even less likely to redeem points (40%) despite a higher percentage than average enjoying a points-based loyalty scheme (60%). This might reflect the fact that the most popular loyalty schemes were designed for previous generations and now need to reflect consumers’ growing appetite for personalisation and experience.
Furthermore, brand loyalty is driven more by customer service (41% of respondents), convenience (36%) and the overall shopping experience (27%) than having a traditional loyalty scheme (26%). Deloitte’s research also found that personalisation and relevance are high on the list of what consumers expect from a loyalty scheme. One in three consumers (32%) want a loyalty scheme that “better reflects my lifestyle, such as offering ‘freebies.’”
Perkins adds: “Consumers want to be recognised and rewarded as individuals, not as faceless points collectors. A decade on from the introduction of the first smartphone, today’s savvy consumer also expects brands to be more relevant in the way they communicate and engage with them.
“Retailers and consumer businesses should consider smartphone apps, coupon scanning, data profiling tools and connected stores. These may help evolve a traditional loyalty scheme into a custom-built ‘smart’ loyalty programme that engages consumers at a personal level.”
Notes to editors
About the research
To better understand customer loyalty, Deloitte commissioned an online consumer survey carried out by an independent market research agency. The survey was conducted with a UK nationally representative sample of 2,164 adults aged 18 and over between 16 June and 19 June 2017.
In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see deloitte.com/about for a detailed description of the legal structure of DTTL and its member firms.
Deloitte LLP is a subsidiary of Deloitte NWE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.
The information contained in this press release is correct at the time of going to press.
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