30 July 2009

Consumers saying no to loyalty programs

Travel industry loyalty marketing and rewards programs have declined by almost one third in active participation since 2007, according to COLLOQUY survey research on US consumer attitudes and perceptions in the recession economy.
 

"Translated, the 31.2 percent drop means the general population actively participated in 1.5 Travel-related loyalty programs in 2009 compared to 2.18 programs in 2007, when COLLOQUY last completed similar cross-demographic research on loyalty marketing perceptions in the travel, financial services and retail industries," the company said.

Overall, consumer participation in rewards programs in the US market has jumped 19 percent since 2007, COLLOQUY’s research shows.
 

"The latest travel-specific results indicate that customers are consolidating their spend with fewer hotels and fewer airlines as the travel-whenever-you-want-for-business bubble has burst, and Road Warriors no longer are able to earn elite status in multiple programs," the company said..
 

"These numbers shouldn’t be daunting to travel loyalty industry pioneers who launched programs in the early 1980s in another acute recession," said COLLOQUY Partner Kelly Hlavinka. "One preferred hotel and one preferred airline, that’s how loyalty programs were supposed to work all along. Savvy travel marketers will see the opportunity to lock consolidating Road Warriors into their particular program, knowing they’ll emerge in a much stronger competitive position when travel ramps up again."
 

Another key finding from the COLLOQUY research attests to the importance consumers attach to loyalty programs, despite challenges presented by the worst recession in the post-World War II era.
 

Almost one-third of consumers said the recession has made their participation in Retail rewards programs more important.
 

by David Wilkening
 

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• Too Many Loyalty Programs
  
  

  The reason consumers may say no to loyalty programs is because there are too many ! and with strings attached. The consumers are looking for an instant reward, preferably Cash, rather than collecting points.

  By Vinit Mody, Tuesday, August 4, 2009