The Marketing Edge

The Loyalty Barometer Report

Report analyzes the impacts of COVID-19 and social disruption on consumer behaviors

A special report from Merkle, a data and technology marketing company, looks at the importance of loyalty in marketing post-COVID. Access the full report here.

September 01, 2020 — COLUMBIA, Md.–(BUSINESS WIRE)–Merkle, a leading technology-enabled, data-driven performance marketing company, has released a special edition of its annual Loyalty Barometer Report. The updated 2020 Loyalty Barometer Report reveals the importance of loyalty as businesses re-emerge from the pandemic and features updated research and comparisons to the March 2020 report, including how consumer expectations around loyalty and rewards programs have been impacted by the events of 2020. Merkle surveyed over 1,800 US residents aged 18 to 65 in July 2020 for the report.

Because of 2020’s economic and societal turmoil, the benefits of loyalty marketing programs are now in higher demand by consumers. Insights from the report reveal important changes to consumer behavior and preferences, as a result of the unprecedented economy. The pandemic has also intensified fundamental human values, which vary widely across generations. For instance, boomers favor stability and security, while millennials and Gen Z crave excitement and a sense of achievement. Findings within the report reflect these preferences by revealing shifts in the types of features consumers want to experience in loyalty programs.

“COVID-19 has led us to a pandemic economy impacting everyone in different ways. Loyalty marketing is the only sustained brand marketing program that helps maintain valuable relationships with consumers over time, while being directly linked to increasing shareholder value. Due to the changes we’ve faced this year, brands have experienced database churn, category switching by consumers, and a massive surge in eCommerce,” said Chris Wayman, executive vice president and general manager, Promotion and Loyalty Solutions at Merkle. “Gen-Z, millennials, Gen X, and boomers continue to favor loyalty marketing. Brands must differentiate themselves by creating an emotional connection and building trust, which can only be achieved by tailoring strategies to ensure that individual consumer needs are met.”

Excerpts from the Loyalty Barometer Report

It’s clear that COVID-19 has amplified consumer concerns about safety from both a health and financial perspective. In addition, heightened awareness around racial injustice has many consumers feeling the need to do something to help, including self-education, participating in demonstrations, and being more selective when choosing the brands with which they want to associate and where to spend their dollars.

But even with these dramatic and overarching changes in consumers’ lives, our primary Loyalty Barometer insights remain the same. What has shifted is how consumers want brands to put these important expectations into
practice. Each individual has been impacted by 2020 in different ways and, despite the significance of these impacts, the enduring “secret” to driving loyalty remains: create an emotional connection and build trust—which
can only be done by tailoring marketing strategies to ensure that individual consumer need-states are met.

Deliver Clear & Consistent Savings

COVID-19 has led us to a pandemic economy impacting everyone in different ways. Loyalty marketing is the only sustained brand marketing program that helps maintain valuable relationships with consumers over time, while being directly linked to increasing shareholder value...

Consumers are looking for more ways to obtain clear and consistent savings within the preferred loyalty structure of earning points to redeem for rewards. While discounts, free samples, and offers continue to be the main drivers of loyalty program participation, consumer perspectives on preferred ways to earn have shifted slightly as a direct result of COVID-19.

Earning points to spend on rewards continues to be the most appealing, but consumers currently have an increased desire for a program structure that provides clear financial savings (Get $10 reward when you spend $100) and consistent discounts (Get a new reward every Monday). This is likely due to the financial hardships that have come with increased unemployment and uncertainty around the economic future that has occurred throughout the pandemic.

Consumers have a heightened sensitivity to the value they receive for their purchases and are looking to uncover more ways to save. Ensure your loyalty program is clear and transparent on what customers need to do to obtain their rewards, and be very clear about the value of the rewards available.

Sense Of Control

Some interesting shifts have occurred in the types of features consumers want to see included in their loyalty programs. What is notable is the decreasing importance of VIP tiers and donations, while the following interests are all on the rise: tracking milestones, participating in challenges, earning badges, and accessing leaderboards.

Previous interest in VIP tiers was mostly around travel and credit card verticals, so the decline in consumer interest of these benefits clearly indicates consumer routines have been disrupted by COVID-19 during state orders. This is not surprising considering the restrictions on travel and increased financial sensitivity directly related to COVID-19.

The elevated interest in milestone tracking and badges could be tied to the satisfaction that comes with having a sense of control and achievement in a time that can feel very out of control. And finally, the increased interest in challenges and leaderboards is likely due to the need for socialization and a sense of
community in a time of social distancing and, for some, isolation.

 

 

 

Merkle will be hosting a complimentary webinar that showcases some of the report’s updated research on Tuesday, September 22 at 2 p.m. ET. To learn more visit here.
About Merkle
Merkle is a leading data-driven, technology-enabled, global performance marketing company that specializes in the delivery of unique, personalized customer experiences across platforms and devices. For more than 30 years, Fortune 1000 companies and leading nonprofit organizations have partnered with Merkle to maximize the value of their customer portfolios. The agency’s heritage in data, technology, and analytics forms the foundation for its unmatched skills in understanding consumer insights that drive people-based marketing strategies. Its combined strengths in performance media, customer experience, customer relationship management, loyalty, and enterprise marketing technology drive improved marketing results and competitive advantage. With 9,600+ employees, Merkle is headquartered in Columbia, Maryland, with 50+ additional offices throughout the US, EMEA, and APAC. In 2016, the agency joined the Dentsu Aegis Network.