Are Your Loyalty Program Members Save-for-Laters or Earn-and-Burners?
Every consumer who joins a loyalty program is unique, but certain groups of consumers share common behaviors around the rewards they earn from their favorite retailers and brands.
There are two groups of loyalty program members: "save-for-later" consumers who like to accumulate rewards for longer-term payoffs, and "earn-and-burn" consumers who favor frequent redemption opportunities and immediate gratification.
As they focus their sights on generating more revenues, attracting more foot traffic and encouraging more spending, loyalty program managers and retailers can craft promotions that cater uniquely to each group — e.g., offers that help save-for-laters to accrue valuable rewards over time, and promotions that encourage regular, recurring interactions for earn-and-burners.
These two personas emerge in the 2016 Excentus survey, The Road to Rewards Revisited. More than 1,000 U.S. consumers were polled about rewards and their impact on shopping behaviors.
Twenty-seven percent of surveyed consumers fall into this category, and they accumulate rewards on cards or within programs for long-term gratification. Some let rewards accrue to pay down credit card balances, or they treat rewards as cash for products or payments. Another 12 percent accumulate rewards for special gifts or special occasions, and 9 percent save rewards for family and personal purchases (e.g., holiday shopping, birthday gifts, back-to-school items, household goods).
Sixteen percent fall into this category, and they're likely to pursue more frequent redemption opportunities, such as instant discounts or the ability to earn rewards for frequent, recurring purchases. Convenience store loyalty programs are often built on the habits of these customers — i.e., repeat visitors or impulse buyers who like to take advantage of instant, valuable and recurring savings. Typically, 15 percent of earn-and-burners redeem rewards within a month of earning them, and 16 percent choose fuel discounts as their preferred loyalty reward.
What do the findings highlight for retailers and convenience store operators as they launch, improve and update their loyalty programs to be more successful and profitable? And what advice exists for retailers without a formal loyalty program? Consider the following three tips:
1. Create promotions that help save-for-laters build value over time. Punchcard programs and perks that accrue at the point of sale feed these customers’ need for value that builds. So does a mobile app that allows them to check their rewards status frequently and redeem when they've pooled rewards that provide substantial value. Tailor perks for the products that save-for-laters buy regularly so they can watch their spending feed a pool of rewards. Consider cross-promotions with well-known brands to reinforce the value of accrued rewards and provide cross-brand opportunities to earn them.
2. Provide instant discounts, readily available coupons, rotating in-store offers and promotions on frequently purchased products to resonate with earn-and-burners’ need for continuous engagement and real-time value. Their preference for fuel discounts is testament to their desire to turn everyday spending into a rewards-building currency that helps them save on an everyday expense like gasoline. Maintain a rotating schedule of promotions with major brands to feed members’ desire for frequent interactions.
3. Offer a mix of both rewards that build value over time and rewards that can be quickly or instantly redeemed. Remember that loyalty programs have the power to change consumer behaviors if the rewards and promotions are compelling enough to catch shoppers’ attention, resonate with their behaviors, and provide unique value that convinces them to return again and again.
Jeff Hassman is chief marketing officer of Excentus, a customer loyalty and rewards program provider.
Jeff Hassman is Chief Marketing Officer of Excentus, the only U.S. loyalty provider that offers loyalty marketing and technology solutions and also operates its own nationwide loyalty program, the Fuel Rewards® program. It specializes in flexible loyalty programs and solutions for convenience retailers, specialty retailers, grocers and consumers packaged goods brands.