Woolies claws back reward card trust as Australians remain in love with loyalty programs

Australians are more in love with their loyalty programs than ever before claims a report by The Point of Loyalty which found Woolworths has clawed back much of the lost ground after its Rewards Card about face last year.

The ‘For Love or Money 2017’ report surveyed 1,029 adult Australians and found the average is part of more than four loyalty programs while the typical Millennial consumer is a member of five schemes.

Coles Flybuys remains number one with 34% of respondents saying the program is doing a good job with Woolworths Rewards up to 13% from 9% in 2016. Qantas Frequent Flyer remained in third place since the first study in 2013.

Report author and CEO of The Point of Loyalty, Adam Posner, says the fifth annual study by the company shows local consumers are staying loyal to programs and redeeming more rewards.

“This year, key indicators of program health such as defection and reward redemption are improving. Defection is declining, down from 23% in 2016 to 18% in 2017,” Posner said.

“Rewards earned by members are being redeemed more than ever before, with 64% of members indicating they are enjoying the benefits of their programs, up from 57% in 2016” he added.

Nearly two-thirds of consumers, up from just over half in the 2016 survey, believe brands need a loyalty program to keep their customers loyal and 81% tend to purchase more from the companies which have loyalty programs they are a member of.

Posner’s findings tally with a study earlier this year from loyalty specialist agency ICLP which found while Aldi was performing strongly in most customer satisfaction measures, the German supermarket chain was lagging behind its local competitors in not having a rewards program.

The 2017 study also set out to understand what loyalty is in consumers’ view beyond simply enrolling in a loyalty program.

“There is ongoing debate on the definition of ‘customer loyalty’ which impacts on the strategies to achieve the loyalty nirvana and so we wanted to get more clarity from consumers,” Posner said.

Posner’s research revealed consumers ranked behaviour indicators of ‘purchasing more’ and ‘purchases more often’ from a brand over the longer term versus similar competitor options as the top motivators.

‘Trusting the brand/business with their information’ and ‘recommending the brand/business to other people’ were other key factors in retaining loyalty.

“Whilst I was not surprised by the purchase behaviour indicators of loyalty, it was interesting to find that ‘trust with information’ was so highly rated as an indicator of loyalty,” said Posner. “The massive explosion of data and its availability and access, makes trust a currency of brand loyalty.”


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