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Happenings in the retail space - Part 2

In my blog yesterday I started to explore some of the challenges retailers face with loyalty schemes. Continuing that theme, we also found from our research that more than 2 in 5 U.S. consumers have had a negative experience with a loyalty program.

Three out of four Americans are members of at least one retail loyalty card program, and the  majority (62 percent) join retail loyalty programs so they can get discounts on the things they buy most, yet only about one third (36 percent) received a reward or promotion that made them come back to the store again, and 1 in 4 (27 percent) of consumers complain they have received a reward or promotion for something they would never buy. In addition our findings told us:

• A mere 27 percent of Americans have received a loyalty program reward or promotion that made them feel valued as a customer.
• Eighty one percent of American loyalty program members are enrolled in a program that they don’t completely understand.
• Many loyalty programs leave consumers feeling underappreciated; 85 percent of members report that they haven’t heard a single word from a loyalty program since the day they signed up.
• Whether it was a reward they didn’t want (27 percent) or a reward that was too small to take seriously (22 percent), more than 2 in 5 (44 percent) consumers have had a negative experience from a loyalty program. 

Loyalty programs have long been a logical way to leverage consumer satisfaction, but retailers are missing the mark when it comes to reaching out to consumers with information and offers that are relevant to them. The end result is that memberships are becoming meaningless.