How Inflation Boosted Consumer Interest in Loyalty Programs
CPG shoppers have never had more options when it comes to product selection, making it hugely important for brands to keep customers happy and coming back for more. Loyalty programs are a key part of this, helping brands communicate with customers with timely offers and information.
Tinuiti surveyed more than 3,000 CPG shoppers across three unique surveys focused on beauty, food and beverage, and OTC health product buying behavior for The 2023 CPG Customer Journey report. Here we’ll unpack some of the key findings related to loyalty programs that will help marketers better understand what their customers want from these relationships.
Inflation Is Driving Consumers to Loyalty Programs
At least 20% of shoppers across all three product categories studied had joined more loyalty programs over the last year to get special offers or discounts as a result of higher product prices. This was particularly true of younger generations, who far outpaced older cohorts in joining loyalty programs due to inflation, particularly in the beauty category.
As such, the year ahead stands to be a strong opportunity to attract new loyalty members, particularly young ones, with promotional incentives.
Promotions and discounts also play a huge role in keeping loyalty program members engaged, as evidenced by what respondents found most valuable in these programs. The top two responses across each of the three product categories studied were coupons/rewards that can be used for future purchases and instant savings on certain products.
However, the appetite for other features varies greatly by generation, and should certainly factor into loyalty program strategy.
Younger Generations Don’t Just Want Discounts Out of Loyalty Memberships
Gen Z respondents were much more likely than older generations to select early access to new products as the feature they most value in loyalty programs. Compared to Boomers, Gen Z were more than five times as likely to choose early access to new products as the most valuable feature of food and beverage loyalty programs.
New products weren’t the only feature that piqued younger generations’ interest. Across all three product categories studied, Gen Z respondents were at least four times as likely as Boomers to say that the chance to win a large prize is the loyalty program feature they would find most valuable.
Thus, while discounts might be key to attracting new loyalty members, keeping members engaged with your brands doesn’t necessarily mean sticking to a discounting strategy. Particularly for younger generations, early access to new product lines and drawings for large prizes might be strong ways to keep loyalty program members happy.
Conclusion
Consumers have been feeling the effects of rising product prices for a couple of years now, and it’s driving many to join loyalty programs in the hopes of limiting the impact to their wallets. As such, it’s a bumper time to attract loyalty members with the promise of discounts and rewards programs.
However, marketers can help keep customers loyal in more ways than just cutting prices. Particularly with younger generations, perks like early access to new products and the chance to win a large prize might be strong incentives for some loyalty program members. Make sure your loyalty strategy is putting the right messaging and offers in front of customers to keep them coming back for more.
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