With Australia’s consumer price index (CPI) rising in recent months, there is more interest in loyalty programs now than before, according to a new study by leading app comparison website for small businesses, GetApp, with more than half of respondents (54%) experiencing the effects of inflation to the point where they switched brands or started to buy less.
With almost two-thirds (59%) of respondents looking for new ways to save money on their shopping because of inflation, 84% of respondents currently use loyalty programs, proving their popularity in Australia. Among current users, nine in 10 (90%) respondents said they use more than one, with the majority (60%) signing up for between two and four different schemes.
According to the survey, points-based loyalty programs are the most popular, with 92% of respondents saying they use this program. The majority (87%) belong to a supermarket loyalty program, making it the most popular industry. Fuel stations, second to supermarkets, were cited by 40% of loyalty program users, showing that they involve more frequent, repeat spending. Regular use is evident, with 35% of respondents using a loyalty program two to six days per week.
Rewards are a huge benefit for consumers who tend to use loyalty programs. 78% of survey-takers said regular rewards such as coupons are the main advantage they receive, followed by 67% who cite discounts as one of the advantages they currently get.
Consumers are primarily happy to provide their data for loyalty programs, as only 26% of users currently using loyalty programs said brands tracking their shopping behaviour is a disadvantage. Only 18% of those that stopped using a program in the past did so for that reason. Just over two-thirds (68%) think that brands offer loyalty programs to retain customers and increase sales. 19% perceive their primary reason as a way to give something back to their customers, and only 13% think the main reason is to collect customer data.
“A successful loyalty program needs to offer customers attainable and worthwhile rewards. Due to the rising living costs, consumers seek to save money where possible, especially shopping costs. Businesses that align their rewards with customer needs can help them stand out in their marketing efforts to gain and retain customers. Discounts in a time of inflation are in demand, with most loyalty program users specifically seeking discounts as a benefit,” GetApp Australia content analyst, Andrew Blair said.