Consumers will spend more with retailers that have loyalty programs but it does not necessarily mean they will choose to be loyal to that specific retailer, a new study reveals.

The ‘For love or money? 2013 consumer study into Australian loyalty program’ report found 80 per cent of Australians who are members of a loyalty program will spend more at a retail store. However, only 46 per cent actually feel more loyal to a brand because of a loyalty program. This indicates that loyalty programs does not equal to great customer loyalty.

However, the study, which was commissioned by marketing company Directivity and digital agency Citrus and conducted by First Point Research and Consulting, did find loyalty programs are far-reaching, with 88 per cent of consumers over the age 16 belonging to a program.

When it comes to program benefits consumers want the most, financial rewards still rate the highest, with 80 per cent of respondents rating discounts when making purchases as very important.

Points-based programs where members can redeem points for vouchers, products or other rewards were the second most popular benefit (77 per cent).

“Basic monetary rewards give retailers a ‘ticket to play’ in the loyalty game but the real opportunity lies in building deeper engagement with members through more personally relevant, unexpected and emotional rewards,” Adam Posner, CEO of Directivity, said.

“This plays out in the research which shows surprise rewards such as a gift on your birthday, exclusive offers or special experiences go a long way to overcoming the belief that programs don’t offer any real value.”

Older Australians in particular (55+) buy more than younger consumers and choose to buy from companies who have a loyalty program over those who don’t. However they also believe more strongly that programs don’t offer any real value.

“Retail marketers shouldn’t dismiss this older age group given their higher propensity to spend, but need to work harder to offer greater value,” Citrus CEO Peter Noble said.

Having a tiered rewards program such as gold/silver/platinum memberships based on the amount you spend is a turn off for consumers, with only 36 per cent saying they were very important.

“Ultimately financial rewards win the day for consumers and is the main motivation for joining loyalty programs,” Noble said. “But a winning program is one that also has multiple emotional and unexpected benefits creating an element of ‘surprise and delight’ and tailoring offers based on consumer needs and preferences.”

When it came down to citing the top 10 loyalty programs as "doing a particularly good job", Coles Flybuys rated in number one position. This was followed by Woolworths Everyday Rewards, Qantas Frequent Flyer and MYERone.

A copy of the report is available for download here.