Australian consumer behaviour is changing, and loyalty, retention, and rewards programs must adjust to keep up. The questions are, what do those changes look like, and what must programs do to remain competitive? These are compelling questions that are popping up at every level of the economy.
The leaders of consumer businesses large, small, and new are asking where the opportunities lie, what do consumers expect, and what will drive satisfaction for program members?
Rewards Program Insights
Two climates faced by Asia Pacific Rewards Programs
In the spirit of such questions, MasterCard has recently published the findings of their investigation into the subject in Asia Pacific markets, including Australia. Their Loyalty Study for the Asia Pacific region surveyed 7,000 loyalty members throughout the region and has some fascinating findings.
MasterCard surveyed respondents who were members of loyalty programs in Australia, Hong Kong, Japan, South Korea, China, India, and Indonesia. The results showed that member behaviour changed with market maturity. The result for the first four, with fully developed economies, indicated that programs face stiffening competition. Conversely, the developing economies of India, China, and Indonesia, with their expanding middle classes present opportunities for program growth.
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Popular Rewards Programs – Retail, Finance, Airlines
In Australia, the survey found that 79% of consumers are members of retail loyalty programs, 50% are in airline rewards, and 43% are members of loyalty and rewards programs for financial institutions. The average consumer in Australia participates in more than six programs.
The most striking statistic to emerge from the MasterCard survey is perhaps the importance of being the Most Important Program (MIP) in the mind of consumers. With consumers apart of multiple programs in single industries, consumers tend to pick an MIP, which then has the most influence on how they spend their money.
The preference for one program was a critical finding that consumers are likely to be influenced by. 22% of Australian respondents said that they believe that they are strongly influenced in their purchases by their MIP.
The battle ahead for programs is becoming MIP for more consumers and engaging more actively with those valuable members. The goal is to convert from memberships to being the MIP in consumer’s minds. The survey says that there are three reasons why a program is most important to consumers.
The Path to MIP Status – Digitisation, Personalisation & Communication
In Australia, 38% of the respondents most value having no programs cost, 36% seek the greatest personal relevance of rewards and 29% look for programs where benefits are easy to earn. Additionally, the report suggests three ways to drive consumer conversions: Digitisation, personalisation, and communication.
Digitisation, or having access to rewards and account information online is a highly effective way to reach consumers. There are two digital paths to the Australian consumer. The first is having a website because 67% of consumers have access to the web. The other is through apps for mobile devices, such as smartphones and tablets. MasterCard recommends utilising both channels to reach member to promote sign-ups, redemptions, account management, and as a driving force for future offers.
Personalisation is something valued most by program members in their MIPs, and on the whole, they are dissatisfied with the current level. The survey found that 64% of members would be willing to share more personal information in return for greater satisfaction with their MIP.
The need for personalisation brings us to the third point, which is how enhanced communication can drive engagement. While better than the region as a whole, Australian respondents say that only 42% of MIPs email them enough.
Rewards & Loyalty Conclusions
The place to be in loyalty and rewards programs is at the top. The Most Important Programs for consumers get a much greater share of their attention than the rest of the crowd. It means that based on MasterCard’s findings, an integrated effort to enhance digitisation, personalisation, and communication is the strategy that will grow a brand’s share in this competitive market.