Evolving brand loyalty trends and consumer behavior [REPORT]

The current macroeconomic environment, marked by higher interest rates and slowed consumer spending, could make consumer loyalty programs more crucial than ever for brands. But consumer attitudes toward these programs can be fickle. Learn more about what consumers want and how brands can evolve their loyalty programs to keep up.

For the third year in a row, our consumer loyalty survey asks participants to rank the importance of key program features and benefits to reveal insights into how these preferences are evolving and may vary across consumer segments. The latest survey results reveal a mix: Among five key trends, three provide updates on themes we saw in our 2022 report, while two are newly emerging.

The evolution of loyalty program trends

In 2023, we discovered there’s a divide among industries on the role of the credit card. The linkage of co-branded credit cards to loyalty programs may no longer be as important as it once was for certain industries. This suggests that, particularly when consumer spend is down, companies in industries where co-branded credit cards are considered less important components of a loyalty program may not need to drive a direct association between their credit cards and their larger loyalty experience.

Additionally, in contrast to last year’s steep increase, this year’s results revealed a decreased willingness to share personal data with loyalty programs, signaling that brands should consider new methods to enhance consumer trust while still delivering personalized loyalty experiences.

Finally, similar to last year, the simplicity of a program and the financial value it provides continue to rank as the two most important attributes of a loyalty program. We found this to be true for consumers across age groups, indicating that these key features and benefits should remain top priorities for brands.

New trends emerging in this year’s survey

While our survey indicates there’s been a rise in participation in paid loyalty programs, we found that consumer willingness to spend is not markedly different between paid programs and free programs. This suggests that there could be an opportunity for brands to gain more share of wallet by designing paid programs to incentivize additional spend and engagement.

Additionally, this year’s survey revealed a rise in demand for specialized treatment and improved customer service in return for consumer loyalty. In other words, brands that provide more premium or white-glove services through targeted offers and benefits may see higher consumer engagement, satisfaction, and spend.

To help drive loyalty program demand and consumer engagement, brands should:

• Recognize the nuanced importance of co-branded credit cards across industries.
• Enhance trust in data capture while continuing to provide personalized experiences.
• Keep loyalty programs simple, with easy ways to earn and redeem rewards.
• Design paid programs to help drive additional spend and engagement.
• Offer premium rewards and enhanced customer service.

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