Loyalty programs not rewarding

Most loyalty or reward programs are based on “synthetic loyalty”, according to Carlson Marketing Group's recent study of 600 consumers in Australia, Thailand, Singapore and Malaysia. The study, “Relationship Builder”, indicated that these programs need to be reassessed because the factors that consumers expect and consider important in their relationships with companies are not being met.

The study examined consumers' attitudes to brands in the banking, retail and telecommunications sectors. It found that while Australians said they were “emotionally close to brands” this did not translate into behavioural commitment or genuine loyalty. Overall, the most important factors in a relationship were seen to be the company apologising, going to extra effort, understanding and giving preferential treatment. In banking, recognition, familiarity and constant staff were rated as the most important factors. The least important factors across all sectors were the company having a web site and rewards.

Carlson's MD Karl Schuster said that the study reiterates the fact that consumers are looking for companies which “walk loyalty, not just talk it”. Robert Janes, Carlson's president of Asia-Pacific and Europe, said that many companies are reassessing reward programs because they were unprofitable or had failed to drive customer loyalty. He said that with any form of loyalty program, the great challenge is to treat each customer appropriately. Carlson is a relationship marketing company. Its Australian clients include Commonwealth Bank, Westpac, Citibank/Diners Club and AMP.