A report from global professional services company Accenture has revealed insight into the relationship between consumers and loyalty programmes, both in travel and the more general retail arena.
Accenture’s “Seeing Beyond the Loyalty Illusion” report, which surveyed 25,000 people across 33 rooms, has revealed that 71 per cent of people claim loyalty schemes do not engender loyalty, and 61 per cent have switched some or all of their business from one brand to another in the last year.
Millennials, according to the study, are more demanding than any other demographic, with one in four saying that what makes them loyal is different to three years ago.
Umar Riaz, a managing director in Accenture’s Travel practice, said: “As part of the ‘always-connected’ generation, Millennials have different channel preferences and are significantly more likely to use mobile channels to book their hotel stay.
“In addition, Millennials are more likely to have switched hotel providers in the last six months. The hotel industry must place a strong importance on their mobile presence and look to curb this switching behavior”
Overall, 77 per cent of consumers say they now retract their loyalty more quickly than they did three years ago, and almost a quarter (especially younger people) have a negative or non-existent reaction to companies’ loyalty efforts.
However, 57 per cent of people spend more on the brands to which they are loyal.
Accenture says: “Leaders who recognise their loyalty programmes aren’t delivering the results they desire have the opportunity, if not the obligation, to rethink how, why and how much they are investing in loyalty.”
Laura Gurski, a senior managing director in Accenture’s customer and channels consulting practice, said: “Today’s Millennials expect closer, more-personalised relationships with brands. Organisations have the opportunity to benefit long-term from Millennial loyalty, but the challenge will be earning that loyalty in the first place.
“To do so, brands and organisations need to create a deep, authentic and appropriately personal experience that make their products seem tailor-made — or at least more relevant to — individual consumers.
“The more that consumers experience this sort of intimacy with brands, the more they will grow to expect it across other brand interactions. The expectation is already there to some extent and is spreading fast.”
Stephen Ferneyhough, managing director of global travel and hospitality, told Business Traveller: “The challenge with loyalty within travel is that it was set up a long time ago, before the digital era. So now with all the innovation that is available and real-time connectivity to customers, loyalty within travel needs to change.
“The other thing that happens of course is that many customers don’t travel that frequently with an airline or stay that frequently with a hotel, so you have to consider how can I continue to generate brand loyalty for the occasional user, or even the unknown user, as well as the frequent flyer or business traveller.
“Traditionally you used to just earn and spend hotel points at hotels, no you can earn and spend in many different ways, you can be part of a wine club or buy things on Amazon. Loyalty’s purpose is changing in the digital age.”