Table of Contents
Scope and Themes
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- What you need to know
- Data sources
- Consumer survey data
- Advertising creative
- Abbreviations and terms
- Abbreviations
- Companies mentioned in this report:
Executive Summary
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- Industry overview
- Loyalty programs are more popular than ever
- They are also underutilized
- The economy has a great deal to do with loyalty program popularity
- Making the programs more effective
- Technology is changing loyalty programs
Insights and Opportunities
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- Key points
- Targeting moms
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- Figure 1: Percent of decisions influenced by moms, April 2010
- Social networking sites
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- Figure 2: Number of unique users of top social networking sites, 2008-10
- Mobile – the next frontier
- Application-based mobile loyalty programs
- Mobile couponing
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- Figure 3: Mobile Coupons redeemed in North America (in millions), November 2009
- More sophisticated CRM data help create more effective incentives
- SMEs offer opportunity
- Creating partnerships
- Use clues from members to improve programs
Inspire Insights
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- Trend: Screenagers
- Trend: Credit Card Companies Target Customers Who Pay On Time
- Trend: Smart Shopping Gets Smarter
Market Size and Forecast
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- Key points
- Membership in loyalty programs continues to rise
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- Figure 4: Loyalty program memberships (in billions), 2000, 2006 and 2008
- Figure 5: Financial services loyalty program memberships (in millions), 2000, 2006 and 2008
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- Figure 6: Number of loyalty memberships, by sector, 2008
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- Figure 7: Financial services loyalty program participating members vs. active members, June 2010
- Figure 8: Loyalty Memberships, by category, 2008
- But bigger doesn’t necessarily mean more effective
Competitive Context
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- Key points
- The slow economy increases the competitive challenge
- Competition is fierce—communication is key
Marketing Channels
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- Key points
- Social networking sites offer great opportunity
- Who’s using social networking sites?
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- Figure 9: Average age distribution across all social networking sites (U.S. only), February 2010
- Different age groups use different sites
- Word-of-mouth still works
- Email works best
- Regular mail still works, too
Market Drivers
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- Key points
- The recession has affected spending habits
- Younger groups are increasingly important
- New regulations may affect debit rewards programs
Innovation and Innovators
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- Key points
- American Express
- British Airways
- Starbucks
- MasterCard
- Nissan
- Regions Bank
- Prepaid and debit cards are offering rewards
Marketing Strategies
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- Key points
- Overview
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- Figure 10: Growth of ad spend on top social network sites, August 2008-August 2009
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- Figure 11: Top U.S. social networking site for advertising, by industry, ranked by display ad impressions, August 2009
- Print advertising
- Still popular: Opportunity to save or earn cash
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- Figure 12: American Express print ad, 2010
- Figure 13: Commerce Bank print ad, 2010
- More than just toasters
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- Figure 14: Bar Harbor Bank print ad, 2010
- Direct mail advertising
- Consumers’ choice: More rewards or rewards earned faster
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- Figure 15: Discover direct mail campaign, January-December 2010
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- Figure 16: Bank of America direct mail letter, January-February 2010
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- Figure 17: American Express direct Mail, December 2009-January 2010
- Figure 18: Key Bank direct mail, June 2009
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- Figure 19: Capital One direct mail, November 2009
- Online and email advertising
- Maximizing advantages of social networking sites
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- Figure 20: Free Spirit MasterCard email, February 2010
- Targeting a specific audience
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- Figure 21: Best Buy/MasterCard email, June 2010
- Unique opportunities can also be a reward
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- Figure 22: American Express ticket offer, June 2010
- Rewards for being a card member
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- Figure 23: Disney/Visa Rewards card, June 2010
- Television advertising
- Helping people save
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- Figure 24: Bank of America, “Chuck earns Cash Back With Gas”, 2009
- Figure 25: Bank of America, “Elizabeth is seen as she swipes her card to earn cash back shopping”, 2009
- Taking aim at customer objections
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- Figure 26: Chase, “Couple picks out their next vacation”, 2010
- Figure 27: Capital One, “Vikings grocery shop, go to dry cleaner & use a live mouse for computer”, 2010
- Differentiation through extra rewards
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- Figure 28: Capital One, “Vikings take their ski trip with double points”, 2010
- Figure 29: Capital One, “Vikings take beach vacation: Double miles on every purchase”, 2010
The Consumer
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- Key points
- Types of loyalty programs in which consumers participate
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- Figure 30: Type of loyalty program participation, by gender, June 2010
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- Figure 31: Loyalty program participation, by age, June 2010
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- Figure 32: Loyalty program participation, by income, June 2010
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- Figure 33: Loyalty program participation, by race, June 2010
- Attractive incentives
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- Figure 34: Incentives for using loyalty program, by gender, June 2010
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- Figure 35: Incentives for using loyalty program, by age, June 2010
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- Figure 36: Incentives for using loyalty program, by income, June 2010
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- Figure 37: Incentives for using loyalty program, by race, June 2010
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- Figure 38: Incentives for using loyalty program, by marital status and presence of children, June 2010
- Important attributes of a loyalty program
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- Figure 39: Important attributes of a loyalty program, by gender, June 2010
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- Figure 40: Important attributes of a loyalty program, by age, June 2010
- Primary credit card issuer
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- Figure 41: Primary card issuer, by age, June 2010
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- Figure 42: Primary card issuer, by income, June 2010
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- Figure 43: Primary card issuer, by region, June 2010
- Most important card benefits
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- Figure 44: Reasons for using card most frequently, by gender, June 2010
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- Figure 45: Reasons for using card most frequently, by age, June 2010
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- Figure 46: Reasons for using card most frequently, by race/ethnicity, June 2010
- Number of cards consumers have
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- Figure 47: Number of credit cards used in past 60 days, by gender, June 2010
- Comparing credit card offers
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- Figure 48: Compare credit card offers, by gender, June 2010
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- Figure 49: Compare credit card offers, by age, June 2010
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- Figure 50: Whether compare credit card offers, by income, June 2010
Cluster Analysis
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- Key points
- Loyalists
- Demographics
- Characteristics
- Opportunity
- Immediates
- Demographics
- Characteristics
- Opportunity
- Cashies
- Demographics
- Characteristics
- Opportunity
- Cluster characteristics
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- Figure 51: Loyalty marketing clusters, June 2010
- Figure 52: Loyalty program participation, by loyalty marketing clusters, June 2010
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- Figure 53: Incentives for using loyalty program, by loyalty marketing clusters, June 2010
- Figure 54: Important attributes of a loyalty program, by loyalty marketing clusters, June 2010
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- Figure 55: Reasons for using card most frequently, by loyalty marketing clusters, June 2010
- Cluster demographics
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- Figure 56: Loyalty marketing clusters, by gender, June 2010
- Figure 57: Loyalty marketing clusters, by age group, June 2010
- Figure 58: Loyalty marketing clusters, by income group, June 2010
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- Figure 59: Loyalty marketing clusters, by race, June 2010
- Figure 60: Loyalty marketing clusters, by Hispanic origin, June 2010
- Cluster methodology
Key Drivers Analysis
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- Key drivers
- Discussion
- Importance of Incentives
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- Figure 61: Incentives to use a credit card loyalty program by whether respondent has switched in the past, June 2010
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- Figure 62: Incentives to use a credit card loyalty program by self-reported FICO® or other credit score, June 2010
Custom Consumer Groups
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- Key points
- Type of loyalty programs in which consumers participate
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- Figure 63: Loyalty program participation, by gender and age, June 2010
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- Figure 64: Loyalty program participation, by race and income, June 2010
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- Figure 65: Loyalty program participation, by marital status and presence of children, June 2010
- Attractive incentives
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- Figure 66: Incentives for using loyalty program, by race and income, June 2010
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- Figure 67: Incentives for using loyalty program, by gender and age, June 2010
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- Figure 68: Incentives for using loyalty program, by size of household, June 2010
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- Figure 69: Incentives for using loyalty program, by marital status and presence of children, June 2010
- Primary card issuer
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- Figure 70: Primary card issuer, by race and income, June 2010
- Most important card benefits
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- Figure 71: Reasons for using card most frequently, by marital status and presence of children, June 2010
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- Figure 72: Reasons for using card most frequently, by gender and age, June 2010
Appendix: Trade Associations
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