Executive Summary

Launch Edition

THE OPPORTUNITYWITHINDISRUPTION—Loyalty is changing faster than everbefore. The game is being disrupted
by escalating customer expectations,perpetual new players, evolving
technologies, and a game board
that’s constantly in flux. Brands mustshape-shift with the living landscapeas it continues to unfold—challenging
traditional Program boundaries andreinvigorating the customer experience.
Loyalty is no longer simply a byproductof the Program. It’s paramount for theBrand. It’s become both rational andemotional, living beyond the transaction
in all Member engagements within

and beyond the Brand. Programs are
now central to the customer/Brand
relationship and this shifting Loyalty
Program paradigm has given way
to a more powerful driver of Brand
performance, Member spend, choice,and advocacy.
To make smart moves, marketers andProgram operators are embracing thisopportunity to reimagine their strategy,
rethink their Brand’s boundaries, andrapidly iterate their next move.
Where will the changing gametake your Program?

LARGEST STUDY
OF LOYALTYGLOBALLY—SAMPLE OF

50k+
800+ 15+NORTH AMERICAN + SOUTH AMERICAN+ EUROPEAN CONSUMERS

EXAMININGIN

ACROSSLOYALTY PROGRAMSINDUSTRY SECTORSATTRIBUTES50+• Airline• Gas/Convenience• Program Mechanics• Apparel Retail• Grocery• Rewards and Redemption• Automotive• Hotel• Earn Mechanics• Big Box Retail• Informal• Program/Brand Alignment• Car Rental• Online Retail• Emotional Loyalty• CPG• Pet Retail• Program Influence on• Entertainment• Pharmacy• Fitness• Sports• Food Service… and more.

Behavior• Digital Experiences• Human Experiences... and more.

FAST FACTS
Escalating customer expectations, new players, and a game board in flux are disrupting Loyalty and creating newopportunities for Programs to powerfully impact customer spend, choice, advocacy, and retention. The Loyalty Report2018 decodes this shape-shifting landscape, the changing rules of engagement, evolving Program boundaries, and more.
It’s time for marketers and Program operators to reimagine their strategy, rethink customer engagement, and rapidlyiterate their next move.
IT’S TIME TO GET IN THE GAME.

THE BRAND IS INCREASINGLY AT THE
CORE OF THE EXPERIENCEMEMBER SATISFACTION BY SECTOR

50%

48%

48%Grocery

Credit Cards

Dining

47%

47%

44%

Gas

HotelSpecialty Retailof Members say that Loyalty Programs are ameaningful part of their Brand relationships.
72% Females

44%

43%

42%

73% Households with Children

Drug StoreCar Rental

CPG

40%

38%

36%

Movie

ApparelAirline71%

75% Older Millennials

78% Upper Affluent

THE IMPACT
Loyalty Programs continue to heavily influence Member
advocacy, retention, and spend.

70%
SAY

77%
STAY

63%
SPEND

I am more likely
to recommend
Brands with good
Loyalty Programs.

Programs makeme more likely
to continue
doing businesswith Brands.

I modify my Brand
spend to maximize
Loyalty benefits.

+27%THE EMOTIONAL CONNECTION

TOP FIVE DRIVERS OF MEMBERSATISFACTION
Program meets needs

Enjoy participating in Program

Program rewards/benefits appealing

Program consistent with Brand expectations

Programs that establish positive emotional
connections with Members see 27% more of their
Membership increasing their spend with the Brand.

#LOYALTYREPORT | 4

Program makes Brand experience better

MONITORING IS MUTUALLY BENEFICIAL!
87% of Members are interested in having details of theiractivity and behavior monitored in order to receive access87%

to personalized rewards or engagement.
Even higher among...

88% Households with Children
94% Affluent

91% Gen Z

YOUR PEOPLE IMPACT THE CUSTOMER EXPERIENCE
Effective Brand representatives drive higher Member satisfaction. Yet...

!

ONLY 21%of Members are prompted
to use Program by Brand
representatives.

!

ONLY 20%
get help to makethe most of theirmembership.

!

ONLY 19%of Members feel special
and recognized by Brand
representatives.

MIND YOUR MANNERS!
A positive redemption experience can be a long-lasting driver of Member satisfaction, yet many Programs

Thank Member for redemption/Program membership

44%

Send confirmation email with redemption details

34%

Congratulate Member for redemption/Program Membership

31%

Give Member points/miles/cashback gift to help next redemption

18%

Keep Member informed about delivery progress/arrival date17%

Follow up to ask if Member was happy with redemption

17%

Ask Member to set a new goal

9%21%

None of the above

Over 800 Programs.

When a Member redeemed, did the Program…

ASK US ABOUT YOURPROGRAM’S DNA

are not taking steps to create a positive experience.

MEMBERS WANT TO CONNECT WITH NEW TECHNOLOGY

95%VR

Chatbots

Wearables

AR/360° Video

Biometricsof Members wantto engage with their
Program through new andemerging tech, including
wearables, AR, VR,chatbots, etc.

A NEWI

t’s time to adopt a new outlook on Loyalty and move

PERSPECTIVE
CHANGE YOUR GAME AND YOU COULD SEE
A 7.5× LIFT IN MEMBERS’ SATISFACTION.

—beyond your Brand’s boundaries. Disruption is not

only redefining the game board of Loyalty, it’s creating
an entirely new competitive landscape for Brands willingto make moves.
The players, agents, obstacles, goals, and strategies
are all in motion. This change is being fueled by thecustomer’s demand for better, smarter Programs—andfor an expanded and enriched customer experience.
Change your game to meet this expectation, and you
could see a 7.5× lift in members’ satisfaction.

Amidst new players and competition, The Loyalty Report 2018 highlights where Brands can differentiate and improve theperformance of their Loyalty Programs. Here are a few opportunities we think matter most to your Brand in 2018.

CHOICE IS THE NEW CURRENCY
OF LOYALTY
There’s a revolution happening in our homes, in our cars, on ourwrists, and in the way consumers expect to engage with Brands andtheir products. Consumers are more open to, and even embracing,the option to track all aspects of their lives—steps taken, hours
slept, lines skipped, how safely they drive…even their love lives.

“The number one problem forpeople is time poverty”– Dilip Kumar, VP Technology Amazon Go

We have tracked consumer openness to being observed for a

Commenting on the ease and time saving

long time, and our results this year show that what used to beexperience of Amazon Go.

considered creepy by many consumers is becoming mainstream;in fact, 87% say they are open to having various details of
their activity monitored in exchange for more personalized
rewards and brand experiences. No longer are your customers
merely counting points obtained through purchase; they’recounting time saved, convenience,incidents, flexibilities, and graces.
Time, ease, access, brain space, status,
humanity, and so on are the new
currencies of our lives, and our loyalties.
If you’re not offering this trade—
intimacy for relevancy—you may be

87%of Americans are willingto have various details of
their activity tracked bya brand in exchange fora more personalized andrelevant relationship with
the Brand or Program.

missing out on invaluable small data,
not just big data, and the opportunity to use that information toforge deeper and longer lasting relationships with it. The reward
is the opportunity to choose. Anything that you can count can,and will, become a Loyalty currency.
#LOYALTYREPORT | 6

TAKE THE LEAD, PUT PERSONALIZATION
INTO PRACTICE
Too often, the advancement of technology happens exclusively
to solve functional problems such as timeliness, but at theexpense of the human experience. Yes, customers do want more,better, quicker, but they don’t want to give up the traditional
experiences that come with recognition and manners.
Our study shows that feeling valued, and special/recognized
are important drivers of Member satisfaction. But only 44% ofMembers were thanked for a redemption and just 19% say theirProgram makes them feel special/recognized.
Programs should innovate in ways that use technology to createa more personalized and meaningful relationship; that arm
representatives with more, better, and relevant information
about the customer; and that put just as much importance on theemotional experience as on the functional experience.

A NEW PERSPECTIVE#PAY2PLAYLOYALTY ACROSS THE ENTERPRISE

The desire for convenience, and a sense of status and affluence

Companies with a wide range of Brands, products, and divisions,have produced a new breed of customer—one willing to payhave struggled to cohesively weave their Loyalty Programs

for access, benefits, and experiences in numbers never before

throughout their offering, like points for card purchases but notseen. This group is willing to engage in a pay-to-play model

mortgages; for flights but not in-flight purchases; for groceries

that Brands such as Amazon Prime (once again a top-ranked

but not gas. Aligning your company’s diverse offerings under

Program in The Loyalty Report 2018) have so aptly recognized

an enterprise-wide Program allows you to deliver an easier andand capitalized on.

more complete customer experience across all touch points.

This model transcends the digital space. Traditional retailers,hotels, airlines, banks, and credit card issuers are taking
advantage of this mechanic, knowing that 37% of customers
are willing to pay a fee for an enhanced tier of Membership in
their Loyalty Programs. These customers see it as a small costto pay for status, access, ease, and a better Program experience.
Brands see the potential for a substantial revenue stream thatOne such Brand to do this is Williams-Sonoma Inc. Its Key
Rewards Program unlocks rewards every time key holders shop
at any of their seven Brands, which include Pottery Barn, WestElm, and William-Sonoma. To keep the gamechanging, the parent Brand is planning toextend the Program to their soon-to-belaunched West Elm Hotel Brand.

affords them the opportunity to provide richer, more tailored,Your customers want you to acknowledge them for a wider set

and highly relevant content and experiences.

of actions and spend—often across a broader set of products,

Willing to pay a fee forenhanced benefits.

37%

Even higher among…

47% Gen Z
46% Younger Millennials
46% Older Millennials

services, and key Brand partners. Brands that do not offer
a variety of product lines and services can mimic ‘enterpriseloyalty’ by establishing and leveraging partnerships with likeminded Brands. These alliances allow Brands to curate a Loyalty
ecosystem in which people are deeply engaged and entrenchedin the experiences. Not to be confused with coalitions, theseplayers are brand-aligned allies, who can help your Brand andBrands looking to make a bold move today to secure a successful

Loyalty Program live beyond its traditional boundaries andtomorrow should be seriously considering the addition of a paidinteract with your customers wherever they are—across theMembership or tier to their Loyalty ecosystem. It’s the newenterprise. Evolution like this is eventual. If not now, when?

move for Program operators.
According to sources, Members of Restoration Hardware’s
two-year-old RH paid Program account for 95% of sales; Game
Stop experiences 3× higher sales from paid Members; andLOYALTY NO LONGER STANDS ALONE.
IT’S INTEGRATING WITH THE CUSTOMEREXPERIENCE—AND VICE VERSA;

GNC is seeing a 2× lift in sales among their paid Members.

We are moving towards a future in which customers are not

Beyond sales, these Brands are enjoying significant operational

delineating between Program and Brand—where aspects ofefficiencies and promotional cost

the Brand experience are facilitated by the Program and thesavings. Also key is the fact that thesebenefits of Membership manifest themselves through better,brick and mortar retailers are finding

more personal and more relevant Brand interactions. Investingthemselves in digital shoes, wherein customer experience presents tremendous opportunities

soon, none of their customers will be

as well as the challenge to outpace customer expectations toaggregate or anonymous.

surprise and delight in a demanding space.

In this digital age, meaningful human interactions have new

Technology can feel bombarding and intimidating—changing

found power to engage and retain customers. Effective Brand

so quickly that it’s difficult to know what to invest in, and when.

representatives can lift Member satisfaction by 3.9×. Yet, Brand

In this new environment, our recommendation is to invest inrepresentatives have an opportunity to improve as only 21% oftechnology that mimics or enhances your Program’s humanity.

Members are prompted to use the Program; only 20% get help

The human element elicits an emotional response, which into make the most out of their memberships; and only 19% ofturn nurtures a customer who is engendered to your Brand.

members say Brand representatives make them feel special andPrograms that establish positive emotional connections withrecognized.

Members see 27% more of their Membership increasing theirspend with the Brand.
Technologies that enable real conversations, something that

“The Brands that are baking
Loyalty mechanics right into
the customer experience
are the ones that are really
capturing attention.”makes Members feel valuable and important and drive a deeper
emotional connection—these are the technologies that can help
you out-maneuver your competitors in an increasingly digital world.
Programs scoring high on emotional connection include: AmazonPrime, Sephora Beauty Insider, and Panera Bread MyPanera.

- Sean Claessen, Bond Brand Loyalty

TECHNOLOGY IN LOYALTY HAS REACHED A
TIPPING POINT
The changing Loyalty game that is underway will be facilitatedand reinforced by emerging technologies and Members’
increasing willingness (and desire) to engage with Brands andPrograms digitally.

digital tech in Loyalty into their lives. We’ve pointed to digital

THE LOYALTY OF TODAY IS PLAYING TOTOMORROW

innovation on the horizon for some time, and now Loyalty

This is a unique moment in time. The evolution of marketing

technology has reached a tipping point. Members have movedand Loyalty is shaping a new and exciting landscape full offrom skeptics to champions as the report finds that 95% of

opportunity, risk, and reward. With 71% of Members saying

members want to engage with their Program through athat Loyalty Programs are a meaningful part of their Brand

mix of emerging, and growing technology. Technology likerelationships, Brands that are willing to embrace the speed ofchatbots, AI, VR, wearables, and connected devices in-home willchange and adapt along the way will win.

Until now, customers have been slow to welcome cutting-edge

enable new currencies, enterprise and partnership ecosystems,and the integration of Loyalty and CX to change the Loyalty
game.

#LOYALTYREPORT | 8Findings and insights from the Loyalty Report 2018 will help you
unlock and build new strategies to prepare your Brand for a newmatrix of competition and customer experience.

A NEW PERSPECTIVE
GET MORE FROM THE LOYALTY REPORT
Contact us for more detailed report findings, to learn about purchasing the complete report,
or to schedule a full-day Engagement Workshop.
Phone: 1 844 277 2663
Email: info@bondbl.com

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Pay2Play Loyalty

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New Currencies of Loyalty

Sector Reports

THE TOP
PLAYERS IN
LOYALTY—Based on Member Satisfaction

AIRLINE
1 . JetBlue TrueBlue

2 . Sun Country Airlines Ufly

3 . Southwest Airlines Rapid Rewards

2.M arriott Rewards

3 . La Quinta Returns

2 . Smith’s Fuel Program

3 . H-E-B Points Club Rewards

2 . Rite Aid wellness+ with Plenti

3 . CVS ExtraCare

HOTEL
1 . Hilton Honors

RETAIL—GROCERY
1 . Giant Eagle fuelperks!

RETAIL—DRUG STORE
1 . Walgreens Balance Rewards#LOYALTYREPORT | 10THE TOP PLAYERS IN LOYALTYRETAIL—HEALTH & BEAUTY
1 . Sally Beauty Club

2 . ULTA Ultamate Rewards

3 . Sephora Beauty Insider

RETAIL—DEPARTMENT STORE
1 . Kohl’s Yes2You Rewards

2 . JCPenney Rewards

3 . Nordstrom Rewards

2.A merican Eagle Outfitters

3 . Foot Locker VIP Program

RETAIL—APPAREL
1 . Express NEXTAEO Connected

RETAIL—SPECIALTY
1 . Barnes & Noble Membership

MemberBARNES & NOBLE

BN.COM

2 . Cabela’s CLUB REWARDS

3 . Bed, Bath & Beyond Beyond +THE TOP PLAYERS IN LOYALTYCASUAL DINING
1 . Papa John’s Papa Rewards

2.D omino’s Pizza Piece of the

3 . Chick-Fil-A The A-List

Pie Rewards

GAS & CONVENIENCE
1 . Kroger Fuel Program

COMING SOONPAYMENT CARD PROGRAMS• Merchant Co-branded• Bank Branded Points• Bank Branded Cashback/Rebate#LOYALTYREPORT | 12

2 . Speedway Speedy Rewards

3 . Sheetz MySheetz CardGET IN THE
GAME—

It’s time to strategize your next move. We’ve navigatedthe board, know the players and see the changing
rules of engagement. We have the strategic focus andimagination to traverse your Program through theevolving Loyalty ecosystem and customer demands.
Let us arm you with your next move.
Contact us for more detailed report findings, to learn
about purchasing the complete report, or to schedulea full-day Engagement Workshop.

About Bond Brand Loyalty
Bond Brand Loyalty is a global customer engagement
agency that specializes in building Brand Loyalty for
the world’s most influential and valuable brands.
Our mission is to make marketing more rewarding
for customers, richer and more resilient for brands
and to deliver profitable business outcomes for ourclients. We build measurable, authentic and longlasting relationships through a combination of services
that includes loyalty solutions, customer experience,
marketing research, customer analytics, live brandexperiences and proprietary technology platforms.

Contact us at 1 844 277 2663

bondbrandloyalty.com

info@bondbl.com@createabond