LAUNCHEDITIONLoyalty Remastered,Renewed, Reimagined—
Loyalty Programs continue to drive results for

Brands, but everywhere we look, we’re remindedthat change is constant. New competitors, evolving
technologies and rising customer expectations are
putting Programs in flux and placing constraints
on Member satisfaction. To keep pace, Program
operators make adjustments, but those often result inthe same old story.
To create meaningful change, Loyalty needs aredux, a term from the film world that means a newinterpretation of an existing work. When we recall
the origins of Loyalty—to create differentiation andgive customers new reasons to keep coming back—
we realize that Program operators must rewrite thescript to make Loyalty even more relevant to today’s
audiences.
In the ninth year of the largest global study of its
kind, The Loyalty Report 2019 surveyed over 55,000
consumers across more than 900 Programs in
more than 20 markets. The findings will help Loyalty
marketers remaster the customer experience, renew
their sense of purpose and reimagine the ways tobuild bonds with Members.

Will your Program play a key role in the newstory of Loyalty?

“	The Loyalty Report is ouropportunity to bring theMember to the table, as
Loyalty marketers arein a perpetual race tomeet changing customer
expectations. We apply scienceand art to the thinking aroundhow we can master thecustomer experience in a waythat brings significant benefits
to Brands and Members”—	Rob Daniel
EVP, Client Leadership, Bond

The World’s Largest Study of
Loyalty, Engagement andKnown-Customer Experience—
Sample of more thanIn

AcrossConsumers

Markets

NORTH AMERICA
SOUTH AMERICAASIA PACIFICEUROPE

Examining overIn

AcrossPrograms

Industry Sectors

Attributes

55K 20+900 15+9TH

ANNUAL
STUDY

•
•
•
•
•
•
•
•

Airline•Apparel Retail
Automotive•
Big Box Retail•
Car Rental•
CPG•
Entertainment•
Quick Serve•
Restaurant & Dining

50+
Gas &
Convenience
Grocery
Health & Beauty
Hotel
InformalOnline Retail
Pharmacy… and more.

•
•
•
•
•
•
•
•
•

Loyalty Mechanics
Program Influence
Behavioral Loyalty
Emotional Loyalty
Earn Mechanics
Rewards & Redemption
Brand Alignment
Human Experiences
Digital Experiences... and more.

22K Americans provided feedback on 200+ Loyalty Programs#LOYALTYREPORT | 1

Member Satisfaction by Sector

Fast
Facts:
Memberships Continue to
Rise but not all are Active

6.7
ACTIVE

14.8

MEMBERSHIPS

What Drives Loyalty?
Top 5 Drivers ofMember Satisfaction
1

Meets needs

2

Enjoy participating

3

Makes brand experience better

50%

46%

45%

45%

44%

44%

42%

42%

41%

40%

38%

37%

Movie

Credit Cards

Gas

Grocery

AirlineDiningDrug Store

Apparel

Retail Specialty

Car Rental

Hotel

Positive Momentum
Influence of Loyalty continues to be stronger year over year.

79%

73%

66%

SAY

STAY

SPEND

“I am more likely torecommend Brands
with good Loyalty
Programs.”“Programs make memore likely to continue
doing businesswith Brands.”“I modify my Brand
spend to maximize
Loyalty benefits.”

It’s the Experience that Matters Most
Experience continues to rise and accounts for almost ¾ ofwhat drives Member engagement.

Earn & Burn
13%

13%
4

Consistent with brandexpectations

14%

12%

5

Rewards/Benefits appealing

6%

11%

6%

#LOYALTYREPORT

Cruise Line

7%

Experience

8

%

10%

13% Ease & Enjoyment
12% Brand Alignment
11% Recognition & Support
10% Personal Relevance
8% Data Usage & Trust
7% Digital
6% Meets Needs
6% Communications

Get Personal Already22%

Personalization has long been considered an importantpart of the experience yet only 2 in 10 members arevery satisfied.
Effective communication drives the level of
personalization within a program.

Very Satisfied with theLevel of Personalization

Effectiveness­—Members agree, the Program interacts with me...

25%

22%

22%

22%

…through the rightchannels…at the rightplace…at the rightmoments…with the rightmessages

8.6x

6.8x

Personalization Lift

10.1x

Personalization Lift

1.7x

Personalization Lift

7.2x

Personalization Lift

Gamification Drives Program Enjoyment
Members who engage with game mechanics enjoy participating almost twice

Enjoyment Lift whenas much. 8 in 10 members engage with these mechanics when present, but
Game Mechanics are Used only half of programs employ them today.
Higher use with Younger Members

85% Gen Z
86% Younger Millennials
83% Older Millennials
81% Gen X
75% Baby Boomers

81%of Members use
Game Mechanics
when Present

56%

of Programs Employ
Game Mechanics

Experience is the Antidote to
Declining Rewards Appeal

Appeal—The Ability to Use Points to
Pay for…
A pre-selected reward once you
accumulate required points

Decline in Impact ofRedemption
SATISFACTION

The impact of redemption
on satisfaction is on
the decline but new
redemption techniques
have the potential todrive appeal among
Members, especiallyamong Gen Z andMillennials.

1.9x

1.6x
1.6x

2017

2018

66% Airline
65% Online Travel Agency
62% Retail Health & Beauty
58% Credit Cards
49% Gas & Grocery

2019

New
Redemption
Mechanics

An upcoming purchase you intend
to make

67%

Recurring purchases

2020

69%

52%

The State of Loyalty
Loyalty continues to bring positive outcomes for

Brands, and the impact on advocacy, retention andspend (or “say, stay, spend”) remains strong.
At the same time, Programs are challenged to keep
up with rising Member expectations. As a result,
we’re seeing downward pressure on Member
satisfaction across multiple sectors of Loyalty andcredit card reward Programs. In this year’s survey,
44% of Members indicate they are very satisfied
with the program, down from 47% in 2018.
The experience continues to matter most: four ofthe five top drivers of Member satisfaction andengagement are related to the experience. While
Program operators place a heavy emphasis on
acquisition to drive Membership growth, harnessing
an understanding of what drives satisfaction andengagement with an existing Member is the bigger
opportunity. Loyalty must be grounded in retention
over acquisition, and engender a propensity for
Members to stay engaged.
To leverage the full power of Loyalty, Programs
need to work harder to improve the customer
experience, help the Brand deliver on its promise,and drive member engagement. In this report,
we examine six opportunities that will help yourProgram move the needle on key drivers and craft
your new Loyalty story for 2019.

#LOYALTYREPORT | 4“	When customer engagement
is done right, it moves theneedle in a big way for Brands.
What drives businesses are
the bonds they build with
their customers, and theexperiences are what create
those bonds.”—	Sean Claessen
EVP, Strategy & Innovation, Bond1|	Get Personal
Already

6.4x

Personalization has been an integral part of the

Loyalty conversation for years, and marketers arewell aware of the need to develop data-driven,
relevant and individualized Member experiences.
Yet, there is still a striking gap between Program
operators’ intent and action. Our study shows that
only 2 in 10 Members are very satisfied with thelevel of personalization in their Loyalty Programs.
What’s getting in the way? Brands simply aren’t
using the data they collect, or they’re not using it
effectively. That story we learned in our marketing
text books (right channels, right place, rightmoments and right messages) is not being delivered.
Successful execution can result in up to a 10x lift in
Personalization.
Compounding the challenge is that new benchmarks
keep getting set as consumers engage with gamechanging products and services. For example, on
the Uber Eats app, everything is personalized basedon user preferences, andcustomers receive multiple
real-time updates regarding
the status of their orders.

#LOYALTYREPORT | 5

LIFT IN SATISFACTION

6.0x

5.2x

SAY

STAY

3.5x
SPEND

When personalization is done well, there is a 6.4x
lift in Member satisfaction with the Program. Other
outcomes of personalization are: Members “saygood things about the brand” (6.0x lift), “staylonger” (5.2x lift) and “spend more with the brand”(3.5x lift). In addition, many of the top drivers ofMember Satisfaction are related to personalization,
including recognition and support, personal relevance,
communications, and data usage and trust.
Loyalty marketers must get serious about
personalization and close the gap between intent
and action before it becomes a chasm.

|

Brand
A New Model For
Snapshot Personalization
Hill City, Gap Inc.’s new men’s

activewear label, is a digital-firstbrand that offers a glimpse into the
future of personalization. Looking
to get feedback and build a loyal
customer base, Hill City launched the Wear Tester
program on Facebook Messenger. Once chosen,testers could talk with the brand (via chatbot),provide product feedback and get access to exclusive
products. Over time, the brand will learn enoughabout customers to make personalized suggestions.
Eric Toda, Hill City’s head of marketing, told Wired:“We want to be as one to one as humanly possible. I
think it’s the future of marketing.”

CONTACT BOND

to learn more about our deep dive research
results and custom full report options.

#LOYALTYREPORT | 6“	Personalization doesn’t need tobe complex. Loyalty marketers
just need to do it and not let
striving for perfection get in theway of getting started.”—	Scott Robinson
VP, Design & Strategy, Bond

2|

Unlock the Power ofPartnerships

There’s been a flurry of partnership activity in the

US over the past 12 to 18 months, with Brands andPrograms like Marathon Fuel and Southwest Airlines,
BP and United Airlines, JetBlue and Lyft, and Hertz
and CLEAR. That has left many Program operators
contemplating if they too need a Loyalty partner, or ifthey have one already, how to make the partnershipwork more strategically.

“	There is strong consumer
appetite among Members
for Loyalty partnerships,
but Operators must design
diligently since a poorly
conceived partnership canbe detrimental. Additionally,
Program operators shouldlook to experience-based
components to capture whitespace and differentiate.”—	Kyle WestManaging Director, Global Insights, Bond

Traditionally, Partnership models tend to be acollection of earn-and-burn mechanics: the ability
to earn faster, earn in more places, and receive
discounts at partners. However, with earn-andburn elements comprising just one-quarter of what
drives overall Member Satisfaction and threequarters related to the experience, there is morepotential to unlock.

Our survey shows there is consumer appetite forpartner models:

60%#LOYALTYREPORT | 7

are interested inpartnerships

Loyalty partners should take advantage ofexperience-based components such as a more
personalized experience, reciprocal status with eachbrand, and a better customer experience to drive
appeal upwards even further.

CONTACT BOND

to learn more about our partnership assessment,
value exchange design and ROI tools & workshops.

3|	Remake theRedemption Experience

Rewards still matter to Members and redemptions

continue to have positive impacts for Programs.
Across our study, 84% of all Members have maderedemptions, and there is a 1.6x lift in satisfaction
among redeemers versus non-redeemers.
However, the impactof redemption on
satisfaction is on the
decline.

84%

Two factors areof Members
have madeputting pressure
redemptions
on the appeal ofrewards catalogs.
First, Amazon
ensures consumers can get virtually any productfrom anywhere on the planet, delivered the same
day or next day, and this immediacy has set a
standard in the delivery experience that traditional
rewards catalogs haven't kept up with. Secondly,
rewards catalogs across Programs have little to nodifferentiation — a toaster is a toaster, is a toaster.

CONTACT BOND

to learn more about our full body of knowledge inrewards and redemption including: satisfaction lift
among redeemers vs. non-redeemers across all
sectors; satisfaction lift on the top earn-and-burndrivers; and points balance and redemption values.

#LOYALTYREPORT | 8

Brands must evolve their Programs by focusing on
the redemption experience, not just on the reward.
Some key considerations are:

✓ Time to earn rewards;✓ Level of effort to earn a redemption;✓ Ease of the redemption process; and✓ Time to receive redeemed rewards.

By focusing on the experience, Program operators
can get more out of their rewards strategy withredemption mechanics that reimagine the traditional
reward for today's consumer who expects the
program will anticipate, fulfill, and even refill theredemption with immediacy, simplicity, and ease.

4|	Gamification: It’s Back(well, it never really went away)

While many Loyalty marketers dismiss gamification
as a fad, it’s worth a second look. In our study,“enjoys participating” is the number-two driver ofMember Satisfaction, and gamification emerges as a
powerful way to level-up enjoyment. Members who
engage with game mechanics enjoy participating
in a Program nearly twice as much as those who
don’t, and there is a 1.7x enjoyment lift when gamemechanics are used.
By definition, gamification applies elements ofgame design to non-game contexts. In Loyalty
Programs, game mechanics include status and tiers,
levelling-up and unlocks, missions and challenges,
goal setting, progress feedback, and more. The
premise is that all of the elements that make games
so enjoyable have the potential to make Loyalty
Programs highly engaging as well.

Here are two examples of effective gamemechanics at work in the Loyalty space:• Virgin Red is a highly gamified Loyalty Program
featuring mechanics such as
virtual treasure hunts, vaults
that can be unlocked forprizes, and daily “this or that”
quizzes to earn extra points.
What is the consumer interest of gamification? In
our study, over half (53%) of Members say they
are interested in using game mechanics. Half ofPrograms employ game mechanics, and 81% ofMembers engage with game mechanics when they
are present.

53%

of Members say they
are interested in using
game mechanics• Starbucks Rewards has multiple tiers basedon spend, tracks Members’ status and reward
progress, offers purchase incentives, and featureschallenges such as making a certain number ofpurchases in one week toachieve bonus stars.

#LOYALTYREPORT | 9

Think about how to apply gamification to meet yourbusiness objectives and calculate the dividends onimportant metrics in your scorecard. Is it time foryour Program to get in the game?

5|	Rethink Strategies For Gen Z& Young Millennials

As Loyalty marketers look to the future, engaging

the next generation of consumers should be a toppriority. Unlike their parents, Gen Z, and young
millennials are Loyalty natives: they’ve been
Members of Programs ever since they’ve been
consumers. They’re highly influenced by Loyalty
Programs (62% Gen Z and 67% Young Millennials);
however, they’re less satisfied with programs overall.

Program Influence(Advocacy, Spend, Brand Choice)
62%
67%

Program Satisfaction% Very Satisfied

41%
44%
Gen Z (18-23)

Younger Milennials (24-29)

The top drivers of Satisfaction for younger
consumers are the same as total Americans:meets needs, enjoys participating, and makes theexperience better. However, they care more about
the Program experience than other cohorts.
Young consumers are more willing to share
information with the Brands they engage with.
Gen Z and younger millennials are 20% more
comfortable than the average American with theinformation Programs collect about them.
When it comes to communications, it’s no surprise thatyoung consumers prefer social, mobile and instantmessage. But you may be surprised by how much

#LOYALTYREPORT | 10

they over-index. Compared to the American average,
Gen Z over-indexes on social media by 48%, mobile
app by 27% and instant message by 23%.
Brands considering the addition of paid tiers to their
Loyalty Program will be making the right move with
the next generation. Even though young consumers
are at beginning of their earning potential, they’realready indicating they’re willing to pay a fee toreceive enhanced benefits.
Gen Z and younger millennials are also beginning tochange the payments ecosystem, and they’ll expect
a digital experience wherever they go. Our study
shows that younger consumers are much more likely
to save their card on file or in a digital wallet thanolder consumers.

“	Payments are not keeping
up with Gen Z and Young
Millennials. I use my phone
to pay for everything and I’ll
bring my wallet just in case themerchant doesn’t accept tap
or if my purchase exceeds thelimit. So, if you’re still working on
designing your plastic, you’ve
missed the boat with me.”—	Alie Donnelly
Senior Research Manager, Bond

6|

	Reimagine Loyalty
Across the Member Journey

The lines between the Brand, the Program andthe product are increasingly blurring. Today, theProgram is a key part of the Member’s relationshipwith the Brand, and in cases like Amazon Prime, theprogram is the Brand. The way in which a Prime
Member experiences the Brand is only through theProgram.
As the Brand and the Program have become moreintertwined, a new principle has emerged. The roleof the Program is to be an extension of the Brand, tomake the Brand experience better, and to help the
Brand deliver on its promise.
It’s not easy to keep pace with this evolution, andBrands have some catching up to do. In our study,
only 32% of Members strongly agree the Program
makes their Brand experience better.
To solve for this, here are the questions we pose to
Program operators: What are the moments thatmatter most across the Member journey, and whatrole can Loyalty mechanics play to improve theMember experience? With Member engagement
mapping, we can look beyond the point of purchaseto the entire experience ribbon, and consider what
new Loyalty currencies can be introduced at every
touchpoint.
New currencies—a concept we introduced in lastyear’s Loyalty Report—are perks and benefits thatare created by repurposing and monetizing existing
assets customers find valuable. They deliver on
specific needs such as time saving, convenience, brain
space, confidence, and a sense of meaning.
Across the experience ribbon, look for the momentsthat matter most to your customers and solve pain

#LOYALTYREPORT | 11

points with new currencies. For example, a travelfocused credit card might do a great job at letting
Members pay for a flight with points or more quickly
get through security. What about the moments thataren’t being fulfilled by the Program, like checking inand boarding the plane?
Companies outside the Loyalty space are alreadysolving for pain paints in travel. For example,
new technologies have been introduced, suchas permanent electronic bag tags that allow
passengers to enter their flight details online, skip
the airport check-in process, and drop their luggage
off at designated spots. A travel credit card could
certainly do this work, improving the Member
experience and engendering Loyalty to the Brand.
In any sector, Brands that can meet real humanneeds along the entire experience ribbon will create
meaningful differentiation.

9.2x

LIFT IN SATISFACTION

7.3x

10.4x

SAY

STAY

6.8x
SPEND

when Programs make theexperience with the Brand better
LEARN MORE

about Bond’s Engagement Mapping approachto build a better journey and identify thehuman and digital touchpoints that provide thegreatest business returns for your Brand.

Leaders in Loyalty
Airline1 . Alaska Airlines Mileage Plan

Hotel

1 . Hilton Honors

Retail — Grocery
1 . Smith's Fuel Program

Retail — Drug Store
1 . Walgreens Balance Rewards

Retail — Health & Beauty
1 . Sally Beauty Rewards#LOYALTYREPORT | 12

2 . Korean Air SKYPASS

3 . JetBlue TrueBlue

2 . L a Quinta Returns

3 . MGM M Life Rewards

2 . Hy-Vee Fuel Saver + Perks

3 . SE Grocers rewards

2 . CVS ExtraCare

3 . Rite Aid wellness+

2 . My Bath & Body Works Rewards

3 . M.A.C SelectLeaders In Loyalty

Retail — Department
1 . Kohl's YES2YOU Rewards

Retail — Apparel

1 . The Children's Place My Place Rewards

2 . Nordstrom The Nordy Club3 . JCPenney Rewards

2 . A merican Eagle Outfitters

3 . DSW VIP

2 . PetSmart Treats

3 . REI Membership

2 . Chick-Fil-A One

3 . P apa John's Papa Rewards

2 . Shell Fuel Rewards Program

3.M
 APCO MY Reward$

AEO Connected

Retail — Specialty
1 . Bed, Bath & Beyond Beyond +Casual Dining

1 . Domino's Piece of the Pie Rewards

Gas & Convenience
1 . Cumberland Farms SmartPay#LOYALTYREPORT | 13

Get more from the
Loyalty Report
Contact us for more detailed report findings, tolearn about purchasing the complete report, or toschedule a full-day Engagement Workshop.
Phone: 1 844 277 2663
Email: info@bondbl.com

Look for future reportson the following topics:
Click on the icons below to reserve a copy.

DESIGNING FOR NEW
EXPERIENCE EXPECTATIONS

THE #TRAVELOYALTYPLAYBOOKPERSONALIZATIONIN PAYMENT#LOYALTYREPORT | 14

YOUNG MEMBERS AND
MODERN LOYALTYRENOVATING REWARDS:
THE UNCATALOGAbout Bond
Bond is a global customer experience marketing,management and measurement company
that specializes in building brand loyalty for theworld’s most influential and valuable brands. Our
mission is to make marketing more rewarding forcustomers, richer and more resilient for brands,
and to deliver profitable business outcomes forour clients. We build measurable, authentic, andlong-lasting relationships through a combinationof services that includes loyalty solutions,customer experience, marketing research,customer analytics, live brand experiences,and proprietary technology platforms. Visit our
website, follow us on LinkedIn and Twitter, or
contact us at 1-844-277-2663.

#LOYALTYREPORT | 15

Contact us at 1 844 277 2663
bondbrandloyalty.com

info@bondbl.com@createabond