Loyalty miles important to consumers

by: Nichole Gunn April 4, 2012

New data analysis from Billeo, a company that helps consumers save money and time while shopping and paying bills online, reveals that customer reward programs and other loyalty initiatives can go a long way in garnering the attention of online shoppers.

The Billeo report reveals what rewards and incentives consumers want most, and loyalty miles and other offers like free shipping are popular among consumers. Billeo's findings indicate the rewards provided through a loyalty program have a direct impact on where individuals shop and what brands they choose as well as what card they use to make purchases.

"Miles, free shipping or points - the options for online shoppers are many," said Murali Subbarao, CEO of Billeo. "And still, the majority of these offers go unused. Online shopping presents a huge opportunity for brands and merchants looking to increase customer loyalty and financial institutions that need to drive card use. The marketing professionals who run loyalty programs just need better insight into what shoppers prefer."

Billeo's network of shoppers revealed that they prefer miles to any other form of reward, and the same online shoppers were five times more likely to use a rewards offer that provided the ability to earn miles or points as opposed to ones that don't.

"Our analysis shows that online shoppers are almost six times more likely to use an offer that includes miles, compared to one that does not, " Subbarao added. "The rising cost of airfare has turned earning miles into a significant motivator for consumers who are shopping online."

The findings also include that consumers prefer offers that allow online shoppers to earn rewards miles or points and average a 14.5 percent click-to-conversion rate. In contrast, offers that do not include miles or points are less appealing. Free shipping is an example of this and represents a click-to-conversion rate average of only 3 percent.

Not all loyalty and incentive programs are effective. CtW Investment Group recently voiced concerns over Rite Aid's Wellness+ program. The investment group voiced concerns over whether management is providing adequate information to shareholders concerning the program's performance.


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