When looking at the SMB marketing mix, there are several flavors and formats – some longstanding (local search) and some newer (TikTok). In the former camp is loyalty and rewards programs. This can be everything from punch cards for achievement rewards to apps that help you store and redeem points.
These apps have gotten increasingly gamified and sophisticated over the years. And in some cases, apps will do the heavy lifting for you, such as web 2.0 darlings like Foursquare. Other apps white label loyalty programs, while POS players like Square and Clover bake loyalty features into their core offering.
Beyond those basics, what’s the health of the broader loyalty/rewards realm, especially as the marketing mix continues to get flooded with options for SMBs? With the rise of social formats like TikTok, Instagram Reels and others, are SMBs still engaged in loyalty programs? And how do consumers view them?
Spending Empowered
eMarketer recently answered some of these questions. Citing Merkle’s 2024 Loyalty Barometer Report, it breaks down consumer sentiments on loyalty – the good the bad, and the ugly. For the sake of focus, we’ll break down one of the findings: What aspects of loyalty programs do consumers not like?
Leading the way on that measure was that consumers feel that it takes too long to earn rewards (42 percent of respondents). That’s followed by difficulty in earning rewards (27 percent), lack of value in the rewards (20 percent), and too many communications – such as email – from the business (20 percent).
Some of these results stand to reason, such as the commanding lead for the top sentiment – rewards take too long to achieve. This could be reflective of waning patience levels among younger generations, especially the increasingly spending-empowered generation Z. Check out the rest of the results below.
Join the Party
One of the reasons this is important is to determine where loyalty programs sit in the SMB marketing mix. As noted, it may be diminished these days, given the abundance of emerging marketing formats vying for SMB mindshare. And loyalty programs carry a sort of old-school vibe, regardless of their efficacy.
But despite all that, one macro factor may provide tailwinds for loyalty programs: privacy reform. Given the work done to shut down behavioral targeting and third-party data use, loyalty programs could be one of those things – along with retail media and contextual advertising – that are privacy-friendly.
That’s mostly due to their first-party orientation. All the data being collected about a given individual is being used internally for targeted messaging with and by a given SMB. Their past purchase behavior and other key details are all used in a first-party way… and that’s the name of the game these days.
