we need to get a sense of who our survey respondents are. Q: How long have you been directly or indirectly involved with loyalty marketing? Years spent in loyalty marketing! Less than 2 years (47%)! 2-5 years (43%)! 6-10 years (3%)! More than 10 years (7%)!   2   . along with detailed explanations (and our interpreted learnings) of the results. Below is the complete set of survey questions and responses. Our respondents included many newcomers in the loyalty space. and 7% have worked in the loyalty industry for over 10 years. Enjoy! Get to know the respondents Before diving into the tough questions. and implement loyalty in the digital age. Over the last five months. The 2-5 year group was a close second and made up 43% of our respondents. In order for us to maximize the lessons learned from speaking with a diverse group. Grab a cup of coffee and settle in to learn how marketers approached loyalty in 2014. with 47% having spent less than two years working in loyalty. we’ve surveyed marketers across a variety of industries about their unique approaches to building loyalty to get a better sense of the landscape for you. there is still plenty of research to be done around how marketers strategize. it’s imperative to understand levels of experience and industry. Marketers who spent 6-10 years in loyalty made up 3% of respondents. prioritize. the BigDoor community. 2014 has been a big year for loyalty marketers. Although building customer loyalty is not a new idea. Loyalty marketing is on the rise across the board as brands in all verticals begin strategizing and implementing programs to thank their customers and to keep them coming back.October 30. 2014 Welcome to BigDoor’s 2014 Loyalty Marketers Survey results! From multi-million dollar program launches to doubling down on loyalty initiatives at all stages of business.

Q: If yes. Although the response of marketers without a loyalty program was large. The majority of respondents (66%) had programs that were less than a year old. it’s safe to say that they all help drive customer loyalty based on additional responses. but may not call their tools and processes “loyalty programs. they were then asked about program length.” Other marketers are just getting their feet wet in loyalty. Q: Does your business currently have a loyalty program? Respondents with loyalty programs! No (67%)! Yes (33%)! If respondents answered “yes” to the question above. and programs that have been able to shift with the changes in digital loyalty have a lot to teach us. Although it was expected that most loyalty marketers surveyed would have fairly new programs. an overwhelming percentage of respondents (67%) did not. it was not surprising. Although respondents did not all have fully-formed loyalty programs within their brands. how long has your program been up and running? Program length! Less than a year (66%)! 1-3 years (14%)! 4-8 years (10%)! More than 8 years (10%) !   3   . with the remaining respondents being closely split across 1-3 years old (14%). and more than eight years old (10%). Loyalty programs have changed tremendously over the last decade.When asked whether their business currently had a loyalty program. 4-8 years old (10%). Many brands participate in loyalty initiatives. and it’s not uncommon to find brands that have dabbled in loyalty in the past in between programs. the fact that a solid 10% of respondents work on programs that have existed for over eight years was a nice surprise.

Our survey respondents came from a wide variety of industries. loyalty personnel/management budget. Not all loyalty programs are created equal. should have some insight into how much their brand is spending on loyalty each year. Annual budgets Budgets for loyalty programs differ tremendously. The results were quite fascinating: A whopping 43% of marketers answered “I’m not sure” when it came to their company’s annual budget for a loyalty. In order to cover all the bases. 27% of respondents answered that their brands spend less than $10k per year on loyalty tools and 17% spend between $10-15k.   4   . Loyalty is typically considered a marketing-related objective. we gave respondents a wide set of options to choose from when it came to budget size. let’s move on to questions regarding the programs themselves. A significant percentage of marketers stated that their brands spend into the six figures on loyalty per year. with 3% spending $50-100k and 10% spending over $500k annually. platform. Online publishers and Telecommunications brands rounded the survey out. There are three main budgets that make a successful loyalty program function: loyalty platform/tool/software budget. regardless of job title. even across companies of similar size and industry. Retail was the second largest (23%) followed closely by Restaurant/Dining (13%). and rewards budget. and marketers. which was one of the most surprising results of our survey. Q: What industry is your company in? Industry! Other (58%) ! Retail (23%) ! Restaurant/Dining (13%) ! Online publisher (3%) ! Telecommunications (3%) ! Now that we have a good idea of who are respondents are. with both coming in at 3% of the total people surveyed. and/or tools. and the same goes for size of budget. with a mixed group of “Other” being the largest surveyed group at 58%. software.

so we got insight from our marketers around how much today’s brands budget for rewards. with 23% of respondents stating their brand spends less than $10k a year on management. an overwhelming majority of respondents (47%) stated they were not sure how much their brand budgets each year for rewards that support their   5   .Q: What is your company’s annual budget for a loyalty platform. Again. and 7% work for brands who spend over $500k on management annually (likely teams solely dedicated to driving loyalty). 4% work for brads who spend $100-500k annually. and/or tools? Annual loyalty platform/tool/software budget ! $100k to $500k! $50k to $100k! More than $500k! $10k to $50k! Less than $10k! I'm not sure! 0%! 5%! 10%! 15%! 20%! 25%! 30%! 35%! 40%! 45%! 50%! When asked about annual budget for personnel/management. Q: What is your company’s annual budget for loyalty personnel or management? Annual loyalty personnel/management budget! $100k to $500k! More than $500k! $10k to $50k! $50k to $100k! Less than $10k! I'm not sure! 0%! 5%! 10%! 15%! 20%! 25%! 30%! 35%! 40%! 45%! 50%! Loyalty programs depend on rewards that support them. A solid 13% of respondents work for brands who spend $50-100k annually on loyalty personnel (likely 1-2 employees per brand). the overwhelming percentage of marketers (43%) were still unsure about how much their brand internally budgets to run their program. software.

size of marketing team. Check out how all nine categories were prioritized by survey respondents below:   6   . with one star indicating “Not a priority. two. and deepening customer engagement (53%). Although the objectives may look similar across brands of different sizes and verticals. We dug into what drives marketers programs and found trends across the most common objectives for marketers tasked with driving loyalty. etc. and 30% spend less than $10k annually. and 7% spend more than $500k. In this part of our survey. The two groups of marketers who spend both $10-50k and $100-500k both accounted for 3% of our respondents. increasing the value of a customer (53%). size of community and/or customer base. marketers have a slew of objectives when it comes to driving customer loyalty. Q: What is your company’s annual budget for the rewards needed to keep your loyalty program up and running? Annual rewards budget! $100k to $500k! More than $500k! $10k to $50k! $50k to $100k! Less than $10k! I'm not sure! 0%! 5%! 10%! 15%! 20%! 25%! 30%! 35%! 40%! 45%! 50%! Loyalty objectives & priorities From budget and buy-in to engagement and advocacy. the priority level of each objective varies drastically depending on overall company objectives.” two stars indicating “Somewhat a priority.programs. or three stars.” and three stars indicating “A top priority. 10% of respondents spend $50-100k annually on rewards. types of rewards offered.” The results showed that. age of the loyalty program. the top three most important objectives for respondents included increasing customer retention (64%). marketers were asked to rank the following objectives with one. of the nine main categories we included in the survey.

Q: What are you trying to accomplish with your loyalty program and loyalty marketing efforts? Please rank the following business goals by priority. Priority levels of loyalty program objectives Increase  Customer  Retention   Not  a  priority  (3%)   Somewhat  a  priority  (33%)   A  top  priority  (64%)   Deepen  Customer  Engagement   Not  a  priority  (3%)   Somewhat  a  priority  (43%)   A  top  priority  (53%)     Increase  Conversion  Rates   Not  a  priority  (17%)     Somewhat  a  priority  (37%)   A  top  priority  (46%)   Increase  Value  of  a  Customer   Not  a  priority  (7%)     Somewhat  a  priority  (40%)     A  top  priority  (53%)     Thank/Reward  Customers   Not  a  priority  (10%)   Somewhat  a  priority  (40%)   A  top  priority  (50%)   Encourage  Social  Advocacy   Not  a  priority  (17%)     Somewhat  a  priority  (37%)     A  top  priority  (46%)     7   .

Loyal customers are ultimately the end goal. followed by   8   . there are many engagement points that all brands focus on to measure results. 30% of marketers responded that it was very successful. measurable. Loyalty program success Measuring loyalty is hard. Let’s start with general program success. the road to building a large loyal following is paved with a variety of specific initiatives that are trackable. A strong 50% of respondents said their current programs were somewhat successful in hitting their goals. but as you can see. in one way or another. tools. we aren’t going to pretend otherwise. To get an idea of how happy marketers are with their current programs.Collect  Customer  Feedback   Drive  Social  Referrals   Not  a  priority  (17%)   Somewhat  a  priority  (40%)   A  top  priority  (43%)   Not  a  priority  (20%)   Somewhat  a  priority  (40%)   A  top  priority  (40%)   Grow  CRM   Not  a  priority  (17%)   Somewhat  a  priority  (46%)   A  top  priority  (37%)   Priorities may differ across brands. leverage loyalty initiatives to help drive their brand closer to the nine goals above. and iterated on. we asked two high-level questions to gauge confidence in their current programs and data to support their success. When asked how successful their current program was in hitting company goals. but the biggest takeaway from this piece of the survey is that most marketers. data. and accessibility available to today’s marketers. Although brands measure program success differently based on their goals. But what about program success? Are today’s marketers happy with the results their loyalty programs drive? Let’s move along to the next section to find out. But measuring success is getting easier thanks to new formulas.

However. To get a sense of how happy marketers are with their current loyalty program data. However. we asked about data confidence. making sense of that data in an easy-to-digest and implement manner can be easier said than done. Q: How confident are you in the data you user to measure success? Confidence in current loyalty program data! 50%! 45%! 40%! 35%! 30%! 25%! 20%! 15%! 10%! 5%! 0%! Not confident !   Somewhat confident ! Very confident ! 9   . data is abundant. over half of our respondents were either “Somewhat confident” (30%) or “Not confident” (27%) with their current program’s data.20% of respondents answering that their programs were not successful. Q: How successful is your current program in hitting your company goals? Success of current loyalty program! 60%! 50%! 40%! 30%! 20%! 10%! 0%! Not successful! Somewhat successful ! Very successful ! When it comes to measuring loyalty. It was encouraging to see 43% of respondents answer “Very confident” when it came to their current program’s data.

disconnected. In our survey. or three stars. Take a look at how all nine categories were ranked by survey respondents below: Q: What are your biggest challenges in launching a loyalty program or campaign? Please rank the following challenges by severity. and measuring incrementality (43%). the top three most severe challenges for respondents included offering enticing rewards (50%).” two stars indicating “Somewhat a challenge. of the nine main categories we included in the survey. marketers were asked to rank the following challenges with one. and iterating on a loyalty program. Severity of loyalty program challenges Offering  Enticing  Rewards   Not  a  challenge  (17%)   Somewhat  of  a  challenge  (33%)     A  top  challenge  (50%)   Measuring  ROI   Not  a  challenge  (7%)   Somewhat  of  a  challenge  (50%)   A  top  challenge  (43%)   10   .” and three stars indicating “A top challenge. two. In this part of our survey. time-constrained data are clearly still out there. we dug into the biggest challenges are marketers face when they’re tasked with creating. Loyalty program challenges Loyalty programs are complex. with one star indicating “Not a challenge. whether throughout our community or when working with clients. and marketers can face a slew of obstacles to overcome before they’re able to maintain and iterate on a positive program. measuring ROI (43%). Marketers relying on loyalty programs based on fragmented.” The results showed that. to be exact) were not completely confident in their loyalty program data shows an incredible amount of room for improvement in the world of loyalty programs. We’re always curious about what hurdles today’s marketers face when it comes to loyalty so that we can tackle the issues up front.The fact that so many respondents (57%. implementing.

Executive  Buy-­‐In   Measuring  Incrementality   Not  a  challenge  (17%)   Somewhat  of  a  challenge  (40%)   A  top  challenge  (43%)   Not  a  challenge  (17%)   Somewhat  of  a  challenge  (43%)   Financial  Liability   Infrastructure  Challenges   Not  a  challenge  (26%)   Somewhat  of  a  challenge  (37%)   A  top  challenge  (37%)   Offering  On-­‐Brand  Rewards   Not  a  challenge  (23%)   Somewhat  of  a  challenge  (47%)   A  top  challenge  (30%)   A  top  challenge  (40%)   Not  a  challenge  (26%)   Somewhat  of  a  challenge  (37%)   A  top  challenge  (37%)   Separate  Customer  Databases   Not  a  challenge  (40%)   Somewhat  of  a  challenge  (30%)   A  top  challenge  (30%)   Fragmented  User  Experience   Not  a  challenge  (33%)   Somewhat  of  a  challenge  (37%)   A  top  challenge  (30%)   The most interesting learning from the data above is that many marketers are split quite evenly when it comes to the loyalty program challenges they face. In over half of the challenges. marketers seem   11   .

how seriously the challenges affect brands will likely differ from company to company. Wrapping it up There you have it. being high on their priority list. folks. and marketers of all experience levels and brand sizes are now being tasked with driving loyalty across a variety of platforms. although we’ve learned quite a bit about the challenges marketers face in building loyalty. Program pricing It’s no secret that loyalty programs range in price. These results show that. it’s safe to conclude that the majority of marketers want to pay for results. but what about pricing structure? We wanted to get to the heart of what marketers prefer when it comes to setting up program pricing. When loyalty programs gain members and those members begin increasing the amount of actions taken within the program to help drive overall activity. Although the end goal may be the same.” Only 17% of respondents selected “Flat rate pricing” as their preferred structure. an even 37% of respondents answered “Variable based on number of actions taken in loyalty program” and “Variable based on number of loyalty members. and may even change drastically within the program itself over time. the way marketers measure loyalty and   12   . Q: What pricing structure would you prefer from your loyalty program vendor? Preference in program pricing structure! 40%! 35%! 30%! 25%! 20%! 15%! 10%! 5%! 0%! Variable based on # of actions taken in loyalty program (program activity) ! Variable based on # of loyalty members (size of program) ! Flat rate pricing! From the data above. marketers are willing to pay more than they would for flat rate pricing. When asked about their preference in pricing structure.to be well within a common split between the challenge having no merit vs. The landscape of loyalty has shifted dramatically over the last five years.

In 2015. online publishers. this year’s report revealed an interesting trend in the challenges loyalty marketers face. Lastly. this tactic is not scalable.the challenges they face have never been more different. In our view. especially those new to the scene. Next year. the largest group of respondents (58%) classified their industry as “Other. Loyalty becomes increasingly important for brands across all industries. Today’s marketers have a neverending amount of tools. Loyalty challenges will become more specific. We predict that. as more and more customers across all verticals engage with and purchase from their favorite brands online. As a result. the loyalty landscape will see a shift away from programs and loyalty providers that offer disjointed dashboards and difficult to understand reports toward programs and providers that offer easy-to-access data that can be acted on immediately. The fact that over half of our respondents felt this way about their program data is problematic. 57% of respondents were not completely confident in their loyalty program data. we’ll see a rise in loyalty providers who focus on addressing specific loyalty challenges rather than saying they fix “all” of the loyalty challenges.   13   . and loyalty is no exception. and shows that marketers are focused on tackling a large number of priorities all at once. Out of the nine challenges presented to respondents. brands focused on loyalty have increased across all verticals. formulas. These results are indicative of confusion about what is most important in loyalty. the industry that primarily focused on loyalty was retail. there are three big trends we see carrying over into 2015: 1. After taking a look back through survey results. Looking back at the survey data. and we don’t see marketers accepting sub-par program data for too much longer. and the hurdles and challenges loyalty marketers face will become more streamlined and easier to locate and solve as time goes on. Marketing as a whole is becoming more data-driven. 2. and long gone are the days where it was acceptable to make marketing decisions based on a gut feeling.com. Strong.” In the loyalty world of yesteryear. and others soar. there’s been a significant increase of industries who were not traditionally focused on loyalty to adopt cutting-edge loyalty programs. 3. in 2015. Thanks for joining us on this journey through loyalty marketing in 2014. As you can see in the first section of the survey. and reporting capabilities to leverage data to make decisions. The BigDoor team is thrilled to see what next year holds! Questions and/or comments on the survey? Contact Ashley@BigDoor. reliable data is key to success. over half of them saw almost even splits between levels of severity. we’ll see the number of loyalty programs offered by telecommunications. However.