Local Trends in Loyalty Management Systems

In the loyalty sector, it’s certainly not a one size fits all. There are many different factors that can impact consumer behaviour — whether it’s age, gender, race, income or education — all buyers have different wants and needs.

Alongside the increasingly diverse nature of contemporary e-commerce, makes it exceedingly difficult for brands to satisfy and maintain consumer bases.

However, breaking down classifications through geographic market segmentation can help retailers pinpoint their target market effectively. Because consumers in regional areas have different demands and cultural characteristics that can be specifically targeted, geographic segmentation is vital, especially for companies that serve a large global market.

Failure to acknowledge this often leads to brands wasting precious time and money on ineffective and irrelevant loyalty systems, outlined by the fact that 85% of new retail rewards schemes fail due to poor market segmentation (Active Marketing).

This is something we at BitRewards recognise with diligence, keeping us flexible enough to operate both locally and globally. Exploration of the different localised tendencies of rewards programmes provides a fascinating insight into the diverse world of loyalty, so let’s delve in.

US vs Canada

The loyalty market is highly saturated across the US and Canada, with 9 out of 10 consumers participating in rewards schemes. However, what works in the US doesn’t necessarily work in Canada.

It can be argued that Canadians are more frustrated with the time it takes to earn rewards, holding a heightened alertness to the expiration of loyalty points. Just last year, Canadian loyalty powerhouse LoyaltyOne made changes to their policies as a result of the government making it illegal for unused loyalty points to expire, suggesting Canadians favour a more flexible approach. Just for the record, BIT tokens, unlike points, don’t expire; they cannot be lost or cease to exist — they are indefinite.

In a recent study conducted by Accenture, they uncovered that 41% of US consumers ditched a company because of poor personalization and lack of trust. This suggests that providing Americans with fully customized offers and perks will be the key to achieving satisfaction and maintaining customers.

In addition, portraying a company as being established, trustworthy and proven is likely to pay dividends in the US. This is usually done through echoing positive customer reviews either on websites or social media, to establish a positive reputation and reassure customers of the proficiency of a brand.

In the same study, it was discovered that 51% of US consumers are loyal to brands that interact with them through their preferred channels of communication. As a result, US loyalty programmes have implemented omnichannel marketing, providing customers with true continuity across brands, formats and devices to enhance the purchase and post-purchase experience.

Data collection techniques and smart algorithms behind these systems help to utilize personalization, allowing brands to reach their customers through their favoured medium.

UK vs UAE

A staggering 83% of UK consumers are members of loyalty programmes. Due to the proliferation of digital technologies, accessibility to these programmes is heightened, enabling a range of socio-economic statuses to gain memberships.

In contrast, United Arab Emirates (UAE) loyalty systems are mostly used by affluent customers. According to Collison Group, there has been a stark rise in rewards scheme memberships among the UAE middle class since 2014, with higher earners tending to engage more. This infers that rewards systems operating in the UAE should be tailored for a higher-class market, utilizing up-selling strategies and product recommendations.

Alongside a rise in membership in the UAE, the research shows a significant uplift in those who agree they are an engaged member of a loyalty programme — rising from 44% in 2014, to 65% in 2016. This significant jump demonstrates how brands in the UAE are effectively motivating positive behaviour among consumers, generating positive online reputations in the process.

Perhaps this concept is lost within the UK market, with an Accenture study showing that only 12% of UK consumers publically endorse or defend a brand on social media. This has led to various loyalty programmes in the UK ignoring social media advocacy, focussing more on personalization and predictive analytics. Arguably, implementing a system (possibly BitRewards’ Referral Tool) to spark social media conversation will yield unparalleled benefits for UK loyalty programmes.

Clearly, data protection is very important for UK consumers, with a survey discovering that 53% listed a company falling victim to a data breach as a reason for breaking up with a brand. This accentuates the notion that UK loyalty programmes should have tight encryption and safeguarding in place in order to secure consumer data and satisfy a conscious customer base.

Geographical location, culture and customs have a massive impact upon loyalty systems and the methods they use. Segmenting markets regionally and knowing which methods work best where is highly advantageous. At BitRewards, we do just this, providing a flexible yet sustained motivational marketing platform suitable for a range of different localities.


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