The 3 Motivations of Loyalty. Where’s the opportunity?

It has been and will continue to be a quest of mine to understand what motivates consumers to connect with brands.

In ‘for love or money 2016’ this was explored further to uncover the motivations of why consumers join loyalty programs.

From the research we identified the 3 Motivations of Loyalty:

1. Convenience Loyalty = “I purchase from the brand/business anyway, so I might as well be rewarded”
2. Transactional Loyalty = “The benefits and rewards offered are worthwhile”
3. Emotional Loyalty = “I love the brand and its products or services”

Now here’s the insight!

We then quantified these motivations and found the following:

55% were motivated by Convenience Loyalty = “I purchase from the brand/business anyway, so I might as well be rewarded”
34% were motivated by Transactional Loyalty = “The benefits and rewards offered are worthwhile”
10% were motivated by Emotional Loyalty = “I love the brand and its products or services”

So what does this mean and where’s the opportunity?

Brands and businesses now have a benchmark to understand the Impact, Challenge and the Actions to take to move their members Motivation of Loyalty from Convenience to Transactional to Emotional.

As an example: If 55% of your members “purchase from your brand/business anyway so might as well be rewarded”, then:

Impact: Your program is rewarding customers who are already shopping with your business/brand

Challenge: You are rewarding an existing behavior (often seen as giving away margin to customers you already have). That’s ok, however If you have too many members of your program driven by this motivation (55% of them based on the research), then your Return on Loyalty will be impacted. Members in your program motivated by Convenience are open to competitor offers as well as any option that is “easier”.

Action: Move them from Convenience to Transactional Loyalty (so that they find the benefits worthwhile) and even better to Emotional Loyalty. Clearly the fun begins when you work out how to do this…

(A similar Impact: Challenge: Action formula has been developed for Transactional Loyalty and Emotional Loyalty)

Knowing where your members sit within the 3 Motivations of Loyalty and more importantly – how many, gives you the opportunity to assess the Impact; Challenge and Actions to take for each Motivation of Loyalty.

More insights on the 3 Motivations of Loyalty are available in our ‘for love or money 2016’ research or if you would like to discuss these in more depth, then please contact adam@directivity.com.au

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