It’s been a year of massive change in the New Zealand loyalty marketing space, with both AA Smartfuel and FlyBuys ending, Woolworths’ EveryDay Rewards launch, Cashpoints announced, and an evolution of New World Clubcard.

We often hear Consumer Magazine bagging the value of loyalty programmes for consumers; earlier this year their website used phrases such as “smoke and mirrors”, “lack of genuine savings”, “power of data collection” and quoted an un-named source at Loyalty NZ reflecting on the “picture that can be painted from data about your….shopping habits is astounding”.

But what do Kiwis actually think about loyalty and rewards programmes? How does it actually impact their behaviour? Can a business drive greater margin and revenue with a loyalty programme?

In partnership with specialist research agency Yabble, we set out to do a study so we could have better conversations with business about how a loyalty or customer engagement programme supports ROI. Our study included a quantitative survey of 1000 New Zealanders (spread proportionally across regions, demographics and ages to mirror the NZ population), plus the Yabble team applied their AI expertise to allow us to create AI ‘personas’ for qualitative insight using different sets of relevant source data, which means we could effectively ‘interview’ AI’s who were created to represent different types of people (eg Olivia the 22 year old student, Aroha the 42 year old earth mother, etc). This meant we could enrich the ‘what?’ in the NZ survey with the ‘why?’ from quizzing the AI personas.

Here’s what we discovered in our ‘2024 Loyalty State of the Nation’ survey.

74% of Kiwis were positive about loyalty programmes, only 5% saying they were a ‘waste of time’.  In particular, there is a significant shift with younger adults more positive (87% for under 25’s).

We found younger kiwi adults are embracing digital loyalty programmes like never before, such as Mecca’s Beauty Loop, and the tiered and rewarding nature of it. They have also resonated with the game type aspect of boosts in the new EveryDay Rewards programme, and free food from Maccas Rewards.

Want to attract customers? 1 in 3 said it influenced deciding to buy from a brand for the first time (over half of under 35’s).  Meantime, the more traditional use of loyalty programmes to retain customers was validated, with 55% saying it influenced if they stayed with a company (a whopping 69% for under 35’s). 

In this economic downturn, our survey indicated a loyalty programme also supports both margin and visitation; 61% said they shop more regularly with brands that have a loyalty programme they like, and 37% said they don’t mind spending a bit more with a brand that rewards and recognises them.

How about Consumer Magazine’s fears around use of data? Firstly, I can tell you as a professional in this space, that most NZ brands lag behind the rest of the world in using data well.  There really is little cause for concern around ‘Big Brother’, especially compared to how people share data on TikTok and other social media.

This was reflected in the answer to “I’m happy to share my data in return for relevant offers”. Kiwis were mixed, more relaxed in younger age brackets with 48% of 25-34 year olds agreeing, compared to only 25% of 55-64 year olds.  Fair to say, because most brands haven’t done a great job using data well to recognise behaviour, older generations aren’t seeing the value exchange pay off. And they are wary. Younger people as we know are more open to the reciprocity of data for benefits – 39% of 25-34 year olds agreed “I expect brands to know what I prefer and like”.

Our Yabble AI persona Olivia, 22 years old and a student, said “I think it’s fine for brands to collect data as long as they are transparent about it and use it to genuinely improve my experience. I expect to see immediate benefits, but they must ensure my data is secure and not misused”. Overseas we see brands more upfront about what they will do with your data – something that many brands can do better here.

Our big takeouts? 

• Loyalty programmes are popular, particularly in retail, service, product and business to business
• Get it right, and consumers will spend more with you, visit more often, drive past competitors, and you’ll attract new customers
• Younger adults have become very positive about all things loyalty – and are prepared to engage and share data if you do it well; as the market of the future, one to watch
• There’s an interesting tension around analogue vs digital programmes; Kiwis love loyalty cards, but it’s a trained behaviour. A more connected realtime digital experience is the future, but few brands have done it well here yet.

Finally, Maya Angelou is often quoted saying “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel”. Our study unearthed that loyalty programmes are part of how brands make you feel – valued, recognised, seen as a customer.

Ben Goodale

Ben is CEO of strategic marketing agency Quantum Jump, and is a noted loyalty marketing expert having launched many successful loyalty programmes.

https://businessdesk.co.nz/article/retail/loyalty-programmes-get-big-tick-from-nzers