Loyalty and co-brand programmes: a catalyst for business growth

With the emergence of younger generations and more sophisticated consumers, the concept of brand loyalty has taken on a new meaning. It’s not just about buying a product or service anymore – these days, consumers are looking to establish a personal connection with a brand that aligns with their values and convictions. As a result, loyalty programmes are evolving to not just reward transactional behavior, but rather be the platform in which complete consumer relationships are built based on trust, value and relevancy.

The loyalty market has always been dynamic, but the post-pandemic years have unleashed a new wave of innovation. Despite geographical and industry-specific nuances and trends, it’s still true that people want to earn rewards where they spend the most, they want rewards to be valuable, and they want to claim their rewards in ways that are easy and convenient. What has changed considerably is the way brands deliver value – increasingly, consumers expect this value exchange to reflect more than just transactional behavior. People are compelled by personalisation and relevance at the individual level to demonstrate reciprocity between member and brand. To effectively target this demand, and given that consumer preferences are ever-changing, it’s key to stay close to the customer. To effectively drive loyalty, brands need to constantly monitor consumer expectations to be able to deliver on them. Ultimately, the recipe for success is understanding what consumers want and value to deliver on it and meet them where they want, when they want.

Visa partnered with Bond to deliver The Loyalty Report^TM, regarded as the industry’s longest standing and largest data set on customer engagement and loyalty attitudes. The latest edition surveyed 60,000 consumers in 26 markets and looked at more than 1,000 loyalty programs across more than a dozen different industries and sectors.

The study found that effective loyalty programs have the power to positively impact a brand helping to drive business growth by capturing greater share of wallet. The European data reveals that:

• 64% of respondents would be more likely to recommend a brand that has a strong loyalty program.

• In terms of spend, 57% of respondents are willing to modify their spend in order to maximize their loyalty benefits

• 61% said that loyalty programs are part of their relationship with brands.

• Loyalty membership can also drive greater spend on co-brand cards: the average percentage of discretionary spend placed on Co-Brand is 40% higher among loyalty members v. non-loyalty members.

But what makes a successful loyalty program? Research into the top ten drivers of satisfaction in loyalty programmes has shown an increasing importance on ease, flexibility and recognition post pandemic. Seamless experiences, ease of claiming benefits, value for money and making members feel valued and important are all factors that are increasingly important.

When we explore sector-specific insights, the study shows that satisfaction among co-brand cardholders is uniquely driven by factors such as ease of tracking account activity, ease and relevancy of the programme website and effective cardholder support.

Successful co-brand programmes put customer needs first. This has become more important than ever in an age where we see greater demand from consumers for personalisation, ease and flexibility in how they engage in commerce.
Visa partners with retailers and issuers worldwide to curate, launch and grow co-brand programs that deliver value to their most loyal customers and support business growth.