Busting the Myths Around Loyalty Marketing

Myths vs Facts

Busting loyalty myths

New research reveals what customers really think – and feel – about loyalty programs

We’ve all heard it and discussed it, and there’s no simple answer to this question: How well is our loyalty program (LP) doing? We measure carded play, but what does that really tell us other than what percent of our customers are using their players club card? It doesn’t tell us how our customers feel about our LP, or how our club benefits stack up against our competitors. The truth is, we spend a big chunk of our marketing budget on players club programs, but we don’t really understand them.

Loyalty360 ( a free online resource, if you haven’t checked it out before https://www.loyalty360.org/) recently hosted a webinar that presented new customer research on loyalty programs. The study included 2,000 people age 18 and over, and was evenly distributed across Millennials, Gen Xers and Boomers. Respondents belonged to at least one loyalty program.

Here are two key findings:

Myth #1: Convincing a customer to enroll in your program is equivalent to convincing them to engage in your program.

If only it were that easy! Unfortunately, getting a customer to sign up for the players club and issuing them a card is only the first step. Why do some customers become active program participants and others just don’t? Here’s what the results showed when people were asked why they did not become or stay engaged in a loyalty program after joining:

  • 41% Benefits are too hard to earn or take too long to earn.
  • 22% Rules are confusing or unclear.
  • 19% Program is boring.
  • 18% Not enough reminders/communication about the program after I joined.
  • 17% Benefits/rewards are not appealing to me.

The takeaway from these results is that we have to make sure there is an easy way to obtain at least some type of reward (buffet discount, free entries, etc.), and that members understand this process. Make sure that they know how to earn and redeem points, and what they can be used for. Communications that you send to club members should clearly explain benefits and how they can be earned. The first few months after a person joins are the most critical, so review your new member policies and see what you can do to beef up members’ learning curve about your program.

Myth #2: Consumers primarily join loyalty programs for mercenary reasons.

This study identified four main reasons why people join loyalty programs. While earning rewards is the top reason, less than half of customers say that this is why they join a loyalty program.

  • Mercenary – 43% (I wanted to earn rewards.)
  • Inertia – 31% (Easy or automatic to join – no effort on my part.)
  • True Loyalist – 17% (I love the company’s products and services.)
  • Cult – 5% (I identify with the company’s purpose and values, and feel part of the
  • “community” with other customers.)

The number that we should be concerned about is that nearly one-third of customers join a loyalty program simply because it’s there. Additionally, 41% of all customers in LPs say that they “pay very little attention to programs or no attention at all.”

This inertia in our membership ranks can be a very expensive problem. We’re signing people up for membership, but they don’t really know or care about the program, and they still may not care once they’re members. Remember, just getting someone to join our club is only the first step; to make it a profitable relationship for our casino, we have to try and get the member engaged in our program.

I’ve conducted customer surveys that show players club benefits are often the number one reason why customers choose to visit one casino over another. Knowing how your customers rank your club program, how you could make it better, and how it compares to your competitors’ programs could translate into a more appealing club, more effective use of marketing dollars, and increased profits.

Deb Hilgeman, Ph.D.