Although it is easy to think that once a consumer has been with a brand for a long time they are unlikely to swap, new research from Engage People, the loyalty network enabling programme members to pay with points directly at checkout, and The Wise Marketer, the education, advisory, and media company, reveals that 90 per cent of consumers could be swayed to switch with the right incentives.
The report by Engage People and The Wise Marketer, titled Cashing Out: What Consumers Expect from Loyalty Programs, revealed that financial-based rewards such as the ability to pay with points (PwP) are key in ensuring consumer retention and engagement. Interestingly, despite many consumers of the 1,001 surveyed participating in loyalty programmes, only 12 per cent identified as truly brand loyal.
This shows that the remaining 88 per cent can be swayed to another brand based on whats on offer, with price (69 per cent), loyalty programme benefits (53 per cent) and special promotions and discounts (51 per cent) being the main three reasons for jumping ship on one brand and going to another. However, each of these factors impacted customer retention in a different way.
Pricing was listed as the main reason for looking at another brand, but in order to stay engaged with that brand and not look elsewhere again, loyalty programme benefits were highlighted. Meanwhile, special promotions and discounts acted as a key motivator in purchasing decisions.
The driver of loyalty programme
“It’s not that surprising to see that price is the leading driver of switching behavior from one brand to another,” said Aaron Dauphinee, CMO of The Wise Marketer Group, the firm commissioned to conduct the survey.
“More than half of survey respondents indicated that loyalty program benefits can be an inducement, slightly bettering special promotions and discounts. When you ask consumers what benefits they prefer, cash back or credit has always led. We see that in this report, but the findings suggest that the combination of ‘what’ consumers can redeem for, such as merchandise at the retailer, and ‘how’ they can redeem, such as paying with points, are significant.”
This year’s study highlights a continued shift toward financial-based rewards and cost-saving incentives in consumer loyalty preferences. In 2022, The Wise Marketer found that 78 per cent of consumers cited earning rewards as their top reason for joining a loyalty programme — a number that climbed to 87 per cent in 2024.
Combatting wandering loyalty
However, while loyalty programmes are a major way of ensuring customers stay engaged, they are not always a given to ensure long-term customer loyalty. In fact, almost half (47 per cent) of respondents have stopped participating in at least one programme, revealing significant disengagement. The primary reasons for this are:
- Difficulty in earning rewards (51 per cent) – Consumers are frustrated by slow or complex point accumulation
- Lack of relevant or appealing rewards (41 per cent) – Benefits fail to align with consumer needs
“Loyalty today isn’t a given – it’s something brands have to continuously earn by delivering tangible and immediate value,” said Len Covello, CTO of Engage People. “Consumers are actively seeking rewards programmes that make it easy to redeem points in ways that benefit them. When those expectations aren’t met, they move on.
“For example, providing the ability to pay with points helps brands stay competitive by providing the flexibility and financial relief consumers want, ensuring engagement isn’t just transactional but long-term.”
Boosting member engagement
The report identified that one of the most effective ways to combat disengagement and boost member engagement is by offering the ability to exchange points for cash-like value at checkout. The study found that 78 per cent of consumers would engage more with a loyalty program that provides ‘Pay with Points’ as an option, underscoring the demand for flexible redemption solutions that make rewards immediate, meaningful, and easy to use.
When it comes to loyalty program engagement, consumers overwhelmingly favor tangible financial benefits over ‘softer’ experiential perks. The top engagement drivers include:
- Cashback or credit (86 per cent) – The most preferred redemption option
- Price-oriented incentives (65 per cent) – Discounts, promotions, and rebates
- Loyalty-driven incentives (61 per cent) – Points redeemable for goods and services
Consumers also favor redemption options that directly reduce their costs. The research found that 64 per cent of consumers prefer the ability to Pay with Points at checkout, further underscoring the demand for seamless, flexible redemption options that provide immediate financial relief.
