Study: E-Shoppers Not Swayed by Loyalty Programs

While more than two-thirds of online buyers participate in some type of customer loyalty program, only 22 percent regard the programs as a key factor driving their online purchases, according to a study by Jupiter Communications.

The survey of 1,200 U.S. online consumers found that more people — 40 percent — place a higher value on easy returns. Customer service was the second-most important factor, with 37 percent counting it as a major motivator. Product selection was cited by another 37 percent.

Service, Not Points

Jupiter senior analyst Melissa Shore said e-commerce sites need to work on customer service and other issues before putting too much emphasis on loyalty plans like points-based initiatives. Even travel sites, many of which have “aggressive” customer loyalty plans, have not used those programs to their greatest advantage, according to the study.

“Loyalty is not only about loyalty programs, but also about rather unique and differentiated products or levels of service,” said Shore. “Commerce players must create an online experience for users in which their customers see transacting on the Internet as a benefit, not a deficit.”

Study Offers Recommendations

Among the recommendations Jupiter has for e-tailers:

• Improve customer service. Jupiter said a separate survey found that while 72 percent of online buyers ranked customer service as a critical factor in online buying, only 41 percent said they were satisfied with the service they had received.
• Make it easier for customers to navigate the site. “Commerce players, especially those selling complex products, must address a highly diverse set of questions posed by a broad customer base,” Jupiter said. “Confusing navigation with limited service options will dissuade customers from current and future transactions.”
• Provide more information about products. This factor “remains a critical issue for commerce players,” Jupiter said. “Content must fill the gap created by the inability of consumers to physically touch or see a product prior to purchase.”
• Improve product selection and availability. “Stock-outs present an opportunity for competitors to steal even the most loyal customers,” the study cautioned.
• Provide easy returns. While 85 percent of online buyers said the ease of the return process was important to them, more than half were dissatisfied with their experiences.
• Analyze program viability. The majority — 65 percent — of consumers participating in online loyalty programs said they belong to three or fewer programs. Companies need to “analyze the likelihood of consumers actively participating in their loyalty program, given consumers’ low threshold for participating in a number of programs.”
• Leverage information about users. Companies, Jupiter said, should know the “actual and potential levels of loyalty among their customers” to identify potential users and target incentives.

Jupiter’s study was presented at an online travel forum in Miami, Florida.