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Capgemini Consulting is out with a new study in which it suggests that "loyalty programs have not evolved with the digital age and are failing to engage consumers." The report notes that "active participation rates in loyalty programs are often low," and posits that "89% of social media opinions on loyalty programs are negative."

Key findings from the report:

• "Just 11% of loyalty programs offer personalized rewards based on a customer’s purchase history or location data."

• "79% of loyalty programs use the mobile channel, and yet only 24% allow redemption through it."

• "97% of loyalty programs are based primarily on purchases made by consumers."

• "Only 16% of loyalty programs reward customers for activities, such as taking online surveys, rating and reviewing establishments or referring friends to the program," and only "14% employ gamification mechanisms to reward customers."

And, Capgemini recommends that successful loyalty/engagement programs should:

• "Integrate loyalty programs with the overall customer experience."
• "Deliver personalized customer experiences."
• "Conduct 'Social Listening' to understand customer needs."
• "Reward members for social media engagement and advocacy."
• "Provide value beyond traditional rewards."
KC's View:
No big surprise here ... most loyalty programs are just glorified discount programs designed to bribe the shopper into loyalty rather than actually demonstrating loyalty to the consumer.

"Engagement" is an easy word to writer and say ... but actually creating an engaging customer experience that forms bonds between shopper and shopping environment is much more difficult.