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Survey finds that three-tiered loyalty program structure is outdated

Nearly one-third (32%) of United States and Canadian consumers can’t identify which tier they belong to in their favorite loyalty rewards programs, according to a study recently released by Colloquy.

Colloquy's research reveals that the familiar gold, silver and bronze tiering system no longer works. The study shows the three-tiered structure is outdated as a way for brands to keep their customers engaged — sometimes creating confusion rather than inspiring loyalty.

The lack of awareness of basic tier status is a key finding in "Fears for Tiers: 2014 Colloquy Study on Membership Status in Loyalty Programs."

“Savvy shoppers and travelers are all too aware of the recent onslaught of changes to rewards programs,” said Jeff Berry, study author and Colloquy research director. “Brands want to revive consumer engagement simply by updating rewards, but that exacerbates confusion about tier levels and can impose so many limitations that upward movement is perceived as unattainable.”

The Colloquy tiering research sheds light on a key gender difference. Hard benefits, such as monetary or cash rewards, are more likely to motivate women (84%) than men (81%). The positive feeling of reaching a higher tier status is stronger for men (39%) than women (33%).  

Approximately 3-in-4 consumers said it’s acceptable for businesses to give special treatment to members of their loyalty programs. And 69% of survey respondents said it’s fair for customers to purchase a higher tier membership if they want to receive the same benefits as those who earned their status through program participation.  

In other findings:

  • 50% of survey respondents said they have increased their spending or changed other purchasing behavior in order to achieve a higher tier status in a rewards program;
  • 33% of low-tier members do not think they are properly acknowledged for their participation in a program, even though they participate whenever possible; and
  • Non-travel program members are almost twice as likely as those in travel programs to be unsure of their tier level (34% to 16%).

Study findings are based on a February 2014 survey of 3,077 U.S. and Canadian consumers.