THE CLARUS Blog

New Data Shows Premium Loyalty Adoption Is High and Consumer Expectations Are Shifting

Premium loyalty programs have gained momentum in recent years and are being embraced by more brands and consumers.  

Consider that 78% of consumers said they’re willing to pay to join a premium loyalty program, according to our 2022 Premium Loyalty Data Study.  

And there are three big reasons why premium loyalty is so popular now:  

  • Consumers have unlimited choices. 
  • We live in an instant culture. 
  • Consumers love subscriptions from music, to clothes, to movies, and meals. 

Let’s learn more about how premium loyalty continues to rise in the marketplace. 

 

Growth of Premium Loyalty Program Adoption 

The first key ingredient in premium loyalty programs’ growing popularity is consumers are willing to pay to become members. 

While premium loyalty program adoption rose by an annual rate of 6% in the past three years, it increased slightly from 70% in 2021 to 72% in 2022.   

Consider nearly three-quarters of consumers now belong to premium loyalty programs.   

Our study reveals that 83% of consumers would join a premium loyalty program if they already belong to that brand’s traditional loyalty program.  

And younger generations (Gen Z through Gen X) show a higher propensity to join additional premium loyalty programs. Here are the numbers broken down by generation:  

  • Gen Z: 87% 
  • Millennials: 85% 
  • Gen X: 79% 
  • Baby boomers: 61% 
  • Silent generation: 46% 

Some aspects of premium loyalty programs that have contributed to its popularity are exclusivity, creating emotional connections, and promoting a sense of community.  

Exclusivity can make your premium loyalty program more attractive and compelling. Exclusivity feeds the FOMO effect so when consumers feel they’re getting access to elite benefits, that leads to emotional connections that become cornerstones of brand loyalty.  

That sense of community and exclusivity connects consumers to brands and forms deep emotional bonds.  

 

Loyalty Trends Show the Sign of the Times  

Nearly three-quarters of consumers now belong to a premium loyalty program, a notable figure that can certainly be labeled a trend. With 78% saying they plan to join additional premium loyalty programs in the next 12 months, these numbers suggest premium loyalty is a sign of the times.  

These numbers show that premium loyalty is here to stay and prosper due to the large percentages of younger generations already involved and who are interested.  

When consumers pay to join a premium loyalty program, they want and expect convenience, immediate value, and exclusive benefits.  

As premium loyalty becomes more prevalent across various product categories, consumer expectations for membership remain high.   

Given the current rate of inflation in the U.S., these high expectations take on new meaning. The percentage of study respondents who said they’d be willing to pay for a premium loyalty program for gas and groceries increased by 16% and 7%, respectively, year over year.  

Two well-known brands launched premium loyalty programs in 2021.  

Best Buy launched Totaltech, which is filled with valuable benefits and services. The program carries an annual membership fee of $199.99. 

 Program members receive:    

  • Unlimited tech support from the Geek Squad 24/7/365.  
  • Up to 24 months of product protection with an active membership.  
  • Free delivery and standard installation.  
  • VIP access to dedicated phone and chat teams.  
  • Access to exclusive Totaltech member prices.  
  • Free two-day shipping.  
  • Extended 60-day return and exchange window.  
  • Everyday savings on repairs, advanced services, and more.  

Meanwhile, Kroger launched Boost by Kroger Plus.  

This two-tiered premium loyalty program costs $59.99 annually and members can receive delivery of online orders within 24 hours. For the $99.99 annual cost tier, members receive delivery of online orders within two hours.  

Also, the program offers members perks such as double fuel points and a welcome kit worth more than $100 at sign-up. 

 

Consumers Want to Join Premium Loyalty Programs to Receive Immediate Benefits  

Our study shows the percentage of consumers who don’t want to wait to accumulate points in loyalty programs and think loyalty programs should provide immediate benefits to maintain their loyalty held steady year over year at 78% in 2022.  

And the percentage of premium loyalty members who expect immediate benefits remains at 38%. Brands should know that premium loyalty program members are significantly more valuable.  

Premium loyalty program members shop more often with your brand. Consider this statistic: 44% of brands with premium loyalty programs say members shop with them at least every few days.   

And premium loyalty members are more valuable than non-premium loyalty members. More than half of brands (51%) with premium loyalty programs consider their members to be at least 4x as valuable as regular customers.   

Here are products consumers would be willing to pay for a premium loyalty program:   

List titled "Products consumers would be willing to pay for a premiun loyalty program" Groceries =65%, Clothes and accessories = 50%, Health and beauty = 35%, Gas = 50%, Travel and hospitality = 33%, Entertainment = 34%, Furniture = 20%, None of the above = 13%

Here are the top benefits that motivate consumers to join or renew their premium loyalty memberships:  

Bar graph titled "Which benefits would motivate you to invest in or renew a premiun loyalty program?" Free Shipping = 69%, Instant Discounts = 63%, Free Giveaways = 59%, Surprise Rewards = 43%, Faster Shipping = 40%, Exclusive Deals = 37%, Holiday Discounts = 33%, Personalized Offers = 28%, Exclusive In-Store Experiences = 18%, Nothing = 6%

The desire for faster shipping as a benefit that would motivate consumers to invest in or renew a premium loyalty program declined 11% from 2021 to 2022. This could be due to consumers accepting that slower shipping times are now more common due to pandemic-induced supply chain delays.  

And free shipping, instant discounts, and free giveaways are what consumers desire the most. 

 

Premium Loyalty Is Growing Steadily As More Brands Launch Programs  

According to our study, premium loyalty programs have grown in popularity and reached a new standard: They’re no longer a “nice to have” for brands, they’re a “need to have” for effective customer engagement.  

With premium loyalty becoming more common among brands, consumers’ expectations for membership remain high. The percentage of consumers who don’t want to wait to accumulate points in loyalty programs and think loyalty programs should provide immediate benefits to maintain their loyalty held steady year over year at 78% in 2022.  

We’ve also seen the tremendous impact premium loyalty programs can have on brands that already have traditional loyalty programs. When you add a premium tier, your best and most loyal customers will participate at that level and serve as brand advocates.  

The numbers clearly show the large number of consumers who already belong to premium loyalty programs and those that would if their favorite brands offered them. The value of premium loyalty program members has been documented as well and they serve their favorite brands quite well.  

Download our 2022 Premium Loyalty Data Study here. 

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