A new retail report by CFI Group and Radial shows that 38% of customers generally avoid participating in retail loyalty programs. Many customers just don’t see enough value being offered in loyalty programs to make it worth joining.

Retailers have an obvious incentive to add more customers to their loyalty programs. Our study shows that retail loyalty members are 12% more satisfied, 10% more loyal, and 13% more willing to recommend a retailer than other customers. The study also suggests tangible ways retailers can attract more customers to their loyalty programs.

For consumers who do not join loyalty programs, 53% say it is simply because they do not like giving out their personal information or are concerned that their identity could get stolen. To reach these customers, retailers can better operationalize and promote their fraud protection services so consumers can be assured that their personal information will be protected.

Another 39%, however, do not sign up for loyalty programs simply because they don’t believe loyalty programs are worth it. Retailers need to find ways to make these programs relevant to consumers.

“Retailers understand that they need to offer meaningful options to meet their customers’ needs,” said Carey Stoker, Senior Vice President, Customer Care Services at Radial. “Faster delivery and flexible returns are important, but equally important, if not more so, is equipping customer care agents with the ability to immediately recognize the customer as a loyalty member and provide personalized service for that customer. A personalized experience not only enhances loyalty but drives additional revenue for retailers.”

Our study points to three specific actions retailers can take to make their loyalty programs more compelling.

1. Offer a faster delivery option.
   63% of all retailer customers say offering faster delivery influences them to sign up for a retail loyalty program.
2. Offer personalized customer service.
   41% of retail loyalty members say that being recognized by the customer care agent makes it much more likely that they will make more purchases in the future.
3. Offering fast and flexible returns and exchanges.
   55% of retail loyalty members are more likely to purchase from that retailer again when given multiple return options