A new survey called 2023 Consumer Prizing Report examines how consumers evaluate and choose rewards from brands and it’s surprising.
The report illuminates a shift from what was once considered “nice to have” to what is now deemed “must have” or essential to consumers with nearly three-quarters (3/4) of respondents sharing a preference for grocery gift cards over spa massages.
Merkle polled more than 1,100 consumers in the United States across generations and income brackets, exploring the consumer preferences and desired benefits of consumer loyalty programs and promotions, including how sentiment has changed given inflation and the increased cost of consumer goods.
“The report highlights how brands can improve prize and incentive strategies to drive desired consumer behaviors through promotions, branded games, a chance to win experiences, and loyalty programs. Consumers prefer options that are convenient and make everyday lives easier,” said Jen Gray, SVP of experience creative, promotion & loyalty solutions at Merkle in a news release. “Consumer sentiment has predictably shifted as people keep a closer eye on the household budget.”
Key findings from the Consumer Prizing Report include:
- Financial Relief and Value: Rewards that focus on everyday needs, such as groceries or even a mortgage or rent payment, resonate with consumers seeking some relief for their budget across all household income spectrums including 80% of low-income (up to $49,999), 72% of middle-income (up to $149,999), and 61% of high-income (159,000 and higher).
- Rewards Delivery: A generational divide separates older and younger generations in how they receive rewards. Between 32-50% of Gen X and baby boomers prefer Visa/Amazon gift cards compared to nearly 47% of millennials and Gen Z, who prefer Venmo/PayPal credit.
- Impulse Control: An average of 77% of baby boomers are more than willing to wait for a larger sum than a smaller cash prize now, regardless of denomination, whereas 53% of Gen X tilts toward a guaranteed small reward – showing a stronger interest in this type of prize versus any other generation cohort preferences.
- Accepting Digital Currency: Of all generational cohorts, millennials are the most willing to accept cryptocurrency – albeit only 4%. While 11% of Gen X wouldn’t mind receiving it as a prize showing they have a curiosity for digital currency, they prefer more secure methods for actual payment.
- Prizing Preferences: Regarding physical prizes, brand vacations, and shopping sprees remain enticing grand prizes for both genders. Women rank a shopping spree, vacation, and a room makeover as the most appealing, while men prefer a lifetime supply of their favorite brand, followed by a vacation and shopping spree driven primarily by millennial and baby boomer males and likely influenced by tighter budgets.
“It’s no surprise that consumer preferences have shifted given the dynamic external environment,” said Gray. “Additionally, consumers are savvy and will choose a benefit to suit their needs. The insights in this report will help marketers improve engagement rates while deepening customer relationships. Adjusting the rewards strategy to match customer preference is critical to ensure high retention rates. Marketers who do not will experience customer churn.”
To view the full report, please visit here.