The Evolving Consumer Landscape and the Importance of Loyalty Programs
In today’s market, consumers are no longer monogamous; six out of ten purchase similar brands. The proximity and benefits offered by companies, such as coupons, discounts, and personalization, are crucial to remain in the preference of Latin American consumers.
Juan Solana, a partner at EY and leader of the “Loyalty Strategies and Programs in Latin America 2025” study, emphasizes that “you must secure a spot in the top three of consumers’ preferences.”
The Power of Better Rewards: 87% Ready to Switch Brands
The report highlights that 87% of consumers in the region would be willing to change brands if they find superior benefits, underscoring the need to provide additional value.
- Points accumulation is no longer enough: Half of the consumers value the ability to choose their own rewards, reflecting a higher demand for personalization and control.
- Economic incentives remain crucial: 90% prioritize tangible benefits like discounts.
Personalization: The Key to Retaining Consumer Interest
Solana explains that personalized loyalty products and experiences have become the differentiator, crucial for building connections with consumers and boosting sales.
- Effective loyalty strategies can increase recurring customer consumption by 15-25%.
- 82% of consumers say these programs directly influence their spending levels.
- 83% of consumers report improved brand perception due to loyalty programs.
The most common benefits offered by companies in their loyalty programs are points redeemable as cash, discounts, exclusive events or experiences, and coupons.
However, Latin American consumers are hesitant to share their information due to data usage concerns. They are more comfortable sharing if it leads to better personalization, such as additional discounts on their birthday or tailored experiences.
Clarity in Program Objectives, but Limited Measurement
Although companies have clear objectives for loyalty programs—retention, increased ticket size, and attracting new consumers—few measure the impact.
- Only 58% measure customer retention, analyzed in just six out of ten companies.
- 56% measure the user life cycle in program usage, but only 33% track average purchase value and 31% measure sales increase in affiliated products.
This indicates that, while businesses aim to retain customers, there is still room for optimizing the financial impact measurement of loyalty and its contribution to long-term profitability.
