Finding the opportunity: New data on subscription services and loyalty programs
See what our research reveals about subscription and loyalty programs—including key demographics, prevalence, and price points.
When done right, subscription services and customer loyalty programs can increase brand loyalty and guarantee recurring revenue—not to mention bolster brand awareness as customers spread the word about must-see content or VIP perks. That’s what makes the tens of millions of Americans who subscribe to media services like Netflix and participate in programs like Delta Skymiles so valuable: they’re customers that can potentially help many parts of the business.
Our research recently explored subscriptions and loyalty programs, uncovering insights into their demographics, optimal price points, and stickiness. This data paints a picture of what makes these programs successful and where any business can look for more opportunities.
82% of high earners are enrolled in at least one loyalty program
Loyalty programs are popular among consumers, with nearly 3 in 4 (71%) of U.S. adults enrolled in some type of loyalty program¹. However, our research found that high earners (those who make $100,000 or more a year) are a major part of that group.
Among high earners, 82% are enrolled in at least one loyalty program, compared to 75% of people who make $50,000 to $99,999 and 70% of people who make less than $50,000. High earners are much more likely to participate in airline loyalty programs (47%) than those making $50,000 to $99,999 (23%) or less than $50,000 (14%) but, interestingly, they’re more likely to participate in other—free— programs too.
For example, high earners are 18% more likely to participate in grocery store loyalty programs and 11% more likely to participate in pharmacy and convenience store programs than those who make less than $50,000. This trend suggests stronger interest in rewards programs among high earners, regardless of the product or industry—which points to an opportunity for diverse brands to build loyalty with people who have more spending power.
71% of female consumers would join a loyalty program at a business they frequent
It’s not all about income; across categories, female-identifying consumers lean toward loyalty programs. Our research found that more women are currently enrolled in loyalty programs than men—especially when it comes to programs offered by convenience stores (36% vs. 26%), cafes (28% vs. 18%), and beauty and skincare retailers (20% vs. 4%).
A full 71% of women say they’re likely to join a loyalty program if it was offered by a store or website they regularly shop at, including 35% who say they’re “very likely” to join. In contrast, among the 65% of men who say they are likely to join a loyalty program at their favorite businesses, only 24% said they’re “very likely” to join.
Understanding the receptiveness of this demographic is important—if you discount female consumers, you may miss out on making your loyalty program a true success.
Alcohol subscriptions have doubled, video game subscriptions have room to grow
COVID has unquestionably impacted consumer habits, but what can we learn about subscription opportunities in industries that evolved during the pandemic?
As people spent less on live experiences, the video game industry skyrocketed. But game subscriptions and streaming services still aren’t the number one way to play. The majority of gamers (83%) primarily play video games by downloading a digital game or gaming app, more than three times the number who primarily stream games (24%) using a service like Xbox Game Pass or Playstation Now³. Despite the latter not being the most popular method of gaming, 24% of gamers do currently subscribe to a game subscription (14%), streaming service (3%), or both (7%). This means there’s potential to not only reel in more subscribers, but also make sure that current subscribers become more invested in their subscriptions.
On the consumer goods side of things, more than 1 in 5 Americans said in June 2021 that they’d cut back on trips to the store to buy alcohol during the pandemic⁴. This left an opening for the growing alcohol subscription business, where the subscriber base grew from 1% pre-pandemic to 2%. And while this uptick may appear relatively small, it's an indication of how the pandemic has spurred consumers to form new and lasting habits, with 2% of adults saying that an alcohol subscription is now their preferred method of purchasing drinks.
47% of people who canceled their Netflix subscriptions cited high cost as the main reason
For the first time in more than 10 years, Netflix recently reported a major loss in subscribers: 200,000 in the first 3 months of 2022. Our research indicates that cost is the key factor in this downward trend⁵, but it’s not just a Netflix problem. Price is the leading driver of cancellations across all video streaming services, cited by 40% of people who ended their subscriptions.
The good news for Netflix is that more than 1 in 3 subscribers think Netflix’s value is better than its main competitors, and 2 in 3 said that if they could only subscribe to three streaming services, Netflix would make their list. So where do streaming subscription price points and perceived value intersect? We ran a Van Westendorp Price sensitivity analysis using our market research solutions and found that the optimal price right now is $11 per month—which is actually less than it was in late 2020.
This goes to show that if a subscription streaming service—or any subscription service, for that matter—wants to remain competitive, it needs to monitor its target market’s willingness to pay and optimal price to ensure it remains a good value for its subscribers. Many subscribers reevaluate their purchase every time they’re charged a monthly fee. To retain these subscribers, companies need to earn their business over and over again.
¹Methodology: This Momentive study was conducted between March 4-10 among a national sample of 3,334 adults. Respondents for this survey were selected from the more than 2 million people who take surveys on our platform each day. The modeled error estimate for this survey is plus or minus 2.5 percentage points. Data were weighted for age, race, sex, education, and geography using the Census Bureau’s American Community Survey to reflect the demographic composition of the United States.
²Methodology: This Momentive study was conducted between February 2-4, 2022 among a national sample of 2,874 adults. Respondents for this survey were selected from the more than 2 million people who take surveys on our platform each day. The modeled error estimate for this survey is plus or minus 2.5 percentage points. Data were weighted for age, race, sex, education, and geography using the Census Bureau’s American Community Survey to reflect the demographic composition of the United States.
³Methodology: This Momentive study was conducted June 24-29, 2021 among a national sample of 2,972 adults aged 21 and older. Respondents for this survey were selected from the more than 2 million people who take surveys on the SurveyMonkey platform each day. Data were weighted for age, race, sex, education, and geography using the Census Bureau’s American Community Survey to reflect the demographic composition of the United States.
⁴Methodology: This Momentive study was conducted between February 11-15 among a national sample of 5,115 adults. Respondents for this survey were selected from the more than 2 million people who take surveys on our platform each day. The modeled error estimate for this survey is plus or minus 2.0 percentage points. Data were weighted for age, race, sex, education, and geography using the Census Bureau’s American Community Survey to reflect the demographic composition of the United States.
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