In the U.S. alone, loyalty membership is approaching the 3 billion mark. A Gartner consumer survey shows that 62% of respondents are members of one or more loyalty programs.
However, more than one-third of participants report never using those programs.
Traditional loyalty programs that offer points, rewards and discounts as the core of their offerings are becoming commoditized, forcing providers to find fresh, new ways to encourage brand affinity, expressions of loyalty and to improve the overall customer experience. See Market Guide for Loyalty Marketing Platforms (clients only). This trend also encourages the marketing community to re-examine the definition and value of loyalty. At its heart, loyalty is earned when customers consistently choose your products and services over the competition, over an extended period of time. This type of loyalty is rarely achieved through points from an accrual and redemption engine alone. It takes a loyalty hierarchy of needs.
Marketers are recognizing the limitations of stand-alone accrual/redemption engines. In response, they focus on a more strategic, long-term relationship with customers, based on techniques and treatments that add to affinity, where point programs are part of the approach, but not all.
This week, I offer a screenplay (I wrote at Starbucks) involving a loyalty program exchange between company and customer. Please leave your ideas in the comment section regarding what the retailer might have done better to get their loyalty strategy off the ground.