Customer Loyalty Programs

Courtesy of Business Pundit, this article on customer loyalty programs and whether they actually increase profits.

To me, you can make a good case for them in commodity undifferentiated products like commercial airline service, but now it seems like every store, from Best Buy to Barnes and Noble have them. It strikes me that stores like these should have plenty to differentiate them without a loyalty program.

I'm no psychic, but I can probably guess what's in your wallet. Chances are it's stuffed with loyalty cards from this airline and that hotel, not to mention a handful of point-accruing credit cards. And your key chain probably has a few hanging versions of the same"”video store tag, gas station "quick pass," grocery store card. You probably belong to more loyalty groups than you can count.

Do you really think your customers are any different? It's hard to expect your affinity program to inspire loyalty when all of its members carry your competitors' cards as well.

Face it: Loyalty programs have reached the saturation stage. The first-mover advantage gained by the pioneers in this field is long past. Now as common as kudzu, affinity programs have lost their distinction and, as a result, much of their value.

I am actually sick of these programs. It increasingly irritates me to have to carry 354 pieces of plastic in my wallet to get the best prices every where I shop. I am old enough to remember when you had to have every stores proprietary charge card to shop there - so you had to have a bunch of department store cards and gas cards, etc etc. I am thrilled nowadays to shed all that crap in my wallet and just use my Visa card everywhere. Now, though, we are rolling back the clock to plastic proliferation. I find myself actually growling at the poor Borders Books checkout person when they ask me if I have (or want) a Borders loyalty card.

Coming soon, I hope, is the backlash, with stores competing with a saying like "you don't have to have a special card to get our best price".

  • Jeff

    It already happens. The employees at the register of my grocery store always have one of the stores affinity cards on them. When they ask for my card and I say I don't have one, they just swipe the generic card they keep for that purpose.

  • Marcia Tarrely

    Posted from CRM EXECUTIVE MAGAZINE
    Oct. 7, 2005

    CRM EXECUTIVE MOVES
    by Marcia Tarrely

    Moloney Moves from Parago to Lead Marketing at Charter Communications in St. Louis

    Chris Moloney has long been considered one of the foremost experts on customer loyalty in the US. Over the last 10 years, Chris has built the reputation of being a CRM industry guru and is one of the pre-eminent conference speakers I have ever had the pleasure of seeing. Over his six year tenure running strategy with St. Louis-based Maritz Loyalty & Marketing, the company grew 10 fold and established itself as one of the leaders in the CRM and loyalty space. He then headed to Dallas-based Parago, where he created and led the eCRM firm’s efforts to become a leader in the customer loyalty marketing arena as well. Chris has worked with over 30 of the Fortune 100 to develop winning customer loyalty marketing programs, strategies and solutions. Seven of the 10 largest US banks have benefited from his strategic direction to improve satisfaction, loyalty and customer revenues. Moloney has also had a significant influence on countless CRM industry tools and techniques and received over 200 media appearances in the past few years. With Chris’s move to Charter Communications, unfortunately CRME fears he may no longer available to the CRM industry as a consultant and conference speaker. However, the CRM industry’s loss is surely Charter’s gain. Many of us know the challenges the entire cable industry has with customer loyalty (I’m a frustrated Cox user myself) and hopefully Mr. Moloney can have an influence on an industry that could use guidance from CRM and loyalty marketing’s boldest voice. For more information on Charter Communications, visit: http://www.Charter.com

    Corellia Heads to NJ to Lead New eCRM Startup

    Mike Corellia has been an innovator in designing eCRM systems that provide real-time feedback for

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