Loyalty programmes have grown from the traditional brick and mortar stores in the recent past, give or take a decade, in the e-commerce boom to be more readily available in both settings. Primarily used to reward brand advocates, we now see loyalty as a viable option to the traditional discounts where merchants are able to control the currency to buck spending trends and shift customers’ behaviour.
Frequent Flier Programmes have a habit of being at the forefront of customers’ loyalty, however more recently we have seen programmes being used in coffee shops and auto mechanics who prefer this option to the traditional discounts being offered to regular patrons.
While loyalty programmes have existed in multiple versions in the last 300 years (be it copper coins or stamps used by Mom & Pop stores in the 19th century up until the end of the 20th century), the more modern approach of points-based system is more synonymous with the industry. This is where Loyalty Technology plays an integral role in ensuring the compliance of data, processes and products to integrate moving parts into the whole programme.
Frequent Flier programmes started out as ancillary offerings to get repeat customers such that members feel inclined to choose an airline over another, but we have since seen a shift in initially a coalition of airlines offering the same currency for members flying within the network, whilst retailers have also seen the power of coalition loyalty in allowing members to reach aspiration points faster within the programme network.
The concept of coalition may not be fit for all retailers, however it is a strong concept nonetheless where there has to be a mixed bag for customers to be able to achieve redemption points to get sustained engagement levels.
Going forward, with the emergence of smart phones & tablets, having digital presence in the form of mobile app and/or wallet is essential to turn a non-paying member to a purchaser, a purchaser to repeat spend, and the repeat spender to the brand advocate who will keep with the brand and be a marketing channel for the brand through the best marketing tool out there; word of mouth.