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Customer Loyalty Programs

Marketing program designed to enhance brand loyalty by cultivating an ongoing relationship between a marketer and his customer.

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Enough already!

  • Nov 18, 2010
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Have you noticed how your keychain and wallet have been gradually expanding over the past few years? Do you now have more of those "rewards" cards on your keychain than keys?  Are you tired of having to pull out your card just to buy a candy bar at the local drugstore?  These days "customer loyalty" programs are all the rage with retailers and service providers of all sizes and descriptions.  I don't know about you but I am suffering from "rewards card" fatigue!  Recently I did a quick inventory of all of the cards that I am carrying right now.  Here is what I found.  I have cards for CVS, Borders, True Value, a pair of supermarket chains, Subway, Panera, my car dealer, Staples, the bagel shop and now just this week J.C. Penney.  Fortunately for me I do very little travelling or I would possess additional cards for hotel chains, car rental companies and the airlinesIt is getting to be a bit much!

Customer loyalty programs are really nothing new.  When I was growing up trading stamps were the gimmick retailers used to attract and keep customers.  If you are under the age of 45 you are probably unfamiliar with them. The best known of these trading stamps was S & H Green Stamps which were introduced by Sperry & Hutchinson way back in 1896.  Customers collected stamps from retailers (double stamps during special promotions) and pasted them into books which were redeemable for merchandise from a catalog.  Trading stamps were wildly popular in the 1950's and 1960's and during those halcyon days there were 6 or 7 companies in the stamp business. But times change and by the mid -1970's trading stamps were largely gone with the wind.  Customer loyalty programs would make an impressive comeback commencing with American Airlines innovative "AAdvantage" program beginning in 1981.  Suddenly "frequent flyer miles" became part of our lingo and over time more and more companies decided to get into the act.  It appeared to be a "win/win" situation for everyone involved.  Customers seemed to enjoy accumulating points and garnishing rewards while businesses enjoyed increased customer retention, increases in spending per visit and much better tracking of customer habits.  I always found it a little bit creepy that retailers were able to track my purchases so thoroughly.  Now it seems that just about everyone is trying to get into the act which begs the question: "If everyone is doing it then what is the point?"

History tells us that these so-called "customer loyalty programs" are somewhat cyclical in nature. Somewhere along the line a major retailer will announce a new marketing strategy emphasizing the "lowest prices possible without all of the gimmicks".  Others will follow and gradually "rewards" programs will fade away only to return again at some point in the future in yet another format.  Personally I cannot wait.  I consider myself to be a fairly astute consumer and at the end of the day I am going to patronize companies that offer the lowest prices and best service whether or not they have a "rewards" program.  It has actually gotten to the point where I have decided not to do business with some companies simply because I would be required to sign up for yet another card.  Let's dispense with all of the nonsense.  Just give me your best price and let's do business.  Enough is enough!
Enough already! Enough already! Enough already! Enough already!

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November 19, 2010
I don't mind 'em so much, but I'd be the first to admit that I generally only participate in ones where I'm benefitting from something I seriously want anyway ... like BestBuy, Amazon, and Barnes & Noble. Otherwise, yeah, I'd agree that it's a bit of overkill these days.
November 19, 2010
The good news is that if you have a smartphone, there's an app called Keyring that will convert all your cards into a stack of barcodes stored on your phone! Hurray!
November 18, 2010
Pricing isn't everything...or people would only shop at Wal-Mart. While a certain portion of the population shops only on price, many customers do appreciate a shopping experience, value good customer service as well as value. Value does not only mean cheapest. Robert Piller Downloadincentives.com
November 18, 2010
I have two rewards cards and that's enough for me. Now I just decline everything anyone offers, it really is annoying. That's another reason I love Trader Joe's! I don't need to have a card or clip coupons to shop there :)
About the reviewer
Paul Tognetti ()
Ranked #2
I guess I would qualify as a frustrated writer. My work requires very little writing and so since 1999 I have been writing reviews on non-fiction books and anthology CD's on amazon.com. I never could … more
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Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behavior — behavior which is potentially of benefit to the firm.

In marketing generally and in retailing more specifically, a loyalty card, rewards card, points card, advantage card, or club card is a plastic or paper card, visually similar to a credit card or debit card, that identifies the card holder as a member in a loyalty program. Loyalty cards are a system of the loyalty business model. In the United Kingdom it is typically called a loyalty card, in Canada a rewards card or a points card, and in the United States either a discount card, a club card or a rewards card. Cards typically have a barcode or magstripe that can be easily scanned, and some are even chip cards. Small keyring cards (also known as keytags) which serve as key fobs are often used for convenience in carrying and ease of access.

A retail establishment or a retail group may issue a loyalty card to a consumer who can then use it as a form of identification when dealing with that retailer. By presenting the card, the purchaser is typically entitled to either a discount on the current purchase, or an allotment of points that can be used for future purchases. Hence, the card is the visible means of implementing a type of what economists call a two-part tariff.

The card issuer requests or requires customers seeking the issuance of a loyalty card to provide a usually minimal amount of identifying or ...

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