How many loyalty tags do you have on your keychain? Five? Six? Ten? Would you say those tags make you more loyal, or do you just have them for the discounts? And if it's just for the discounts, does that really build your loyalty or would you switch to the store down the street if they had better discounts?
Those questions are very real and speak to the issues behind research concluded recently by the International Institute for Analytics (IIA), which sought to identify the tenets of customer loyalty strategies and to understand how organizations are using analytics to improve loyalty programs.
Customer loyalty programs are a business imperative in our world of increasingly scarce resources, intensifying competition and fickle customers. As a consequence, loyalty programs have mushroomed to the point that the United States has 2.65 billion loyalty program memberships. These programs are demand-driven, but the research suggests that in many cases they have the unintended consequence of driving demand for discounts and not necessarily cultivating loyalty.
When building winning loyalty programs, marketers face many of the same issues in all areas of marketing: Read More