Everyone expects to be rewarded

According to this post in the NY Times, Americans racked up about $48 billion of rewards via fly miles, hotel rewards, credit card points and other programmes in 2010. The average household it seems has 18 loyalty programmes and earns $622 a year in miles and points. So, roughly $35 value per programme per year. And yet nearly one-third of that amount will go unclaimed.

You can read this as proof of the ubiquity of rewards systems, but what fascinates me is the clear expectation of consumers that they will now receive rewards in some form for so much of what they do, whether they cash them in or not.

Once loyalty was. It existed out of convenience or preference, habit, range or relationships. Now, for many brands, loyalty costs. Sure, you get to keep the customer, but you keep them on retainer. You keep them by pumping incentives at them whenever they buy. And the irony of those incentives, looking at the stats above, is that such generosity doesn’t count for anything up to 33% of the time.

The dilemma for any brand that depends on loyalty programmes to keep its customer base motivated is this: the more you give, the more it’s expected but actually the less it means.

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0 Comments

  1. Alexandra Lutyens says

    Great post Mark. Interesting to see where this is going on the social web with companies like Badgeville http://www.badgeville.com/. Basically integrating an individual’s social media networks into company websites and encouraging those individuals to get involved with the brand through loyalty rewards.

    • Yes, and the fact that it is “white label” is facinating in itself. It suggests to me at least that this company believes loyalty programmes don’t need to be as tailored to a brand as I would think they do.

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