Customer Opinions of Loyalty Programs

Over the last 15 years we have been witness to the rise and rise of customer loyalty programs. Initially, when American Airlines first brought out their frequent flyer programs they were designed to keep customers loyal longer. And, for a while, they worked.

The trouble is that competitive pressures now generally force all of the competitors in the same market to copy each other's programs. The result is that the playing field becomes level again, but at a higher overall cost base - nobody wins, except of course the customer.

As this commoditisation has occurred customer opinions of loyalty programs have become more and more ho hum. The goal is now for companies to differentiate their program from the others and once again use it to generate competitive differentiation not level playing fields. But how?

To answer that question you need to really understand what customers want in a loyalty program, what are the customer loyalty trade-offs between benefits and what is the optimum balance of benefits.

The unique Brand Keys customer loyalty methodology provides these answers. It can identify the underlying drivers of customer loyalty, identify the impact of each benefit on overall customer loyalty and then test different loyalty program configuration. This process has been used to optimize and judge many types of loyalty programs including credit card and hotel loyalty schemes to craft the most cost effective balance of program elements.