Travel 101

Loyalty Crazed?

Call it the loyalty craze. According to Jupiter Research, more than 75 percent of consumers now have at least one loyalty card, and the number of people with two or more is estimated to be one-third of the shopping population. Cap Gemini Ernst & Young CTO John Parkinson says his family has 37 loyalty cards, and other surveys suggest loyalty-for-rewards plans is showing no signs of letting up anytime soon.

So what’s up?

While loyalty cards and prizes have always been, first and foremost, an effective way for businesses (large and small) to track customers’ shopping habits, more customers than ever now consider themselves entitled to special treatment, a marketplace psychology spawned in the 1970s by the airline industry’s invention of frequent-flier miles.
The fact that loyalty programs increase temporary behavioral loyalty (i.e. actual repurchase), is agreed upon by most, but it is said that the loyalty is to the loyalty program not the brand. The customers attracted are those who may desire ‘something for nothing.’

But do they really work? To be sure, it’s all in the execution. Several companies have figured out how to deliver a successful loyally program.

With 56 million members globally, IHG’s Priority Club

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