Interest in customer loyalty programs has never been more avid. After a number of years when such programs always seemed to be on the brink of taking off - but never quite managed to reach expectations - recent years have seen a real and dramatic increase in their uptake. This paper explores the issues which need to be addressed in order to cost justify the implementation of a customer loyalty system.
This paper considers whether smart cards really do have a role to play in loyalty systems or whether they are simply being promoted by the suppliers of smart card technology into what they see as a fast growing, profitable marketplace.
The last ten years has been devoted to developing ways of gaining knowledge of and understanding customers, the next ten years will be devoted to developing ways of using the information. Those that do this effectively will win and those that don't bother will surely fail.
Have loyalty cards reached the stage in their development when they are likely to be merged with other marketing and retailing systems, or will they simply fade away and join their precursors, the green shield stamps, in some far flung promotional graveyard?
Who said, "Money Can’t Buy You Love"? A useful metaphor, though, to help understand the true concept behind customer loyalty. Loyalty programs are about developing sustainable, mutually beneficial relationships. Price incentives can generate a short-term sales uplift but will not engender long-term loyalty.