Loyalty Trends

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 surveys by information technology analysts Gartner Inc., Forrester Research Inc., and META Group Inc. suggest the data-for-dollars explosion is showing no signs of letting up anytime soon. According to Gartner analyst Adam Sarner, U.S. companies spent more than $1.2 billion on customer loyalty. While loyalty cards and prizes have always been, first and foremost, a cheap way for businesses large and small to start tracking their 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, one of the first modern-day loyalty programs. Originally devised to generate better data on the most popular routes, the airlines broke what was a one-price-fits-all standard and introduced a some-people-are-more-special-than-others psyche that has changed the American, and global, marketplace forever. Says Brian Woolf, president of the Retail Strategy Center in Greenville, S.C., and author of Loyalty Marketing: The Second Act, “Loyalty programs are now a price of doing business.”

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