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Robbie Baxter takes a look forward for all those running a subscription-based business to provide insight into the future of loyalty programs.

For the last fifty years or so, for many marketers,“Loyalty” has been synonymous with Points Programs.  Nearly every hospitality organization  and retailer has a Points Program to drive engagement in episodic businesses.  The value on both sides is clear. Consumers “earn” rewards in exchange for frequency, recency, breadth and depth of purchase. Businesses enjoy greater Lifetime Customer Value (LCV) and also have a means of tracking consumer behavior by individual. 

These programs have grown increasingly sophisticated—consumers are allowed to use their points not just with the points-issuing brand but with an array of partners, and can accrue points through a broad range of activities, with special accelerators and bonuses based on desired behaviors.

 Consumers have kept pace with that sophistication. People spend hours understanding the implications of these rules and optimizing shopping and travel to maximize points. There’s a whole cottage industry or experts that has sprung up around these points-based programs, to help consumers quantify the value of their points, and use those calculations to determine which programs, cards and brands to use.

While these programs can be effective in driving revenue, they work in much the same way as promotions and discounts. In other words, they are financial transactions—discounts for frequency, recency, and depth of purchase.  They aren’t really about loyalty, or “preference” at all—it’s not an emotional relationship.  And these programs have become expected, a box to check, rather than a differentiated way of building connecting with one’s best and most loyal customers.

Key points include:

• Points based programs
• Premium Loyalty Programs 
• Forever transaction best practices

Read the full post, What is the Future of Loyalty Programs? on LinkedIn.