Warc Briefing: Loyalty Marketing
Definition: Loyalty or retention marketing is the practice of identifying and rewarding customers with the highest lifetime value to a brand or company.
- There were 1.3 bn US loyalty scheme memberships, or four for each citizen, in 2009i.
- Following a successful sponsorship campaign, Telefónica O2 customers were 19% less likely to switch providers than the UK market averageii.
- Less than half of CRM projects deliver a return on investment, according to a 2004 Economist Intelligence Unit survey for AT&Tiii.
History and future outlook
Loyalty marketing is a huge industry benefiting from two global trends: falling computing costs and increasing competition for consumers.
What started with pioneering promotions such as NCR's Emerald Club in the US or Tesco's Green Shields in the UK now extends into almost every corner of the service sector as well as industries such as automotive and technology. Any business that is not reorienting itself around a CRM or loyalty programme is said to be risking competitive disaster.