Loyalty: It's not just in the cards - More ways to add long-term consumers

Erik Sherman

Loyalty isn't easily attained. It takes time for new acquaintances to prove their worth and earn our trust. That's just as true for companies as it is for people. Despite this reality, many marketers misunderstand what's behind a successful loyalty program.

Such programs have come a long way since punching a row of icons on a piece of cardboard would get you a free cup of coffee or a discount on your next purchase. They now span plastic cards with magnetic strips and smartphone apps. And the reason isn't to give marketers busywork. Major companies have found that loyalty programs can increase customer retention and acquisition, test marketing concepts, increase sales, and provide data that improves their understanding of consumers.

But siphoning all those benefits out of a loyalty program takes patience — something marketers, under constant pressure for better results, don't always have the time for. In addition, they make mistakes like creating a program that's too complicated or, just the opposite, run an overly simplistic program. Companies also often forget to pay attention to the data they collect or expect results far faster than it takes. Loyalty programs can work, but marketers need to understand the realities, and plan and execute accordingly.

Loyalty, Not Just Discounts