The article that prompted these thoughts on loyalty programs.
This idea popped up a few weeks back, but part of the changes that are coming to loyalty programs is driven by the data that shows that they aren’t very effective at driving heavy users to buy more.
‘How Brands Grow’ has an entire section on the topic and reading through it made me go back and look at some of the data from projects I’ve worked on over the years.
What I found was that I love loyalty programs because they are rewards and touchpoints that keep folks engaged with your products, services, or, in my case, often, teams.
The challenge that loyalty programs face is that they are expensive to create.
They are hard to manage and the data isn’t always as clean and useful as you’ll be told.
Plus, heavy buyers already are buying about as much as they’ll buy and the loyalty programs don’t really help change that. And, if they aren’t there, that also doesn’t have a huge impact on people’s purchase decisions either.
In my work, I have seen that distribution, store location, offer, and preference drive buying decisions much more than loyalty programs.
I’m curious about all of y’all’s experiences here because as I mentioned above, reading ‘How Brands Grow’ made me go back and look at my notes and the work I’ve done especially around #sportsbiz.
P.S. I’d say that one program’s changes that do seem to have had an impact on purchase habits were the changes to the Marriott Hotels Bonvoy program.
People noticed. And, in my not comprehensive survey of travelers, it seems that the changes have caused some change in behavior…but not for the good.
Instead, the changes have largely opened up people’s thinking around alternatives.
I don’t know if Byron Sharp has any new research on this topic or specifically around those types of ideas. But he’s worth the follow if you don’t already.