A loyalty program is usual system of rewarding customers, usually tied to a plastic card. It is a way used by large companies in a highly competitive environment to get customers to buy into it. But the loyalty program itself is not as loyal to the customer as it may seem. Loyalty programs have undergone very dramatic changes over their existence. There is a point of view that loyalty programs exploit customers more than they provide benefits. Is this true? Let's try to find out.
The first modern loyalty program appeared at a Coop store in 1934 (you can read about COOP card here). The manager figured out how to collect the data of the customers to be able to offer discounts on groups of goods depending on the interests of the buyer. But it quickly became clear that the collected database had value in and of itself. The data could be processed using mathematical statistics and get a large-scale picture of the company's average customer. It was a breakthrough. So the transition occurred from the old type of loyalty program (each customer is unique, it is necessary to find an approach to him, the customer is always right) to the new type (create a universal customer). The loyalty program card became a symbol of this change. After all, loyalty cards are rarely named; instead, it's a depersonalizing symbol of the universal customer.
How does a loyalty card work?
A typical loyalty program is an incentive plan that allows a retail business to collect data about its customers. In exchange for voluntary participation in the program, customers are offered a card with which they receive rewards. Rewards can be discounts on merchandise, coupons, reward points, or others. The secondary purpose of a loyalty card program is to generate repeat business by offering participating customers something that is not available to non-participating customers.
Loyalty cards are often similar to plastic credit cards, but they can also be key chains or stickers. Typically, a loyalty card has a bar code or magnetic stripe that is scanned at the point-of-sale (POS). The card identifies the customer and sends information about what the customer bought to a database. The information in the database is used to help the retailer understand and influence their customers' buying habits. According to a study conducted by Boston University's College of Communication, eighty-six percent of U.S. shoppers are enrolled in a database of loyal customers; most survey participants said getting a card was worth giving up some privacy.
The information market and platform loyalty
We can view loyalty cards as a symptom of the state of society: the ubiquitous presence of this type of customer incentive provides an opportunity for systematic study. Even the giants, who have been without a loyalty program for a long time, have to resort to this marketing strategy in order not to look behind their competitors; this happened for example to the ASDA retail chain (how to get an ASDA Rewards loyalty card), or to the ALDI retail chain (are there loyalty cards ALDI read here) Loyalty cards are interesting in two ways: both for market research in terms of their commercial effectiveness, and for social relations researchers with the requirement to measure and evaluate their impact on society The enormous databases of personal data collected annually through loyalty cards cannot but have an impact on shaping society. Indeed, based on this data, major retailers and brand leaders launch cross-platform marketing strategies, attracting customers with similar ideas (e.g., eco-friendly, organic). This is how platform loyalty is formed, affecting both customers and manufacturing companies at the same time. It seems very important to determine the degree of integration of loyalty programs and the "information market.
Loyalty card as a marketing communication
Loyalty cards can be considered in the field of marketing communications using progressive communication tools in the context of globalization. Indeed, the universalization of the buyer (e.g., everyone should love and appreciate environmentally friendly products) is an inevitable strategy in the context of global trade. But we must not forget the need for a proper understanding of marketing communications in the process of globalization in order to increase consumer value.
On the one hand, the process of globalization and platform loyalty gives the end consumer access to a growing choice of goods and services. On the other hand, universalization influences consumers' tastes too much to gain their loyalty. What happens in the end? Resistance accumulates in the consumer environment. And this, in turn, leads to an increase in the intensity of marketing programs.
Immunity to loyalty programs
In short, marketing communications in the process of globalization have become an integral part of everyday life in society, whether we like it or not. Loyalty programs are part of our everyday practices, and we are becoming more and more immune to them, at least there is this view among marketing communication researchers. Interestingly, immunity affects somehow the opposite - hardly anyone thinks twice about another loyalty program enrollment. Loyalty cards are taken for granted.