Are loyalty programs decreasing in effectiveness?

by no comprende   Last Updated September 18, 2017 17:16 PM

I have seen the few loyalty programs I am aware of trying to increase user participation. I wonder if this is because they are dropping off in effectiveness?

For example, the one grocery story loyalty card that I use recently redeveloped their program entirely, and partnered with a different set of gasoline stations. They also added a lot of other 'partners' that I can gain points by using. And, they started spamming my email with tons of messages - they didn't formerly have my email address, but it is now mandatory for the new loyalty program. I never use their partners, rarely use the connected gas station (I don't buy much gas) and I never open the emails. In fact, I do just what I have always done: shop at the store and show them the card at the checkout. I get all the same benefits as before - reduced prices on some items. That is what I want. I do not want to spend time on email or considering their partners, I just want groceries. Did they recreate this program because it was declining in effectiveness for them?

Example Two: I have two credit cards, one for in-budget things like gasoline and groceries, the other (at a different bank) for out of budget purchases like dining out or buying gifts. So, the in-budget one gets all of my regular expenses except for rent and utilities (which are on auto-pay). I cannot possibly use the card 'more' than I do. Yet they give me a cent or two for every dollar I spend. And I do not ever run a balance so they are not getting any interest from me. They are paying me to use their card. What are they hoping to achieve?

Do these programs keep getting more aggressive because they are working or because they are not working? The grocery one was irritating, especially the required email 'opt-in'.

Tags : marketing

Answers 1

In response to your 2nd example: They are hoping to achieve a loyal user by ways of using the 'Reciprocity Principle'. It is a technique used by people and marketers that is based on human behavior. Essentially, they will give you something for free, and in turn, you will (psychologically) feel obligated to give something back to them (your money, trust, etc.).

Read this for more info:

September 18, 2017 17:06 PM

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