Can anything save loyalty?

by: Karen Webster

There’s no good news these days if you’re in the loyalty business.

It’s easy, though, to think that there is.

For instance, just last week, Colloquy’s annual loyalty census reported that loyalty membership is exploding, with 3.3 billion loyalty memberships now in place in the U.S.

If you never read beyond the headline, you’d think that loyalty innovations were setting the world on fire.

But, it’s the fine print that tells the real story.

Active participation in those loyalty programs has been on the decline since 2010, when it was pretty pathetic to begin with. Then, 54 percent of loyalty program members were inactive. Five years later, in 2015, nearly 60 percent (58 percent to be precise) of program members are inactive – despite the fact that the number of memberships is on the rise at 29 per household.

And, since the definition of active participation is pretty vague, I’d bet that engagement, as defined by the ability of those programs to drive incremental spend to merchants, doesn’t even break double digits.

You don’t need to have passed high school algebra to figure out something is way off here.

I can’t say that I’m surprised.

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