This is an excerpt of the full article by Kyle Clark,  Vice President – Loyalty Solutions Global Product Development at MasterCard, published in the Brand Quarterly & Brand2Global ‘Global Marketing’ Special Edition.


Brand Quarterly Global Marketing Special Edition

How many loyalty programs are you a member of? Better yet, how many of those loyalty programs do you actually participate in? Why do you participate in the loyalty program of Brand A, but not Brand B? These questions may seem simple, however a Loyalty Marketer knows that the answer to them is the difference between increased revenue from loyal customers and a high attritionrate.

Loyalty programs have evolved since S&H Green Stamps helped pioneer the simple idea of giving consumers stampsbased on their spend, that could be redeemed for merchandise. In 1981, American Airlines expanded on the stamp concept by introducing the now familiar AAdvantage program. Within days, United rolled out Mileage plus, with Delta and TWA following suit within the year¹.

The year 1981 is key for two reasons: Consumer Loyalty became table stakes for airline companies (and in the following years, all consumer facing companies), and consumers were now faced with the question “Which program is the best”? Likewise, Loyalty Marketers now had to address the challenge of a lack of differentiation between companies.

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References:
1 http://www.frequentflier.com/programs/history-of-loyalty-programs/

 

You can read the full article online at BrandQuarterly.com as an individual website article or check out this and much more great content in the Brand Quarterly & Brand2Global ‘Global Marketing’ Special Edition.

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