Loyalty programs have proven time and again they do generate lift. An effectively run loyalty program helps companies cross-sell, up-sell, and grow overall spending. This we cannot dispute. Yet, what is the true motivation behind consumers remaining loyal?
I asked myself this question the last time I stayed in Chicago and chose the hotel because I knew they would give me my favorite room, allow me to "raid the mini bar," give me free Internet access (because I'm a loyalty member), and have great wine at happy hour. In sum, I know I am going to enjoy my experience even though I'm in Chicago for business on one of the coldest days of the year. I know even though I'm a loyalty member it will take me a very long term to earn a free room, so I'm not there for the points. I'm there for the experience - which means I'm willing to forgo a stay at my typical brand.
Why do I shop at Amazon every time? Because it keeps track of prior purchases, stores all my addresses, and has everything I could ever want to buy so I can shop and ship out gifts for 10 people in... Read more
Archive for Teresa Caro 
Experience Creates Loyalty, Not Points
Creating Loyalty From the Middle Seat
You would think in today's economy that having premium status as a frequent flyer is enough, yet I manage to feel inadequate as the growing number of million milers continue to get the prime seats, leaving me in the back. All of us, regardless of our status, have experienced the dreaded middle seat on a Monday at one time. Yet, Delta Airlines is feeling our pain and is responding with something as simple as a triggered email -- an email that understands no one likes the middle seat, especially a middle seat on a Monday, and includes a heart-felt apology as well as a few points for my trouble.
Recently, I had the opportunity to talk to the folks over at Loyalty Lab: Matt Howland, CEO and David Rosen, SVP Strategy and Channel Development, about how loyalty programs have evolved from rational "give to get" to marketing that connects with the emotional needs of their members. Historically, rewards focused on spending "x" getting "y" in return. Today's loyalty programs understand the importance of emotional rewards and build their benefits and communications around it. With today's programs people are looking to be rewarded with stuff that makes them feel good: praise, badging, moving... Read more
