Many businesses use loyalty programs to strengthen ties with their customers, and they often work very well. However, sometimes they can backfire if customers don’t feel as if they are benefiting from the arrangement. Loyalty programs may allow companies to grow quickly but may also negatively impact their bottom lines. Programs that build relationships with customers may be most successful. Under Armor and Amazon are two examples of companies that have developed engaging and successful loyalty programs.
- For most modern consumers, winning extra points on some nebulous scheme will always play second fiddle to price and convenience.
- Loyalty programs may work well in some sectors, but in others they can actually destroy value for the companies that own them.
- For a loyalty program to really add value, the customer should feel the benefit of membership.
“In the UK alone, almost 46.5 million people (92% of the adult population) are currently registered with at least one loyalty program.”