It would be easy to think that today’s customer loyalty programs are a recent creation of marketers and advertisers, but they’re actually not. The history of customer loyalty marketing goes back quite far. As far back as the 18th century, merchants have been giving out incremental rewards for repeat business that allowed customers to redeem tokens for merchandise or discounts.
Railroads used the same loyalty concepts in the 19th century to get passengers to increase their spend on a particular brand. There have also been various third-party programs, like S&H Green Stamps, that created a “brand” for loyalty itself. We’ve known for hundreds of years that there’s a big payoff for getting customers to come back and spend more.
And Then Came Digital Data
Computerization didn’t initially change customer loyalty programs, nor did the arrival of the Internet. The ability to sign up, check balances online, and communicate with customers became automated, but the basic premises didn’t change. Points for transactions still reigned.
The arrival of the digital revolution in marketing, however, changes everything. Today’s marketer is far more likely to be a tech-savvy, digitally-fed business analyst than ever before, and that is greatly evolving what can be done in customer loyalty marketing. Rather than simply set up a points program, today’s marketer creates unique opportunities for customers to interact with the brand in ways that are ultimately valuable to both sides (and we can instantly measure just how much).
Test and Learn Constantly
Digital marketing opened a world of data-driven “test and learn” that will drive more change to customer loyalty in the coming five years than the last centuries combined. And it isn’t going to stop there. Marketers with powerful data integration platforms constantly reinvent what customer loyalty can be with ever-changing sources of data and ways of putting it to use discreetly or in powerful combinations. The race is on for each marketer to be connected and digitally fluent.
A digital world is a whole new frontier for customer loyalty marketing.
This post first appeared on the Loyalty Lab blog and has been lightly edited.