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The Widening Gap of Loyalty Programs

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Travel and other loyalty programs are going through challenging times. Programs that floated along for decades, blissfully counting up points based on spend, transactions, nights or miles are suddenly finding themselves in an increasingly mobile, connected world that allows for something more.

The problem isn’t that traditional loyalty programs haven’t answered the call. The real challenge arrives unexpectedly when smarter companies come up to speed quickly with modern platforms and programs that are more engaging and effective.

The North Face

Look no further than The North Face, where the VIPeak program rewrites the way customers are engaged around their passions and not just their purchases. The North Face knew that staying competitive in the changing landscape of business required taking a new look at the customer and what creates for them a more enjoyable and meaningful experience. This is ultimately the only way to create a greater lifetime customer value for the brand.

Who’s next?

Companies that understand this will change course, but it won’t be an easy thing to recognize. Existing loyalty programs are self-reinforcing and continue to deliver value to brands even as customers shift to more engaging experiences elsewhere. The temptation is to double down on existing programs with the theory that more effort will deliver more value—but it won’t.

As consumers experience programs like that of The North Face, the luster of simply earning points based on purchases goes away. New and innovative programs are opening the customers’ eyes and setting new expectations. Loyalty is the new field of competition and no longer a place where each brand matches the next step for step.

This means loyalty has become something much more dynamic than in the past. It has to evolve with the consumer and the competition. It stops being a hard-coded application, implemented and changed with teams of technology people, and becomes a platform that faces the business—flexible, nimble and cloud-based. It looks a lot like Loyalty Lab Reward.

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Published at DZone with permission of Christopher Taylor, DZone MVB. See the original article here.

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