Shiny Pennies Beware: Our Latest Research Vets 13 Loyalty Program Tools

If Loyalty 1.0 was all about discounts, points, and miles, Loyalty 2.0 is all about differentiation and engagement. Competition for customer attention is steeper than ever, and companies are always looking for innovative ways to set their loyalty programs apart. But the loyalty landscape is chock full of shiny pennies (and some not-so-shiny pennies) claiming to offer a solution to this engagement problem. Throw rapidly evolving technologies, channels, and tactics into the mix, and marketers have a lot to consider when deciding where to make their bets.

If you’re nodding your head, you aren’t alone, and you are in the right place. Cutting through the clutter is exactly what our latest report, “TechRadar™ For Customer Intelligence Professionals: Customer Loyalty Programs, Q1 2013” (subscription required) is all about. We spent the past several months investigating the current maturity, business value-add, and future trajectory of 13 loyalty tools, including affiliate networks, card-linked rewards, coupons, location-based services, mobile applications, program websites, and social rewards. At a high level, we came away with two key observations:

  • Transactional tactics and tools still rule the roost. As I mentioned above, even though Loyalty 2.0 focuses on differentiation and engagement, most programs are stuck in Loyalty 1.0. Few marketers have successfully evolved their programs from transactional to emotional engagement to date. As a result, many of the tools and technologies featured — such as coupons and program websites — focus on meeting marketer’s current needs. There were a few however, such as coalition loyalty, gamification, and social rewards, that hint at deeper engagement or introduce a fresh model for loyalty programs.
  • Many tools are still in survival mode. Increased consumer adoption of emerging channels such as mobile and social and the media buzz around budding tactics such as card-linked offers and gamification hint at a changing loyalty landscape. But for the few companies that have adopted these tools, the value isn’t always clear-cut. Without widespread deployments and proven return on investment (ROI), marketers resist widespread investment, and many of the tools remain in a test-and-learn period while marketers wait for their bright and shiny features to be proven out.

Check out the full report for more details on each of the 13 technologies we evaluated, including investment level required, sample vendor lists, and the expected business value-add.