The (Ugly) Truth of the Loyalty Point Program: What Marketers Say VS What Customers Hear

2TRUTHTHE

OF THE LOYALTY POINT PROGRAM

(UGLY)

What Marketers Say What Customers HearVS

2NICESKY AIR

WITH

The traditional loyalty program

scopes around deferred gratification; slow

accumulation of points leading to large

redemption events.

Nowadays, several big brands

implement a “points ubiquity” approach; making the program

broader and increasing the number of

collection points.

ICY

NICESKY AIRWITH

icy

Nowadays, several big brands

implement a “points ubiquity” approach; making the program

broader and increasing the number of

collection points.

ICY

NICESKY AIRWITH

icy

BUT DOES IT REALLY

CREATE CUSTOMER LO

YALTY?

1 The Points Accumulation

TRUTH (UGLY)

1 Give customers

MORE WAYS to accumulate points

What marketers say:“ icy

So you can get

to

the redemption

point faster.

Give customers

MORE WAYS to accumulate points

What marketers say:“ icy

icy

Give customers more ways to

ACCUMULATE points

What customers hear:”

icy

Give customers more ways to

ACCUMULATE points

What customers hear:”I don’t h

ave to b

uy from

you to g

et points

.

... there’ll no longer be a strong bond between

your brand and the customers.

If most points are earned outside

at the partners network, ...

TRUTH (UGLY)1

2THE REWARDS

TRUTH (UGLY)

2 NICESKY AIRWITH

icy

Earn a lot of points and

get BIG rewards

What marketers say:“

NICESKY AIRWITH

icy

Buy from us an

d our partners

to collect

a lot of points

and redeem bi

g rewards.

Earn a lot of points and

get BIG rewards

What marketers say:“ NICESKY AIRWITH

icy

MyCoffee

Earn a lot of points

and get BIG rewards

What customers hear:”

icy

MyCoffee

1Forget

the big rewards

.

It’ll take me f

orever to get

them.

Earn a lot of points

and get BIG rewards

What customers hear:”

1...even though

the rewards are big.

Geared towards the heavy buyers,

the long tailed points program causes the less heavy buyers to lose their interest in

reaching the redemption points, ...

TRUTH (UGLY)2

TRUTH (UGLY)

LoyaltyThe

Stay with

OUR LOYALTY PROGRAM and you’ll get privileges

What marketers say:“NICESKY

AIR

NICESKY AIR

NICESKY AIR

Stay with

OUR LOYALTY PROGRAM and you’ll get privileges

What marketers say:“

Our loyalty prog

ram offers gre

at privileges

through our bra

nd and partner

s network.

icy

Stay with our loyalty

program and you’ll get PRIVILEGES

What customers hear:”

2It’s cool

to be a memb

er of

your loyalty pro

gram.

Stay with our loyalty

program and you’ll get PRIVILEGES

What customers hear:”

2...keep their

membership for the status, not the brand

loyalty.

Many members of big loyalty programs,

especially the Frequent Flyer

programs, ...

TRUTH (UGLY)3

icy

The “points ubiquity” approach, instead of driving

more loyalty towards the brand, turns the loyalty program into merely a

points exchange scheme… which doesn’t create true

customer loyalty.

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Watch the full video of

Common misconceptions

of loyalty program

by Regan Yan here

www.digitalalchemy.asia

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