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A Reflection on the History of Loyalty Programs and the Next Wave of Loyalty
Loyalty

A Reflection on the History of Loyalty Programs and the Next Wave of Loyalty

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It was neither a discovery nor an invention when loyalty programs first began. Before there was ever a loyalty program in existence, business owners had a select customer base that they treated differently from everyone else. Loyalty management is only another way of going about business to guarantee the longevity of the brand’s growth. Loyalty has always been a necessary component of doing business, and it has never been considered a hack.  

Customers received copper tokens as part of the first-ever loyalty program in the late 18th century, which they later exchanged for products. The concept of loyalty management gained popularity in the years that followed. Customers’ loyalty was encouraged through tokens, cards, and box tops.  

However, the main purpose of loyalty programs is to boost sales. In contrast to now, the proposition now centers on cultivating relationships and creating communities. This remarkable development over the years provides invaluable guidance for managing customer loyalty in an ever-evolving landscape.  

Let us embark on a journey to the distant past and explore how loyalty programs have created an immersive experience for customers worldwide. 

The beginning  

The copper tokens gave rise to the concept of providing customers with something in exchange for their continued business. But for shop owners, copper tokens were not a cost-effective option. A green stamp business called Sperry & Hutchinson distributed printed stamps to shops and supermarkets. Customers would receive these redeemable stamps from retail brands. Other businesses were inspired to develop their loyalty programs by the green stamps. Brands realized at the time that loyalty programs were a useful tool for generating more revenue from an existing customer base.  

The transition phase  

Customer loyalty programs have strong ties with customers. To address the gaps between expectations and execution, loyalty programs adapt in tandem with evolving customer behavior. Betty Crocker’s decision to launch “Box Tops” was a successful one since it followed the widely recognized success of green stamps.  Before it was discontinued in 2006, this rewards program operated for 77 years. Brands were able to stand out from the competition by using loyalty programs in innovative ways.  

A different memorable example is the popcorn company Cracker Jack. They introduced “in-pack prizes” as incentives. To rapidly satisfy customers, a toy surprise was included in each package of popcorn. In-pack and on-pack codes are used by Kellogg’s and Pepsi nowadays. Customers can instantly obtain benefits by scanning the codes.  

A rapidly changing world  

In the 2000s, technology advanced quickly, and this caused a change in how people worked. Customers could interact with brands in new ways while marketers learned how to manage customer data. 

One loyalty program that dates back to the 20th century is the AAdvantage program, formerly known as the Frequent Flyers Program of American Airlines. For the first time, a program required users to register their data before they could participate. Mobile apps started to gain popularity as a means of user communication in 2007. Starbucks, McDonald's, and Domino's soon introduced mobile apps for their loyalty programs. 

Customers now want seamless experiences from brands as their expectations have changed over time. Brands have upgraded their MarTech (marketing technology) stack to address this ongoing transition, with data acting as the change's catalyst. With the availability of first-party data, brands have been able to improve decision-making by using clever algorithms to process massive amounts of data and generate insights that can be put to use. 

How to navigate the next wave of loyalty 

Customers will receive automated offers and messages in real-time thanks to the next-generation MarTech stack. The ecosystem's integration of partners and collaborators also opens up a wide range of opportunities for every brand to combine sustainability and growth. Brands must take a comprehensive approach to deploy modern MarTech efficiently.  

The following are the three crucial transformational elements of the comprehensive approach to customer loyalty: 

Deep data analytics 

Evolution shows how the world has evolved as a result of data. But for the time being, and with next-generation loyalty programs, data must be put to use. Brands can ensure sustainable success by utilizing deep data analytics to comprehend, anticipate, and assess customer behavior. 

Technology platform 

The client experience is immediately impacted by a technological slowdown. Brands should be able to provide a seamless customer experience across all touch points thanks to the technological platform's features. 

Strategy-centered consultation 

For a brand, depending solely on best practices and market trends is insufficient. However, businesses can cut through the mess to have a lasting effect if they have a defined plan. Market leaders are now pursuing a strategic approach to creating the ultimate loyalty program as a result of the COVID-19 pandemic and increasing digitization. There isn't, however, an ideal loyalty program. It always comes down to developing and adjusting to the market when it's appropriate. 

Marketers are frequently perplexed when deciding which solutions are best for their companies because the MarTech ecosystem included nearly 10,000 providers in 2022. There are more prospects for businesses to pursue due to the growing issues. For particular issues that multinational corporations encounter, vendors have solutions. Marketers must carefully plan to find the best option. Making the best solution choice is made simpler for marketers by strategic consulting. 

Conclusion 

The modern world's progress will quicken, get more complicated, and become much more uncertain. Brands must take a comprehensive approach for now and the future. Using data analytics, technology, and strategy that are all focused on improving customer interactions will help you gain holistic loyalty. Ready for a loyalty program that will be there for you every step of the way? Check out Loyal-n-Save, our top-notch loyalty rewards program that gives your repeat customers the chance to earn reward tokens while engaging and retaining them. To get started today, contact us to set up a consultation and demo with one of our specialists!  

This article was written by Loyal-n-Save, an omni-channel customer loyalty solution for retailers looking to increase customer retention and new customer acquisition.
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Danielle Dixon
Written by Danielle Dixon

Danielle is a content writer at Loyal-n-Save. She specializes in writing about implementing loyalty solutions proven to help a company grow.

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