There is a lot of action in the loyalty space now-a-days. Many entrepreneurs have identified that one thing missing from the omnipresent daily deal sites out there is helping businesses build customer loyalty.
Loyalty programs are nothing new. They’ve been around in some way, shape, or form since commerce began. But perhaps one of the first formal loyalty programs was the Green Stamps program, created by Thomas Sperry and Shelly Hutchinson back in 1896. The basic premise: the more a customer spent at any participating business, the more stamps she receives, and the sooner she would be able to redeem them for rewards.
However, there are loyalty programs sprouting up that have gotten away from this fundamental concept. More and more we are seeing reward programs that don’t take into consideration the transaction itself. For instance, if two friends walk into a merchant and “check in” (the digital version of a loyalty punch card), they would both be rewarded the same amount, even if one of them may spend $50 there and the other, nothing.
Does it make sense for a business owner to equally reward these two people? The customer spending $50 dollars will feel hoodwinked if she knows her budget conscious buddy received the same level of reward. Similarly, as a merchant, which of these two customers would you most like to incentivize to come back to your business?
The last thing any merchant wants is to make an unprofitable customer loyal. Yet, I would argue that the structure of many loyalty programs out there lend themselves to that outcome.
At Ox&Pen, we know there is value in driving someone to a business, so providing incentive for the member to “check in” and get them through the door is in the merchant’s best interest… but it’s just one piece of the puzzle. The goal for that business owner is to then have that member make a purchase… the bigger the better.
Our universal loyalty network is predicated on just this. For each dollar spent, our members receive points that can be redeemed ANYWHERE in our network. The more they spend, the more points they receive. This works out well, because our merchants like it when our members spend money at their establishments… so everyone wins!
While the technological landscape is completely different since the Green Stamps program initiated in 1896, there are timeless aspects of loyalty that are as relevant today as they were back then. Regardless of whether you receive those points via green paper stamps, or scanning a QR code using our smartphone app that then banks your points automatically, the objective is the same… I think Sperry and Hutchinson would agree.