Procter & Gamble found that it is much easier to sell more to people who are already using its brand than it is to convert them from a competitor. However, customers are more demanding than ever and loyalty seems to be dead to them. From a customer perspective, it is also difficult for me to find a business that provides such a good product or service that I would never price-shop and declare my brand loyalty across my social network when facing so many choices. Such perspective generated Customer Loyalty Program.

Customer Loyalty Program is a serious business for airlines, hotel chains, and credit-card companies. But the one we are encountering in our day-to-day life is provided by markets, such as Shoppers Drug Mart and Save On Foods. The most common loyalty program methodology used by these markets is Simple Point System. Kendal Peiguss defined this system in one of his studies: Frequent customers earn points, which translate into some type of reward. Whether it’s a discount, a freebie, or special customer treatment, customers work toward a certain amount of points to redeem their reward. Where many companies falter in this method, however, is making the relationship between points and tangible rewards complex and confusing. Fifteen points equals one dollar, and twenty dollars earns 50% off your next purchase and so on. These are not rewards, they are headache. Barely anyone has time to calculate these points and be loyal to the business just because of these “loyalty rewards”, while businesses are still complaining that Customer Loyalty is dead.

Customer Loyalty is not dead. It is just that the businesses have not done enough to “wake it up”.