Zina‘s blog loyaty program discuss the effectiveness of the loyalty program for customers and companies. The aim of running loyalty program is clear for companies, as Zina stated  the difficulty of acquiring new customers substantiates the importance of loyalty programs for businesses as they attempt to amass brand loyalty. There are plenty of ways in achieving loyalty program as written by Zina. Using simple points system, a tier system or charge an upfront fee for vip benefits. How can company benefit from those methods? Differentiation is significan.

Starbucks is successful case for loyaty program and does give customer incentives to buy their product. Their use of mobile app which combines infrastructure decisions to facilitate marketing strategies unlike other traditional and simple reward methods, take advantages of modern and widely used technology-mobile electronics.

Nowadays, mobile electronics plays a such significant role in people’s life, it is actually recording our buying behabiors which could assit the company to research and adjust their marketing strategies. In additon, consumers only need to download an app so that they could receive all the discount or reward information and when they make a payment, the only need to show the app to recoud the purchasement. This is particularly convenient for modern people.

From the case of starbucks, we learn that the using of loyaty system should be differential to attract customers and be tightly link with the newest technology. Not all the methods can work efficiently. the potential loss caused by those should be stated. For example, the discount given to customer will result in a loss in profits.

The effect on customers, as the link in Zina’s blog shows American households hold memberships in an average of 29 loyalty programs, but are active (meaning earn or redeem at least one per year) in only 12 of them. Companies lose money on time and effort, and customers get no more value from the businesses to which they are “loyal.” Customers actually pay more for this, but can we say consumers make loss through this? maybe not because they gain utility from each product they purchase and the price they buy them is lower. Zina didn’t explain detailly why to say the loyalty program is “a wolf in sheep’s clothing” for customer, that is, she didn’t state the fact that those various of loyaty program forces people to purchase more.

Word count: 373

picture cited: google picture