The Paradox: Loyalty Programs


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I wonder if you might be one of our readers who can help me piece together a puzzle I’ve been wrestling with for the last couple of weeks…

A conflicting set of facts lies at the heart of the puzzle. On the one hand, loyalty programs have never been as popular as they are today. The average American belongs to 14 of them, as COLLOQUY research from a couple of years ago uncovered. Consumer participation rates in terms of collection and redemption seem to be healthy. Loyalty marketers have never been as qualified, with 25 years of experience behind them and a wealth of educational resources at their fingertips. Funding for our programs continues, presumably because each of us is able to prove a positive ROI at our companies each budget season.

On the other hand, data from Brand Asset Consulting, a unit of Young & Rubicam (, show that measures of brand trust, awareness, esteem, and relevance declined precipitously over the last decade. For example, Y&R reports that a majority (54%) of consumers readily agreed that they trusted major consumer brands in 1997. Ten years later, only 22% answered the same way. Across the board, the data from Y&R suggest quite convincingly that the core factors driving consumer loyalty are dying, or at least gasping for air.

And that was BEFORE the economic meltdown of the last 2+ years…

What do you make of this? How can we loyalty marketers be so busy, and presumably so effective individually at a micro level, and yet the macro picture looks like we’re failing to deliver the goods. After all, isn’t the point of a loyalty program to build loyalty? Isn’t the decline in a factor as central as trust an indicator of a big problem in the loyalty management business?

Or am I missing something? (It is quite possible…).

We’re supposed to have all the answers, but in this case, I’d sure like to hear yours.

What’s up?

What do YOU think?

Jim Sullivan
Jim directs the advancement of enterprise loyalty at COLLOQUY, an endeavor guided by his almost 30 years of managing in marketing, strategic planning, business development, innovation, and communications. Jim also assists with COLLOQUY's loyalty workshops, seminars and conferences, and serves as an academic liaison for colleges, universities and thinking institutions performing research on Enterprise Loyalty.


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