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My Take: The Discount Program in Disguise
Gary Lemke, Chief Customer Advocate   (January 23, 2013)
 
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Customers of retailers who offer a loyalty program are no more loyal than those of retailers who do not offer one. That's the conclusion of a survey of 60+ retailers asked about the effectiveness of their loyalty program. (Read more: Why Don't Loyalty Programs Connect With Consumers?.)
 
And why don't more loyalty programs connect with consumers? The answer is actually quite simple. Most loyalty programs really are not loyalty programs. While we use loyalty nomenclature, these programs are often nothing more than discounts and/or perks. Most do little to create genuine loyalty. Often the only significant difference is the margin chomping selling price.
 
If the average consumer is enrolled in 18 programs with many structured similarly, why would loyalty be rewarded for simply doing what the other guys are doing?
 
If your loyalty program has the characteristics of a discount and there is no measurable bump in loyalty, would you be better without a loyalty program? Take away the disguised discount program and the world opens up to real loyalty generating opportunities.
 
  What's your take?
 
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