Brands need to reinvent their loyalty programs

Much has been written on the topic of loyalty and the use of promotional offers. Marketers use them to both acquire and retain customers. Unsurprisingly, most customers join and stay in a loyalty program because they receive special discounts, coupons, and other offers. For example, Kohl’s loyalty program proudly gives customers many options for collecting and stacking coupons and discounts on repeat purchases. Customers love this program. Marketers love this program because customers keep coming back. I doubt Kohl’s financial and marketing leadership feel this is a smart way to encourage long-term customer loyalty.

Many brands are trying to figure out how to motivate purchase without discounts. Recent data from Wise Marketer shows that the average U.S. consumer has approximately 13 to 15 different loyalty memberships across different retailers. Brands want to figure out how to wean customers off discounts, ongoing deals and promotions. Not all customers are able to wean off coupons. However, marketers are eager to find a way to customize their loyalty programs such that they can divert as many customer segments away from discounts as possible.

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