A Classic Loyalty Program: Stamps?

Customer loyalty has become a tech-centric field, marked by competitive innovation. In a world of data analytics and constantly changing platforms for digital outreach, you need to either get with new technology or stand aside.
 
All that said, however, it’s important not to lose sight of the CX side of loyalty. People have personal attachments to their favorite brands. If a consumer is won over by personalized outreach on social, it’s because she feels recognized as an individual. The email was just the medium, and the consumer was really won over by the moment’s emotional connection.
 
To sum it up, the origin of customer loyalty is a feeling that a customer experiences. There’s an unavoidable subjective element. To explore this side of loyalty, we’re going to take a break from looking at data and apps and take a glimpse at perhaps the oldest loyalty program of them all: trading stamps.
 
So, what the heck is a trading stamp? Usually, it was a small, perforated piece of paper with an adhesive-coated back and some sort of unique colorful design on the front. Companies in the late 19th and early 20th centuries would give out these stamps to purchasers, who would save them, typically in a booklet provided by the company. Once the booklet was filled, the shopper could redeem it for some product or reward offered by the company.
 
Think of it like stamp cards for fast/casual restaurants, but frankly, more expensive for the company and more engaging for the shopper. The engagement piece is key, as loyalty often has more to do with creating memorable experiences than saving money (consumers usually had to make many purchase before seeing any reward).
 
Before long, trading stamps even became a branded currency. In 1896, the Sperry & Hutchinson Company began offering stamps (called “S&H Green Stamps”) and booklets to merchants for a small price. The merchants would then offer them to their shoppers as an incentive, but the shoppers could only redeem the stamp booklets at a Sperry & Hutchinson store or through the brand’s catalogue. At these stores, cash wasn’t accepted; you had to have Sperry & Hutchinson stamps (each worth a fraction of a penny).
 
Refusing cash seems pretty crazy on the surface, but the Sperry & Hutchinson Company understood something at the root of many loyalty programs today: customers like to experience exclusivity. The company’s goods consisted of housewares and such, but only a S&H Green Stamp collector could get them.
 
S&H Green Stamps and its competitors got so popular that some states ended up banning them. Trade unions came to believe that they were an economic drain and campaigned against them. In a weird way, that’s a testament to the efficacy of the loyalty program. Customers were so engaged that it took the force of law to disconnect them.
 
I don’t want your brand’s loyalty program to get banned, but I do think we should look to trading stamps as something of a prototype. A look back can remind us that, while all the tech surrounding loyalty programs is necessary to stay competitive, subjective experiences are what really keep consumers hooked.
 

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