The movie “Up in the Air” stars George Clooney as a traveling hatchet man, a road warrior who measures his success by his frequent flier miles and pack of loyalty cards.
In the film, Clooney plays a detached elitist who meets his female counterpart in a hotel cocktail lounge where they romantically connect over loyalty cards, bantering over who has more points and privileges. As they plan their next encounter on the way to separate departure gates at the airport, the camera scans a poster of a smiling pilot and the message: We Value Your Loyalty.
Loyalty has come a long way in promoting branding and making it an American tradition. Those who are faithful to a brand are rewarded. That being said, the point of convergence for administering almost every type of loyalty program is a prepaid rewards card adorned in an infinite number of skins.
Loyalty has become valuable enough to make it important to prepaid. In turn, prepaid has served loyalty well by making the card the linchpin of today’s loyalty marketing programs.
Prepaid the Rage
Mark Johnson, CEO of Loyalty 360 - the loyalty marketer’s association, said, “Prepaid continues to be the rage for incentive and loyalty programs and there is significant interest in Multi-unit, MCC, coalition type prepaid programs.”
Multi-unit refers to promotion packages such as dinner and a movie, or a baseball game and a restaurant. MCC is a code used to categorize companies. Coalition type programs are when a number of companies come together in a partnership and share offers, opportunities and customers. Complementary companies partner to reward customers with a like currency, incorporating marketing, recognition and reward.
Customer loyalty programs rely heavily on prepaid products to dispense points, dollars, and other rewards via plastic cards, stickers, and tags, so much that loyalty programs have become passports. Customers receive status and the retailer gets an immediate influx of cash and returning customers.
When customers sign up for rewards programs, whether it be at Winn Dixie, CVS or American Airlines, it sets off a multi-touch marketing opportunity with many further avenues for offers, benefits, and cross promotions. Essential to the marketing plan, the program is built to collect data that provides marketers with the information they need to analyze and report on their customers’ behavior patterns.
“Prepaid programs can be tracked, providing redemption information and the like,” said Johnson. “They can also be issued instantly in certain programs at POS or online, thereby creating a trigger as to when it was earned by an employee or as part of a customer loyalty program.”
Delivering Loyalty
The points of delivery have expanded from in-store to direct mail to point-of-sale (POS) and the web. But as customers become overloaded with plastic loyalty cards as a means for account management, there has been a decline in acceptance.
The Marketing Workshop found that 40% of gift card recipients don’t use up their loyalty card’s value. The proliferation of loyalty programs has changed customer behavior. Many shoppers decline to sign up to avoid more plastic and many leave their cards at home, diminishing merchants’ marketing opportunities.
Does it help when customers are able to access their loyalty account via their mobile device? A recent Motorola study regarding mobile retails found that 31% of respondents said loyalty account access via handsets would be an improvement, enabling customers to optimize their incentives.
“Plastic is not needed any more now that we can mobilize gift and loyalty programs, and at the same time significantly improve the customer experience,” said Kevin Grieve, CEO, Mocapay. “The mobile platform provides a secure channel for delivering promotional text messages, mobile coupons, and a mobile receipt reminding the customer that he is only three meals away from a free sandwich.”
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