By: Erika Stevens

For the past few weeks since reading the ACI Worldwide statistics regarding loyalty programs I have been thinking about the need for loyalty programs to focus on their customers and create a culture of customer value with their loyalty marketing initiatives.  One of the reasons businesses start a rewards program is to recognize their already loyal customers.  Businesses know they have a certain number of customers that are loyal to them, but they do not know who those customers are and what they are buying.  Identifying these customers with the data from a loyalty program is the easy part.  The difficult part is figuring out what makes customers feel special and value the loyalty program. 

A couple of weeks ago I ran across a tweet from my loyalty feed that linked to a blog post written by Doug Stephens titled “The Enduring Allure of the Secret Handshake.”  The post centers on the idea that with everything becoming so inclusive on the web (Facebook, Groupon, Flickr) there is a need for more exclusive web communities.  Mr. Stephens believes this shift to exclusivity should extend beyond the web to retail loyalty programs as well, stating that consumers “need to feel special, unique and valued via exclusive membership.” While I agree that exclusivity is a way for some businesses to make their customers feel special it may not work for all businesses and loyalty programs. 

I completely agree that many loyalty programs miss the mark when it comes to actually making their loyal customers feel special.  I see the “need to feel special, unique and valued” as the allure of regular status – that desire to have everyone know your name (this may stem from a Cheers obsession).  As a consumer I long to be regarded as a regular at the places I consider myself a loyal customer.  For me this goes beyond just being a member of their loyalty program but speaks more to how I am treated by these businesses.  I want to feel special and for me that means they not only know my name they also know what kind of coffee I like at my local coffee shop.  It is not necessarily exclusivity that I need to feel special as much as comfort and familiarity. 

One way that loyalty programs can help businesses create an exclusive, regular type status is to provide targeted communications and specials to the members of your loyalty program utilizing the data you are collecting.  Targeted offers give businesses a chance to let loyalty program members know that they are paying attention to them and can anticipate their wants and needs.  Another way loyalty programs can create an exclusive experience is by having different tiers or levels.  In the credit card world this would mean having a gold or platinum card to show your status.  With a loyalty program you can create tiers that once a loyalty program member hits a certain amount spent or number of visits they are eligible for different rewards, offers and experiences. 

What are your thoughts?  Does exclusivity in loyalty programs help add customer value?  What programs make you feel special and valued?