The loyalty industry is changing dramatically each and every day.  During 2010, we have witnessed many new and innovative developments in loyalty programs across all industries.  Some highlights of these developments include the following:

• In retail there has been significant growth in tender-neutral loyalty programs, a move away from credit card based programs due to both the new credit card rules and a need to grow the member base beyond the credit card base to the broader customer base.

• A significant increase in partnerships for loyalty program offerings.   An example is the recent entry of Catalina Marketing in the convenience store space with Outsite Networks as their partner.   We also see this trend continuing in other industries such as the hotel and retail industries.   This provides more value to the loyalty offering and expands the potential base of customers and prospects that may want to join the enhanced program.

• A dramatic increase in the social media space has resulted in new ways to generate loyalty.  The challenge is integrating real purchases that generate real points with the points and posts generated by social media.  Marketing programs including Facebook, Twitter, and Foursquare are powerful viral marketing tools.  We are just beginning to see companies utilizing social media to leverage their loyalty programs by offering extra points for posting on Facebook or Twitter as well as offering rewards for checking in on Foursquare. 

• Communication to members is also evolving with a continued decrease in direct mail communications and continued heavy use of email.  Mobile messaging (SMS) is beginning to surface as a significant tool for program communication, though there continues to be concern from consumers about the impact of too many messages and ads delivered on their cell phones.

Looking into 2011, I see the following likely trends surfacing in the loyalty arena:

• Continued conversion of retail credit card based loyalty programs to tender-neutral programs.

• This may be the year for true coalition programs to surface, with the ongoing expansion of loyalty program partnerships and the increased availability of technology tools to cost effectively deliver the programs.

• Continued increase use of mobile devices to deliver valuable information and offers for loyalty programs; especially initiatives such as location-based offers when you are close to or inside the retail location.

• More “fun” added to loyalty programs to catch the attention of the consumer and separate the message from the noise.  This could also include a random award structure that operates similar to a sweepstakes or ongoing small perks.

• Enhancement of soft benefits to programs such as the private shopping events hosted for Best Buy’s Reward Zone members where they not only received double points, but were served a meal.  Reward Zone members were also provided unique buying opportunities by private invitation-only this Holiday season.

One thing I know for sure is that the coming year will be full of surprises.  For any business that currently offers a loyalty program or is considering the option, the time is now to move forward with the explosion of options and creativity that can be delivered thanks to the new tools and technology in the market.

Have a great 2011 and good luck as you build a strong and innovative loyalty strategy!

Brent Harms
Founder & CEO
Tecmark, Inc.