Loyalty Program - Wikipedia, the Free Encyclopedia

Loyalty program - Wikipedia, the free encyclopedia

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Loyalty program From Wikipedia, the free encyclopedia Main page Contents This article needs additional citations for verification. Featured content Please help improve this article by adding reliable references. Current events Unsourced material may be challenged and removed. (November Random article 2006) Donate to Wikipedia Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal Interaction buying behavior — behavior which is potentially beneficial to the firm.[1] Help In marketing generally and in retailing more specifically, a About Wikipedia loyalty card, rewards card, points card, Community portal advantage card, or club card is a plastic or paper Recent changes card, visually similar to a credit card or debit card, that Contact Wikipedia identifies the card holder as a member in a loyalty Toolbox program. Loyalty cards are a system of the loyalty business model. In the United Kingdom it is typically called Print/export a loyalty card, in Canada a rewards card or a points card, Languages and in the United States either a discount card, a club card Deutsch or a rewards card. Cards typically have a barcode or Español magstripe that can be easily scanned, and some are even chip cards. Small keyring cards (also known as keytags) Français which serve as key fobs are often used for convenience in .carrying and ease of access עברית

Lëtzebuergesch A retail establishment or a retail group may issue a loyalty Various loyalty cards Nederlands card to a consumer who can then use it as a form of 日本語 identification when dealing with that retailer. By presenting Polski the card, the purchaser is typically entitled to either a discount on the current purchase, or an Português allotment of points that can be used for future purchases. Hence, the card is the visible means of Русский implementing a type of what economists call a two-part tariff. Suomi The card issuer requests or requires customers seeking the issuance of a loyalty card to provide a Svenska usually minimal amount of identifying or demographic data, such as name and address. Application forms usually entail agreements by the store concerning customer privacy, typically non-disclosure (by the store) of non-aggregate data about customers. The store — one might expect — uses aggregate data internally (and sometimes externally) as part of its marketing research. These cards can be used to determine, for example, a given customer's favorite brand of beer, or whether he or she is a vegetarian. Where a customer has provided sufficient identifying information, the loyalty card may also be used to access such information to expedite verification during receipt of cheques or dispensing of medical prescription preparations, or for other membership privileges (e.g., access to a club lounge in airports, using a frequent flyer card).

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Contents 1 History 2 By continent and country 2.1 North America 2.1.1 United States 2.1.2 Canada 2.2 Oceania 2.2.1 Australia 2.2.2 New Zealand 2.3 Europe 2.3.1 United Kingdom 2.3.2 Republic of Ireland 2.3.3 Germany 2.3.4 Switzerland 2.3.5 Italy 2.3.6 Hungary 2.3.7 Spain 2.4 Asia 2.4.1 Hong Kong 2.4.2 Iran 2.4.3 Indonesia 2.4.4 India 2.4.5 Malaysia 2.4.6 Singapore 2.4.7 Taiwan 2.4.8 Shanghai 3 Program management 4 Criticism 5 See also 6 References

History [edit]

For information on historical loyalty programs, see Loyalty marketing history.

By continent and country [edit]

North America [edit]

United States [edit] In the U.S., several major supermarket and fish market chains and at least one major pharmacy require the cards in order for customers to receive the advertised loyalty price. These include Smith's, Kroger and Safeway (each through both their own name and many of their regional chain names), Albertsons, Winn-Dixie, Harris Teeter, Ingles, Giant Eagle, Tops, and CVS/pharmacy. Cards from other, even competing chains will generally work at other stores to receive the advertised loyalty price, because only a few companies make the cards, but stores generally will not allow this since it will not allow a customer to be tracked, though a customer can make it work if they use a self- checkout. Even though this will work to receive the advertised loyalty price, any points and/or future discounts someone may be trying to earn from using the card at another store will not be added since a different chain would use a tracking system with a database independent of the other chain.

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However, some stores may also allow a customer to use the store's card if a customer does not have theirs on hand (Kroger does not allow this although customers can enter their phone number to bring their card up if they forget it, or have another customer's phone number entered) or if the customer is new and agrees to sign up right away. Many of the stores allow accumulation of fuel discounts. Some have tie-ins with airline frequent-flyer programs, and some agree to donate a percentage of sales to a designated charity. Most notably, Wal-Mart does not have a loyalty card plan (though someone who purchases a gift card can generally get a 3 cent discount per gallon of gas at the fuel stations located on Wal-Mart premises). The practice is also common among book and music retailers, from large chains to independent retailers. In some instances, the customer purchases the card and receives a percentage discount on all purchases for a period of time (often one year), while in other instances, a customer receives a one-time percentage discount upon reaching a specified purchase level. (For example, a bookseller's loyalty card program might provide a customer with a 10% off coupon once the customer has spent $200.00 at the bookseller.) Best Buy's loyalty program similarly offers points redeemable for dollar- amount discounts after accumulating a set number of points along with other discounts from time to time, though the card is not required to receive their advertised price in most cases. Independent hardware stores such as Ace Hardware and True Value added customer loyalty programs in order to compete more effectively against larger chains as well as gather customer data. In addition, office supply retailers Staples, Inc. and Office Depot started issuing club cards in 2005.[citation needed] Almost all of the major hotel chains (Best Western, Choice Hotels, Holiday Inn, Marriott, Super 8 Motels, etc.) have similar cards that allow guests to earn either points (redeemable for discounts, future stays or other prizes) or airline miles (Hilton's HHonors program allows guests to earn both points and miles on the same stay, the only program to date that does so). All major US Airlines also offer rewards credit cards. Other travel related reward programs include SeaMiles, with points that can be redeemed for cruises. For now, most American retailers have not implemented club cards. In a few cases (e.g., Federated Department Stores, Kohl's) this is because the retailer already issues its own credit cards, and thus already has a direct relationship with the consumers most likely to shop at its stores. Also, many retailers are simply not large enough to justify the cost of creating, promoting, and operating a club card program. Some supermarket customer loyalty cards inadvertently work at the scanners of other non-affiliated stores. For example, a Kroger card has been successfully recognized as a respective loyal club member at stores in the Food Lion, Pathmark and Winn-Dixie chains.[citation needed] An example of a consumer-centric card (without cost, registration, or information-tracking) is the MyJoeCard, which advertises the business members through the website in Kansas City, Tulsa, and Denver. Max & Erma's has a loyalty program called Good Neighbor Rewards. Guests are rewarded based on their number of visits by either 5%, 10%, or 15%. Additionally, guests are periodically given additional rewards by way of free items added to their loyalty card electronically. Truck stop chain Pilot Travel Centers has a loyalty program for truck drivers called Driver Payback Points, which rewards drivers for fueling up by giving them points that can be used for purchase inside the store. Although it can be used for general merchandise, the program is specifically targeted to be redeemed at the restaurant chain located inside each location. Locations with McDonald's vary, due to McDonald's leasing space from Pilot and operating those separately. While some do give a 10% discount for having the card while others won't accept them at all, none of the McDonald's locations at Pilot redeem the points. A few states have begun regulating club cards. For example, supermarkets in the U.S. state of California are subject to the Supermarket Club Card Disclosure Act of 1999.[2] Some grocery chains

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have dropped their loyalty card programs. Rainbow Foods in Minnesota ended its loyalty card program after being acquired by Roundy's, leaving Minnesota with no major grocers that use such cards. There are a few online loyalty programs that offer rewards for being a loyal shopper. The largest of these are Memolink, Mypoints, FatWallet and Ebates. Some online loyalty programs focus on "other- directed" consumers, these include Upromise, Schoolpop, The BSP Rewards Network and iGive.com. Several banks also have rewards programs, including three of the Big Four (Wells Fargo being the lone exception.), CapitalOne, and Citizens Financial Group. PNC Financial Services launched a program in 2009 as a direct result of its acquisition of National City Corp., which National City did have along with a mortgage division (two things PNC didn't have) before the PNC deal. Recently, a lot of attention has been paid to the loyalty programs due to companies like Foursquare, Cardmobili and Shopkick providing new ways for consumers and businesses to communicate. All three companies focus on using smartphones such as the Android and iPhone - Foursquare partnered with AMEX to provide Foursquare points when using an American Express card,[3] and Shopkick gives users points for scanning barcodes of popular products at locations like BestBuy.[4]

Canada [edit] The oldest loyalty program in Canada is probably Canadian Tire money, in which the Canadian Tire company gives out coupons which look like currency.[5] The Air Miles reward program is Canada's largest loyalty program - Air Miles can be earned at more than 100 different sponsors and there are almost a thousand different rewards to redeem for. The Bank of Montreal offers an Air Miles- sponsored program. Aeroplan is a loyalty program that has been around for a while – 25 years. Originally beginning as Air Canada’s frequent flier program, in 2002 it was spun-off. Today Aeroplan is owned by Groupe Aeroplan Inc., has over 70 partners, representing more than 150 brands in the financial (CIBC’s AeroGold Visa), retail (miles can be earned at Sobeys) and travel sectors. Another large Canadian loyalty program that has been around for a long time is the HBC Rewards/Club Z program first started by Zellers. Loblaws offers the President's Choice Financial program where users of the service get PC Points towards free groceries. Some retailers run their own rewards programs, such as The Body Shop's Love Your Body Card, Shoppers Drug Mart's Shoppers Optimum Card and Staples Business Depot's easyRewards Savings Card (formerly Dividends). The iRewards program is Canada's largest loyalty program for booklovers, offering everyday discounts and special coupons at Chapters, Indigo Books and Music, Coles, SmithBooks, the World's Biggest Bookstore and chapters.indigo.ca. PetPerks is PetSmart's reward program; members get a pre-determined discount on any item in the store that displays a PetPerks tag under the regular price tag. Many programs are free to join, while others charge an annual fee. Almost every gas station in Canada offers some sort of program such as Esso Extra at the Esso gas stations, Petro Points at Petro-Canada, Save-On-More at some Chevron stations in BC, Canadian Tire money at Canadian Tire gas stations, or a coupon that grants the customer 3.5 cents off per litre of fuel purchased at Sobeys Fast Fuel locations that can be used at a Sobeys banner store. Loblaws, Atlantic Superstore, and Real Canadian Superstore grant a 5 cent a litre coupon that can be used at their stores. Sunoco's CAA reward offering ends at the end of 2007, to be replaced with Sunoco's own Performance Points reward program. Many hotel chains also offer some sort of loyalty program.

Oceania [edit]

Australia [edit] The largest loyalty program in Australia is FlyBuys, established in 1994 and owned by Coles.[6] It has more than 10 million cardholders in over 5.5 million Australian households.[7] In a survey

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conducted by Monash University in December 2009, FlyBuys was ranked as "most worthwhile joining" among major Australian loyalty programs.[8] Rival retailer Woolworths launched its Everyday Rewards fuel discount card nationally in 2009 and by August 2010 had 5.1 million cardholders, with 2.7 million linked to the Qantas frequent flyer program.[9] Among other Australian retailers, the largest programs are Myer's MYER one program (department store), the Priceline Club Card (health, beauty, home), Amcal Club (pharmacy), Millers Retail Club (apparel), and the BB Retail Capital (formerly Brazin Limited) Pulse Rewards program (Virgin, HMV, Sanity, dusk, Bras n Things, and SX sunglasses). Pulse has more than a million members.[10] All major Australian banks offer credit cards with reward programs. Many offer points collection with the Qantas frequent flyer program or conversion to points for Virgin Australia's Velocity Rewards program. The largest online rewards program is RewardsCentral. Perkler is a website launched in Australia in August 2009 which lists 1,800 loyalty programs and their 280,000 associated perks.

New Zealand [edit] The largest loyalty program in New Zealand is Fly Buys. Other significant programs include the New Zealand Automobile Association AA Rewards Card and Countdown supermarket's Onecard.

Europe [edit]

United Kingdom [edit] The loyalty card market in the UK is one of the most significant in the world, with most major chains operating some form of reward system. Passcard has been claimed to be the first reward scheme or discount card, created around by Gary Wilson in 1981[citation needed] and later known as Passkey.[11] One of the first loyalty cards backed by a major chain is believed to be the Sainsbury's Homebase Spend and Save Card in 1982.[citation needed] Of the "big four" supermarkets, only Sainsbury's and Tesco operate loyalty cards. Both Nectar and Tesco's Clubcard scheme have been criticised for not offering value for money.[12] When Clubcard or Nectar points are used for money off supermarket shopping, they roughly equate to a 1% discount, although offers can increase this discount by as much as 4 times for certain rewards. Some retailers with banking operations also award points for every pound spent on their credit cards, as well as bonus points for purchasing financial services. A report in The Economist suggested that the real benefit of loyalty cards to UK outlets is the massive database potential they offer.[13] After trials in 1994, Tesco launched its Clubcard program, the UK's first nationwide supermarket-only loyalty card scheme, in 1995 with dunnhumby. Sainsbury's launched its Reward Card in 1996. This was replaced by the Nectar card in 2002, which was launched in partnership with other major brands. Boots The Chemist first began planning a loyalty card in November 1993, but building a CRM- focussed loyalty program. With an investment in excess of 30 million GBP, the Boots Advantage Card, launched in 1997, is / was the largest smart card retail loyalty card scheme in the world, and the third-largest retail loyalty scheme in the U.K. in terms of cards issued. The Advantage scheme currently has 16.4 million cardholders using the card online and in store and at 3rd party retailers. The patronage dividend rewarded the loyalty of the owner members of Britain's retail consumer co- operatives since the Rochdale Pioneers of the 1840s. Paper record-keeping transformed in the 1960s into a trading stamp scheme managed by the Co-operative Wholesale Society (CWS), which was gradually withdrawn as margins declined. The loyalty card concept was used by some co- operatives to restore dividend payments at the turn of the 21st century, notably by the CWS's "Dividend" card, which was replaced by The Co-operative Membership card program, adopted by

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several larger co-operatives. Safeway's ABC Card was discontinued in 2000.[14] Airlines, Hotels and other loyalty schemes also offer cards. Marks and Spencer and the John Lewis Partnership have credit cards which give vouchers in return for spending, and do not issue separate loyalty cards. GAME has a reward card scheme for which every pound spent a customer is rewarded 10 points; for every 1000 points that one collects, one gets £2.50 to redeem in the store, or online. Preorders earn a customer 20 points per pound. HMV has a reward card called purehmv which allows the customer to claim a variety of rewards, including in-store discounts. The UK's largest retail bookmaker Ladbrokes launched the Odds ON! loyalty programme in late 2007, the first retail betting loyalty scheme in Europe. Customers earn points on each bet which can be redeemed for bonus jokers and free bets. Ladbrokes Poker also operates a loyalty program for its online poker players where players are able to exchange their poker points for gift & prizes. Maximiles[15] is an online coalition program claiming 1.6 million members in the UK.[16] Maximiles also operates online programs in France, Spain and Italy.[16] UK Websaver is a loyalty card designed to encourage communities to use local businesses. Best Buy recently launched their first store at Thurrock, Essex. Coinciding with the store launch, they also launched the customer engagement program called My Best Buy. My Best Buy is a tiered, digital loyalty and customer engagement program that is designed to build a life-long relationship with the customer by providing a personalized experience through which they can manage their digital and technology needs.

Republic of Ireland [edit] In the Republic of Ireland loyalty cards have been in operation since 1993, when Superquinn introduced its SuperClub loyalty card scheme. This is regarded as having been the prototype for such schemes in Europe. However, loyalty cards did not expand until 1997, when Tesco Ireland introduced its Clubcard scheme, shortly after its purchase of Power Supermarkets. This was essentially a simple expansion of the UK scheme (see above) - cards for this are physically identical to those used by Tesco in the UK and they can be used in both countries. Dunnes Stores responded with the introduction of their own ValueClub scheme in June 1997. Today these are three main schemes operating in Ireland, although ValueClub has been withdrawn from Dunnes' Northern Ireland stores. All five major petrol station chains in the country operated a scheme during the late 1990s - Esso had "Tiger Miles" (with Tesco ClubCard points offered as an alternative), Maxol had "Points Plus", both of which operated on the principle of getting items from a gift catalogue, with Shell using Dunnes' scheme, Texaco using the SuperQuinn system, and Statoil operating a cash-back system, "Premium Club". Due to increasing oil prices and tightening of margins, all of these schemes ended by the end of 2005. Tesco Ireland's petrol stations still, however, give Clubcard points. GAME, a major computer game and hardware retailer also operate a cashback card scheme, which was merged with Electronics Boutique's programme following the separation of their northern European stores into the hands of GAME. The scheme returns one-fortieth of the spend, more than twice as generous as Tesco.

Germany [edit] The largest loyalty program in Germany is Payback, which was launched in 2000. According to a study in August 2007 by GfK,[17] 61% of German households have a Payback card. It listed the HappyDigits program as having a 42% share, with the Shell ClubSmart program as third most popular with 13%. In March 2008, the coalition program DeutschlandCard was launched by Arvato. As at March 2009 it had more than 4.5 million active cardholders.

Switzerland [edit] http://en.wikipedia.org/wiki/Loyalty_program[7/19/2011 8:17:12 AM] Loyalty program - Wikipedia, the free encyclopedia

Loyalty programs are popular in Switzerland, with the two main supermarket chains, Migros and Coop prominent. The M-Cumulus card can be used at the Migros supermarkets, Ex Libris (books, DVD's), SportXX, and other retailers. The Coop Supercard earns points on purchases at Coop and a variety of other associated stores. Other stores such as Interio, a furniture retailer, are also joining the market with loyalty cards and store-based incentivised credit cards. In recent years, online loyalty programs have also started to target the Swiss. First to make an offering in Switzerland was German- based Webmiles. Claiming to be Switzerland's first online bonus program, Bonuspoints was launched in early 2008 and offers incentives for shopping at 70 different online stores.

Italy [edit] Loyalty programs are popular in Italy, with the two main supermarket chains, Esselunga and Il Gigante, leading the field with their offerings. Other stores such as Interio, a furniture retailer, are also joining the market with loyalty cards and store-based incentivised credit cards.

Hungary [edit] Two coalition loyalty programs in Hungary are SuperShop and Multipoint. SuperShop was established in April 2000 and is backed by premium partners hu:SuperShop Spar, OBI, OMV, Photo hall, Burger King.

Spain [edit] VOILÀ Hotel Rewards launched in June 2008 with "Husa Plus ," a co-branded loyalty program for Husa Hoteles.[18] The Husa Plus program is currently offered at approximately 145 Husa Hotels, primarily located in Spain. In the transport sector, ALSA (transport leader company in Spain) Customer retention strategy is done mainly through Bus Plus, the first loyalty program in the field of road transport in Spain, launched originally in 2005.

Asia [edit]

Hong Kong [edit] Hong Kong offers many loyalty programs which include Octopus Rewards, which started as a chip based smartcard for transport and now, the Octopus cards can be used to earn points in certain shops, including McDonald's and Wellcome supermarket. Another loyalty program is for travelling on the heavily patronaged (3.65 million/day) MTR railway system in Hong Kong, known as the MTR Club. In terms of shopping or purchasing groceries, one can the MoneyBack card at PARKnSHOP supermarkets. Asia Miles, which was part of Cathay Pacific.

Iran [edit] In 1995, Iran Credit Card Group launched Zarrin Card (or Advantage Card), Iran's first loyalty program.[citation needed]

Indonesia [edit] Centro Friends card is a loyalty card for Shoppers of Centro Department Stores. The Body Shop People card is the loyalty card for The Body Shop stores in Indonesia. Other notable programs in Asia include KrisFlyer, the Singapore Airlines rewards program.

India [edit] i-mint is India's largest coalition loyalty program, claiming 9 million members[19] and 1500 network partners, with 120 billion INR of sales generated through i-mint-cards in 2009.[20] In June 2010, German loyalty program Payback took a controlling interest in i-mint.[20] Hero Honda's passport program claims over 3 million members.[21] BPCL's PetroBonus fuel card program has 2 million

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members.[22] Indian Oil's fleet card program XTRAPOWER and retail program XTRAREWARDS claim a combined customer base of 2.5 million.[23] The Maruti Suzuki AutoCard, launched in association with Citibank and Indian Oil had 370,000 cardholders as at October 2008.Kingfisher Airlines FFP King Club had 2 million members as on October 2010.It is the most generous FFP in Airlines[citation needed] Shopper's Stop has been offering a loyalty programme called First Citizen for well over a decade for regular customers. Other retailers like Lifestyle (The inner Circle loyalty Programme) & Reliance Retail also have their own loyalty programmes.

Malaysia [edit] In Malaysia, the BonusLink program was introduced in a joint venture between Shell, Parkson, Maxis and MBF. The BonusLink program is coalition with earning and redemption partners allowing members to earn points at a number of Malaysian retailers. Genting Highlands Resort has its own loyalty card, WorldCard (same as mentioned below) that is primarily used to gain points in Genting Highlands' Resorts and Attractions. However, it can also be used for Starbucks, Coffee Bean and Häagen-Dazs and it is valid in three countries, namely Malaysia (where Genting Group is based), Singapore and Hong Kong. Jusco also has its own loyalty card, known as J Card. In early 2008, ValueClub Marketing and Services Sdn. Bhd. launched it V-Kad at North Malaysia especially in Penang state. V-Kad has actively joint by various industries such as F&B, fashion, saloon and optics. It provides V-Kad members to collect V-Points to redeem gift and exchange services with the participating merchants.

Singapore [edit] The three largest loyalty programs are LinkPoints, WorldCard (aggregate program of Genting Resorts, Suntec City Mall, Star Cruises & Indigoz)and SAFRA Card. The LinkPoints Programme has more than 1 million members and over 600 participating merchant outlets.

Taiwan [edit] The French retailer, Carrefour has recently introduced a new loyalty scheme whereby customers can earn and redeem points for purchases made in the store, and also earn additional points for all purchases made using a Carrefour branded credit card. The largest online rewards program is EmailCash.[citation needed]

Shanghai [edit] The Smartclub program allows all Shanghai residents to earn SmartPoints free, each time they take the subway, bus, or taxi. Those SmartPoints can be combined with points earned at McDonald's, eLong, Sport100, cinemas, bookstores, and other SmartClub partner retailers.

Program management [edit]

Across the globe loyalty programs are increasingly finding the need to outsource strategic and operational aspects of their programs, given the size and complexity a loyalty program entails. Program managers are typically agencies with specialist skills in loyalty consulting, creative and communication, data analytics, loyalty software, and back end operations. The advent of Web 2.0 and SaaS online-based services has provided lower-cost options for small businesses to offer and manage their own loyalty programs. Moreover, there are many free and open source alternatives such as UserInfuser to manage user awards and incentives.[24] Loyalty cards are becoming mobile (i.e. Cardmobili, Members Discount Card, CardStar, CardBank and Loopt).[25]

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Criticism [edit]

This article needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (February 2007)

Companies complain that these loyalty program discount goods to people that are buying their goods anyway, and that the expense of doing these programs rarely pays. Other critics see the lower prices and rewards as bribes to manipulate customer loyalty and purchasing decisions, or in the case of infrequent-spenders, a means of subsidizing frequent-spenders. Commercial use of the personal data collected as part of the programmes has the potential for abuse. It is highly likely that consumer purchases are tracked and analyzed towards more efficient marketing and advertising (in fact, this can be one of the purposes of the loyalty card.) To some, participating in a loyalty program (even with a fake or anonymous card) funds activities that violate privacy.[26] There has also been concern expressed regarding RFID technology being introduced to loyalty cards.[27] Loyalty and credit card reward plans might be viewed as modern day examples of a kickback. An employee who needs to buy something (such as a hotel room or an airline flight) for a business trip but who has discretion to decide which airline or hotel chain to use has an incentive to choose the payment method that provides the most credit card rewards or loyalty points instead of minimizing cost for the organization.