In its most recent issue, Colloquy magazine, published by LoyaltyOne, is celebrating its 20th anniversary with a look back at some of the most significant loyalty innovations of the past two decades.
A few of the highlights from a 1990 to 2010 timeline of milestones in the evolution of loyalty marketing include:
1990: The proliferation of the branded rewards credit card begins as AT&T introduces its AT&T Universal Card
1991: The first example of large-scale, Word of Mouth rewards marketing occurs with MCI’s Friends & Family Program, which encourages customers to recruit new members in return for awards
1992: The rise of two-tier pricing – a watershed moment for grocers- takes place when Vons supermarkets offer in-store savings to club card members
1994: Airline miles become profit centers as carriers discover their program miles can be used as promotional currency by hotels, restaurants, credit card and car rental companies
1997: The gaming industry fully embraces loyalty marketing as Harrah’s Total Gold debuts
2001: America’s first coalition program to gain national attention arrives through Upromise, which partners with corporate giants to help students plan, save and pay for college
2005: Big U.S. banks begin to embrace debit loyalty with Bank of America’s Keep the Change, a program that rounds up members’ debit purchases to the next dollar and deposits the difference
2006: Word of Mouth is harnessed by loyalty marketers in order to transform consumers into brand ambassadors after the broad acceptance of social platforms, such as Facebook and LinkedIn
2009: Smartphones promise loyalty marketers new ways to engage with on-the-go consumers and enable real-time options for mobile rewards, payments and commerce.
“Prior to 1990, airline and hotel frequency programs dominated the loyalty industry. Credit card programs were a novelty and retailers were still sorting out their strategies. So, our 20-year timeline covers a fascinating period in the history of loyalty marketing,” said Colloquy Partner Kelly Hlavinka.
Hlavinka noted the Colloquy list prompts the question: Of the developments since 1990, which are the most significant? “I would say the top three start with the introduction of loyalty’s ‘killer app’ – the loyalty coalition program,” she said. “Second is the extension of rewards and benefits beyond purchase behaviors into non-purchase behaviors, first seen with MCI Friends & Family, more recently seen in harnessing Word of Mouth communications in the social networking environment, and most recently emerging to drive socially responsible behaviors. She added, “The third would be the emergence of ‘Enterprise Loyalty’ in which companies began to use customer data from their loyalty program to transform their customer experience, product mix, pricing strategies and other operational efforts.”