COLLOQUY Research: U.S. Loyalty Rewards Program Membership Tops 1 Billion

CINCINNATI (May 1, 2007) -- Membership in U.S. loyalty rewards programs has reached 1.3 billion, more than four times the national population, according to COLLOQUY research that provides the first comprehensive census-taking of loyalty marketing since the modern loyalty era began with frequent flyer incentives in 1981.

COLLOQUY’s benchmark-setting measurement of the scope of loyalty marketing, based on a fourth-quarter 2006 analysis of a dozen specific business sectors, reveals that the average U.S. household belongs to no less than 12 loyalty programs.

A loyalty program recognizes and rewards the best customers of a business. COLLOQUY’s Loyalty Census 2007 tabulates program members, not unique individuals. COLLOQUY is a loyalty marketing publisher and consultancy.

In a key finding, the COLLOQUY census shows that “active participation” in loyalty programs is a blended average of 39.5 percent across all sectors analyzed, a number that COLLOQUY experts characterized as “dismal.” The definition of active participation varies by industry, but at baseline, an active program participant is distinguished from a one-time shopper or flyer, down to an inactive name in a database. Of the 12 programs per average household identified in the census, only 4.7 yield active participation.

COLLOQUY Senior Director Kelly Hlavinka addressed a major question posed by the census results -- Does the participation data mean the loyalty empire has reached a saturation point? “Loyalty memberships are flying dangerously high. Fat membership roles may look good in a press release, but active loyalty program members are the only members who count,” said Hlavinka. “Marketers must adopt highly targeted enrollment strategies and allocate resources where they accomplish the most good. That means enroll the right customers, drive active participation programs, employ reward bonuses selectively and use loyalty data throughout the organization to increase customer insight.”

COLLOQUY’s landmark census results are based on information obtained from over 1,000 loyalty program sources, including company press releases, program web sites, shareholder annual reports, research reports, third party publications and confidential interviews. Business sectors covered in the census are Airlines, Financial Services, Hotel, Restaurant, Gaming, Grocery, Retail Fuel, Specialty Retail, Drug and Discount Stores, Department Stores, Internet and Miscellaneous.

Some other key census findings are as follows:

• Four business sectors, Airlines, Financial Services, Grocery and Specialty Retail, account for 57 percent of the total loyalty program membership
• Airline reward-seat inventory continues to shrink and mileage expiration periods grow ever shorter – which means that the devaluation of mileage currency will continue
• Financial Service loyalty programs, fueled by credit cards with rewards as primary competitive weapons, are in a “Golden Age” with 239 million members and 164 percent growth since 2000
• Grocers who are fighting a perception of loyalty-program ubiquity and sameness will adopt loyalty models that allow for richer customer segmentation funded largely by packaged goods manufacturers
• Hotel loyalty programs will enjoy modest growth as consumers purged from airline frequent flyer roles migrate to hotel programs offering better value
• Gaming companies’ healthy profits will allow them to incubate the best loyalty practices in coming years; as gaming leads, the rest of the loyalty industry will follow
• The restaurant industry is poised for a loyalty renaissance.

“If loyalty program membership growth continues unabated, we may all end up with massive headaches,” said COLLOQUY Editorial Director Rick Ferguson. “The biggest and potentially most progressive method of making programs more successful is the one thing that loyalty marketers are most loathe to do: trim the fat from their membership roles.”

COLLOQUY provides a complete report on the census in a white paper titled, “CensusTalk: Sizing Up the U.S. Loyalty Marketing Industry.” It is available free of charge at www.colloquy.com/whitepapers

About COLLOQUY:
COLLOQUY comprises a collection of resources devoted to the global loyalty-marketing industry. The flagship resources are COLLOQUY Consulting, a loyalty consulting practice, COLLOQUY®, a magazine serving the loyalty-marketing industry since 1990, COLLOQUY.COM, the most comprehensive loyalty web site in the world, and COLLOQUY's Research and Education divisions. Together they provide a worldwide audience of 28,000+ marketers with consulting, news, editorial, educational and research services across all industries and around the globe. COLLOQUY magazine and email subscriptions are available at no cost to qualified persons at www.colloquy.com or by calling 513.248.9184.

Average:

4

 

Your rating: Select ratingCancel ratingPoorOkayGoodGreatAwesome