Customer loyalty <> Loyalty cards

Time and again whenever I ask marketing personnel on their customer loyalty programmes, I get the same answer -- "Yes, we have loyalty cards". Somehow, there is this accepted practice that a loyalty programme is all about loyalty cards. There is an understanding that the more points a customer has, the more loyal he is.

Unfortunately, this is not true. Every marketer today has sponsored a loyalty card. Every credit card gives spender points. Every airlines gives mileage point. Every debit card gives cash back. So when everyone gives the same offer, there is no differentiation in your position in the customer mind.

About 15 years back I was considering getting my first credit card. The card provider I selected was the only one giving spender points. And that was the reason I selected this credit card. Today, I carry 4 credit card, and the last credit card I opted for was because it provided me access to the lounge of the airlines I use frequently. The fact that it provides spender points never entered my domain of evaluation.

Now comes the question... so if spender points is not important, can it be taken off. There is a cost to maintain the spender points accumulation and redemption. Companies can save this cost and effort. So back to the same question... can it be taken off?

My answer is "YES, it can be taken off".

The biggest challenge is to move away from the common practice of spender points. This is one ritual that often marketers dread to break away from. And more important, there is no justification statement for continuing with this ritual.

Let us consider the previous case. Do I track the number of points garnered on my credit card? No. My only expectation is to get a private location where I can work undisturbed while waiting at the airport.

So can the loyalty points be taken off? Yes, it can. But it needs to be replaced by something more relevant. To a credit card, it could be access to some facilities -- airport lounge in my case. To an airline, it could be option of booking a preferred seat. To a bank, it could be automatic addition of an appliance to the household insurance.

This will get the customer prefer your service over the competitor because he is getting some additional service that will make life easier for him.