business news in context, analysis with attitude

by Kevin Coupe

Since Michael Sansolo has begun the day with a treatise on the value of travel agents, let’s continue the theme by noting that there have been various reports saying that the nation’s first frequent flyer program was launched 30 years ago this month.

While many of these programs can be justly criticized for a variety of reasons - like award seat availability - in a lot of ways they remain the purest of loyalty programs. Customers get points for every purchase they make. The more purchases, the more points. Once you reach a certain level, you can cash those points in for products and services. Better customers get better service, and best customers get the best service.


Compare that, for example, to the average supermarket loyalty program, which is generally used as a coupon delivery program. Best shoppers often don’t get any better service than anyone else; in fact, stores generally make it so that people buying the least number of products get dedicated lanes, while the people with full baskets have to wait online. Often these programs are linked to card usage, and sometimes they are delivered via cash register receipts that must be kept and proffered to get any value. And frequently, there is little about the programs to differentiate the store from any other retailer - which is why so many people have a collection of cards attached to they key fobs.

In so many ways, it seems that retailers that have created such programs have done so in the hope of creating a kind of artifice of loyalty, rather than something of actual value.

Though this may not be as big a mistake as that made by retailers with no program at all, retailers that have no idea who their customers are, how often they are shopping, what they are buying. Which is a dangerous lack of knowledge at this point in retail history.

Thirty years of frequent flier programs. In those three decades, some have learned the lesson well. But others have not, and that is an eye-opener.

Or should be.
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