Is your company launching a loyalty marketing program? If so then it helps to know the early history of these programs. That includes the birth of those marketing programs during the past century.
The history of loyalty marketing actually dates back to the 1700s although such programs were much different than the loyalty programs of today. How did they work? The programs of the 18th century involved copper tokens that were a type of delayed discount program. One of the main drawbacks of this early program was the high cost of maintaining it with metal tokens.
This resulted in the future use of certificates to replace the tokens. The main problem with the certificates is they were big and easily damaged. The cost was indeed lower but it was tougher for customers to hold onto the certificates before redeeming them for products.
The next big development in loyalty marketing programs was the stamp system. customers collected the stamps in booklets then turned in the booklet to get freebies. The main goal of the programs was to keep customers from buying their items from a particular store and avoid taking the option of shopping at a different store. This program started in the 1920s so it’s interesting that the stamp system is still used today by many brick-and-mortar stores and restaurants.
As time passed the loyalty programs were tweaked again with the main goal of turning customers into repeat customers. One of the most famous examples was American Airlines’ frequent-flier program that it launched in 1981. This was the first program of its kind since customers could earn free flights based on the number of miles they had flown.
While AA’s program is quite well-known this kind of loyalty program then spread to different business sectors. That included coffee shops, donut shops, auto repair shops, hotels, pharmacies, etc. These loyalty programs often featured punch cards instead of stamps since they were easier to maintain.
Another major change happened when mobile apps were used to keep track of customers’ loyalty points. This made the process even easier since customers didn’t have to keep track of certificates, booklets, or keychains. All they needed to do was download the store’s app then the points were automatically credited based on their purchases.
Today there’s more loyalty programs than ever. Companies realize that people like getting free and discounted products so it’s an excellent way to nudge them to make more purchases. The customers are also rewarded for buying their products from a particular company over others.
Many of today’s consumers are members of multiple loyalty programs. This shows that while the history of loyalty programs date back a century or so their effectiveness in boosting customer loyalty hasn’t changed over the years. It’s likely they’ll be here to stay even if people are racking up points on their phones and tablets instead of saving paper certificates or stamps.
This is the early history of loyalty marketing programs. Today’s Pathwwway Internet Gaming loyalty programs are a world apart from the original programs but the goal of rewarding customers for their loyalty has remained the same over the past century.