Aug 18, 2010

Points based loyalty programs: Legacy systems on their way out?

Traditional points based programs have been around a long time. They feel like heavy, complicated, old fashioned legacy systems, requiring huge investments in CRM, databases, POS integration and lots of other stuff. The work Taggo is doing with Facebook fan recognition makes this increasingly clear to me.

After so many years of heavy lifting, I now want to do things that are light, fast, easy, highly attractive, fresh and modern.

Traditional loyalty programs are the past. Legacy. Boring. Heavy. Very heavy.

Here is the last paragraph of Bill Hanifin's excellent article Winds of Change for Loyalty Marketing: "For the past 30 years, Loyalty programs have been designed by Boomers for Boomers. The influence of a digitally connected generation is more apparent than ever, and consumer engagement will only happen if you re-tool marketing strategies to embrace the Millennials and others who want more transparency and immediacy in their brand relationships. Are you equipped to make these changes?"

My 1996 patent, "Real-time RFM", launched the real-time rewards industry and was the basis for launching my last company, Welcome Real-time. The technology in some form or another drives credit card loyalty programs in over 30 countries. The whole focus of past loyalty programs has been on segmentation and triggering methods and complex rewards calculation and delivery at the point of sale. All very Boomerish (Bill, I love your analogy).

Time for change.



Jim Simpson said...

Yes, they must move aside for the reality of more debit card use, locally funded merchant rebates and socially shared concepts that include non-profits. Further, the use of merchant funded allows banks to replace a portion of upcoming lost debit transaction fees independently of interchange and regs. Community banks must fight back with unique, innovative and community ba It's time, and we're beginning with our first banks right now.

Aneace Haddad said...

I didn't want to bring up interchange again, but you're right. Credit card loyalty programs are based on very shaky foundations when they rely on interchange revenue.