With so many in the industry caught up in the arms race of who can give out more rewards, no one has stopped to notice that most of them(loyalty programs) aren't particularly effective at building customer loyalty or returning profits.
According to a recent Jupiter Research study, "Too much sameness," is how Jupiter analyst Patti Freeman Evans sums up the enormous and still-growing customer loyalty landscape. "Giving people points means competitors can undercut you, and you lose your customer anyway."
"Points for the sake of points is just buying off the customer, it doesn't drive loyalty," says Gartner Research analyst Adam Sarner, who tracks customer loyalty programs. True loyalty, Sarner says, means getting increasing amounts of information from a customer who's happy to give it in return for a benefit. Surprising good customers with a sudden, unexpected discount or upgrade would go miles toward making them swear by a brand for life, he believes.
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thro' Forbes