We are pleased to publish our industry report on consumer loyalty card programs in the United States of America. This study includes assessment of the market size, trends, growth drivers, and what sponsors and administrators of consumer loyalty programs can do increase engagement.
Our analysis shows that while number of cards in circulation has more than doubled in just 8 years (financial institutions, drugstores, and department stores bombarded Americans with attractive offers increasing signups), nearly 60% of cards are never used. Our understanding is that the focus on undue focus on increasing reach has resulted in poor service of high-value customers (the airline sector has already started to make amends when they noticed that they were upsetting their big spenders by democratizing the loyalty program).
We recommend that loyalty card issuers conduct a comprehensive analysis of their user base, identify the high-value users, understand their needs, and bend over backwards to serve them. We conclude that dropping off the occasional users might actually be a better strategic option because it will free up resources to serve the rest. We also believe that sponsors might consider launching paid loyalty programs on the line of Amazon Prime to appeal to big spenders and then spoil them with delightful service.
