Take a hard look at how your loyalty program is structured and evaluate the value proposition. Are you offering more than just the monetary value of the rewards?

Or, are you using your loyalty program as a conduit for the best of what your brand has to offer?

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Providing discounts is table stakes for any loyalty program. Consumers expect to earn points for their repeat purchases, earning coupons and discounts – unfortunately this no longer guarantees their loyalty. Customers want to feel valued as a frequent shopper and want an elevated experience in return for their loyalty.

The Amazon Effect

After expecting discounts, consumers choose to have priority or free shipping as part of a loyalty program. This is often referred to as “the Amazon effect.” Think about the Amazon Prime model – Amazon Prime claims to offer free two day shipping on a vast assortment of products – yet the shipping is not truly free. Prime members are paying $120 upfront for free shipping throughout the year. However, this is positioned in consumers’ minds as free shipping and they have come to expect free shipping as part of other loyalty memberships.

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