Loyalty Points Are Dead

A lot of our clients were using customer loyalty points.

Buy something. Earn points. Redeem them later.

It was a standard playbook for a really long time.

Not anymore.

Why Points Are Losing Power?

1. You need 100,000 miles before you can see a free flight. Doesn’t work because customers don’t have that kind of patience in a world of instant gratification

2. You swipe at a gas station and get a few cents off. It isn’t obvious or clearly communicated.

3. At retail chains customers forget they even have points because it takes months to accumulate enough for a discount.

4. Points expire or devalue over time against the price of the product, leaving customers frustrated rather than loyal.

Whats working?

1. Free shipping kicks in on your first Amazon Prime order [aka instant gratification]

2. Peloton members have leaderboards and group rides [aka instant sense of community and belonging]

3. Make it about prestige and not points [The Amex Black Card for example]

4. Panera Sip Club offers Unlimited drinks daily for a flat monthly fee. No waiting.

The Shift

Customers no longer want to collect. They want to connect.

Brands that win will build loyalty by offering immediate value, unique experiences, and emotional connection. Not just another points balance.