Loyalty Program Cards – History and Relevance in the 21st Century

by Natasha Ambavle |

If you emptied the contents of your wallet, chances are you would find at least one plastic card with a company’s branding on it.

Loyalty Program Cards or loyalty card programs need no introduction; customers are well accustomed to them, and brands use these cards to their advantage in pursuit of keeping customers engaged and involved with the brand through their loyalty programs.

What Are Loyalty Programs Cards?

Simply putloyalty cards represent the loyalty programs initiated by the company.

To achieve their various marketing objectives and increase revenue, brands and companies worldwide initiate loyalty programs and issue cards to customers that convert them into members.

Members of loyalty programs can enjoy exclusive benefits from these brands and are deemed as special customers. Perks such as special rewards, gifts, early access to sales, and new launches, among other benefits, are dangled in front of purchasers. The idea behind loyalty program cards or loyalty card programs is to incentivize frequent and loyal patrons to continue their association with the brand indefinitely.

Loyalty programs are a well-tested means to boost engagement, build a positive brand identity, increase sales, and improve customer satisfaction levels.

A Timeline of Loyalty Program Cards

Loyalty Program Cards or loyalty card programs are not a novel concept. They have been around for generations and have evolved to better cater to their customers and companies equally. Here’s a brief history of loyalty program cards or loyalty card programs through the centuries.

18th Century

Loyalty programs and cards date back to 1793, when American retailers started giving out copper coins to every customer after their purchase. The customer could collect these coins and redeem them on their next purchases from the same retailer.

19th Century

Other retailers adopted the concept, and in 1896, in a bid to reduce the expense and expand the reach of the loyalty program, copper coins were replaced with tokens and stamps. UK’s green shield stamps were the first known loyalty program ‘cards’ and were awarded by the S&H Company to its customers after every purchase at the checkout counter of their department stores.

20th Century 

In 1929, Betty Crocker was the first to introduce the box-top as a form of loyalty program cards or tokens. The coupons were cut-outs that were printed on the boxes or the packaging of the products. The customer would cut out these coupons, collect them, and then later redeem them for rewards. The box-top form of loyalty card became widely popular, and soon many companies began to imitate this concept.

In 1981, American Airlines introduced the extremely well-known Frequent Flier program, also known as AAdvantage. The Frequent Flier Program was highly successful and showcased the true potential of loyalty programs. Card-based loyalty programs gained traction in the 20th century, and brands started issuing cards to their loyal customers and encouraged them to become members of the loyalty programs.

21st Century

The 21st century witnessed the emergence of eCommerce, technological innovation, and digital transactions. Although the physical loyalty card is still globally used, the introduction of mobile applications is steadily replacing the use of plastic cards. Although an app symbolizes the loyalty program, more importantly to many consumers, it is a convenient and eco-friendly way to ensure your loyal customers are taken care of.

How Does It Work?

Brands usually offer loyalty program cards or loyalty card programs to customers at the point-of-sale (POS), which could be the checkout counter at the brick-and-mortar store or on an eCommerce website, right before the payment gateway. Some brands offer loyalty program cards to select customers and frequent buyers.

The card is registered at the company under the customer’s credentials. Once the card is issued, it maintains a registry of points that the customer has accumulated after every purchase. The customer can redeem these points to reap the rewards and benefits whenever the customer prefers, as long as they are careful about the points’ expiration date.

Importance of Loyalty Program Cards to the Company

  • Encourages Repeat Purchase – Most loyalty programs follow a simple formula, which is ‘shop more to earn more.’ For every purchase a customer makes, they are bound to earn rewards through loyalty programs. This simple tactic encourages customers to purchase repeatedly from the brand.
  • Increases CLV – Loyalty programs are a foolproof way to increase customer lifetime value. It is the net profit generated by a customer throughout their lifetime with the company. Repeat purchases by the customer, improved sales, and the improvements made through analyzing accumulated data through loyalty programs considerably help in increasing CLV.
  • Access to Customer Data – Customer data and its analysis are important for any business to flourish. Loyalty programs give you access to vital customer data that can help you understand your customer more deeply and formulate better marketing strategies to keep buyers engaged and acquire new clientele.
  • Improves Customer Experience – Elevating customer experience can help your business tremendously. Loyalty program rewards can improve customer satisfaction levels, along with the customer’s relationship with the brand.
  • Improves Brand Advocacy – A satisfied customer is very likely to share their experience with their network of peers and family, as well as on social media platforms. Members enrolled in the loyalty programs that are satisfied with their brand experience are responsible for improving brand advocacy.
  • Increases Brand Credibility – Brand loyalty programs help improve customer retention rate, increasing sales, and boosting revenue, but also aid in building a positive brand image. It boosts loyalty and trust among customers and thereby helps in improving brand credibility.

A Loyalty Program is only advantageous when it is executed and run efficiently. Platforms like Annex Cloud can offer expert solutions that are customized according to your business requirements and designed to yield maximum return on your investments. To receive a call back from Annex Cloud, click here.

Importance of Loyalty Program Cards to the Customers

  • More Rewards – Customers with loyalty cards from a certain brand enjoy special status as elite customers. The longer the customers are enrolled in the loyalty program, the more special discounts they could take advantage of, compared to a regular customer without loyalty program cards or loyalty card programs.
  • Saving – Enrolling in a loyalty program means saving more money. Companies may offer special discounts and conduct special sales for their loyal members; most also offer additional discounts to participants on special occasions, like birthdays and anniversaries, along with other landmark occasions.
  • Special Privileges– Many brands host exclusive events, meet-and-greets, and parties for their loyal members. For example, Sephora’s The Beauty Insider Loyalty program hosts much-appreciated events and workshops throughout the year for its loyalty members.

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