Is Loyalty Lost In A World of Points And Leaderboards? [Future Of Retail]

Is Loyalty Lost In A World of Points And Leaderboards? [Future Of Retail]

PSFK Labs looks at Community Loyalty as a way for companies to craft emotional perks to build long-term loyalty.

  • 29 november 2013

The introduction of game-based reward systems has created new ways to capture consumers’ attention by incentivizing them for their repeated engagement, but do all those points help keep fans by your side?

In commodity-driven marketplaces of the past where ‘stuff’ was the goal, these points carried value, allowing people to accrue vast stores that could be redeemed for discounts or better yet, more stuff. But as we transition into a place where experiences matter more, loyalty programs need to leapfrog ahead, creating new benefits and social value that excite their customers and give them a reason to keep coming back.

Social CRM systems are helping retailers and brands develop more meaningful relationships with their shoppers by linking individual engagement with a wider community. By encouraging and rewarding participation, these platforms can connect customers in new ways, creating more opportunities for them to share common experiences, interests and affinity, which provide value that grows over time.  Tying rewards to participation in a wider community to provide lasting benefits to both brands, retailers and their customers is a trend from PSFK LabsFuture of Retail report that we’re calling Community Loyalty.


Although points capture consumer’s attention, loyalty programs are producing less memorable interactions for brands. During the height of active loyalty membership programs, Colloquy’s 2011 loyalty program census found that the average US household has enrolled in more than 18 loyalty programs and they are active in less than half of those programs. There are roughly $48 billion in reward points and miles issued annually, with at least one-third ($16 billion) going unredeemed by consumers. Active membership has slipped and overall growth has changed direction in Colloquy’s 2013 report. Furthermore, the impact of loyalty programs has become less memorable as an ACI global study found that three out of four Americans that are members of at least one retail loyalty card program, 85% of members report that they haven’t heard a single word from a loyalty program since the day they signed up.

Companies need to look at the tools available to help them listen to what customers want and invent new ways of delivering stimulating experiences. noted that “Points, coupons and freebies are great for grabbing initial attention, but in the long run these promotions can’t make up for a lackluster customer experience.”  Companies are looking for interactions tied to consumer interests that they can partake in to make the brand relationship more intimate. Patagonia’s Vice President of Retail, Robert Cohen, describes how they look at collaborating with their consumers, “obviously that rich customer relationship that you really want is ‘We’re like you. We care about the same things you do. Let’s do things together.’ In a lot of ways the desire to build that relationship is about retailers trying to make big business feel a lot smaller.”

For companies that are looking to craft emotional perks for long term loyalty PSFK Labs‘ Director, Scott Lachut, notes that “Status and recognition are worth more than points and discounts. Reward your community of shoppers for sharing and participating in the activities that are meaningful to them and make sense within the broader context of your store or brand. Where possible leverage existing networks rather than starting from scratch.”

With that in mind, companies that are looking to re-frame what loyalty means to their customers should consider the questions below:

  • Should you create your own community or leverage existing networks?
  • Are there unique opportunities to incorporate or reward existing customer behaviors?
  • What is the long term value for your customers and your brand?
  • What ways can your most engaged fans be tapped to support your larger community of customers?
  • How can you leverage customer assets as part of your marketing efforts?
  • What information or interactions can you elevate to help your customers get recognition from their peers?
  • How can you activate your community to take part in socially-responsible initiatives?
  • How can you encourage engagement on existing social platforms?

In the fourth edition of the Future of Retail Report, PSFK Labs brings together two interconnected themes and eleven key trends that provide a foundation for the modern shopping experience. The findings are brought to life with best-in-class examples, actionable strategies and leading questions to inspire leading retailers and brands. Join us at our San Francisco conference on Nov. 21st where talks from retail innovators will bring the key themes to life.


Contributed by: Wesley Robison

Images via: Foursquare


How Indiegogo Is Becoming An Adult Product Destination

Home september 23, 2016

Watch This Fire Pit Dance Along To Your Favorite Song

Music City Fire is a system that is designed to flicker in time to ambient music

Automotive september 23, 2016

Slick GPS Navigator Gives Directions To Moped Riders

This small, round device attaches to a sideview mirror to display maps for safer traveling


Get PSFK's Related Report: Future of Retail: Technology Primer

See All
Home september 23, 2016

A Clock That Beautifully Manages Your Information Overload

The wall-mounted timekeeper is made to help people maintain focus and stay up to date with their appointments

Arts & Culture september 23, 2016

Performance Piece Blends Dancers Into Folds Of Light

The work provides commentary on the increasing connection between programmed and analog dimensions

Related Expert

Jonathan Waecker

Advertising, Arts & Culture, Entertainment, Future of Gaming, Media & Publishing, Technology, Work & Business

Design & Architecture september 23, 2016

Design Firm Adapts Childhood Homes For Unemployed Young Adults

The studio has unveiled three prototypes of transformed living spaces for people forced to move back in with their families

Health september 23, 2016

These Chocolate Squares Claim To Reverse The Aging Process

A group of researchers from Cambridge University have developed a candy bar that promises to give you a youthful glow

Cities september 23, 2016

Food-Producing Architecture Competition Seeks To Better Feed Cities

A design challenge in Copenhagen highlights the need and beauty of urban farming


Future Of Automotive
Scenarios Driving The Digital Transformation Of An Industry

PSFK Op-Ed september 21, 2016

Everything I Know About Leadership I Learned Teaching 7th Grade Math

Bree Groff, Managing Director at NOBL NYC, shares her secrets for knowing your employees and enabling a team

PSFK Labs september 22, 2016

The Future Of Work: Why Innovation Is Every Employee’s Job

PSFK Labs sits down with management at Johnson & Johnson to learn how the company comes up with their next ‘big idea’

Health september 23, 2016

Wearable Monitors Sun Exposure To Prevent Sunburn

The clip monitors UV rays to make sure you're not receiving too much sunlight

Op-Ed september 23, 2016

Productivity Expert: The Magic Of The Five-Hour Workday

Stephan Aarstol, Founder of Tower Paddle Boards, explains why the modern notion of office hours needs to evolve

Culture september 23, 2016

This Exhibition’s Crowning Jewel Is An 18k Gold-Plated Toilet

The piece, titled 'America,' is meant to raise questions about the country's wealth inequality

Culture september 23, 2016

Match Up With Dates On Tinder Based On Your Music Preferences

A new partnership with Spotify lets people pair up based on shared tastes in artists

Entertainment september 23, 2016

Capture, Cut Up, And Configure Your World In 360 Degrees

To meet a booming 360 and VR video-capturing industry, a multimedia software company bolstered its media editing suite for 360-video creation


Future Of Work
Cultivating The Next Generation Of Leaders

Advertising september 23, 2016

These Trucks Drove Around In Circles For 24 Hours To Keep Time

The giant ticking clock was created by 14 Scania vehicles in a deserted airfield

Advertising september 23, 2016

Buy Movie Tickets Directly From Your Facebook Profile

The new feature is part of a campaign from Fandango to further imbed social media into the ticket vendor's digital presence

Asia september 23, 2016

Co-Working Space Brings The Calming Atmosphere Of Nature Indoors

An architectural firm in China has designed a new type of shared office that prioritizes the natural environment

No search results found.