Loyalty Rewards Membership on the Rise

Membership in U.S. loyalty rewards programs has reached 1.8 billion, according to the newly released 2009 Colloquy Loyalty Census. The adjusted total represents a 24 percent increase from the 1.3 billion tally in Colloquy’s last loyalty marketing industry census, published two years ago.

The 2009 census covers three industry segments not included in the 2007 version: car rentals, cruise lines and mass merchandisers. If these new industries are removed, the adjusted 2009 U.S. census total stands at 1.673 billion. To properly compute growth trends, Colloquy used the adjusted 2009 membership total as its data point.

The 2009 census shows the average U.S. household has signed up for 14.1 loyalty programs, but actively participates in only 6.2 of them. The corresponding numbers in 2007 were 12 and 4.7, respectively. A loyalty marketing program is one that recognizes and rewards the best customers of a business. Colloquy noted that its census tabulates program memberships, not unique individuals.

The number of active memberships in U.S. loyalty programs stands at 792.8 million, a number that the study’s authors characterize as “one of the worst-kept dirty secrets of the industry.” This number means that the rate of active membership is relatively flat at 43.8 percent, compared to 39.5 percent in 2007.

Definitions of active memberships vary from company to company, but a typical example is a member that has at least one instance of activity, such as earning points on a purchase or redeeming for a reward, within a 12-month period, the research said.

“Given the bursting of the credit bubble, the recession and pressure to control program costs, loyalty marketers must turn to growing program value, not the size of their membership base,” stated  Colloquy editorial director Rick Ferguson. “Conditions are ripe for marketers to use loyalty data across the enterprise, enhance value propositions and adopt innovative loyalty models such as coalitions, as they seek to revive lapsed members and turn engaged members into profitable, loyal customers.”

U.S. loyalty program memberships, ranked by industry, are as follows (in millions):

•    Financial Services 422.0;
•    Airline 277.4;
•    Specialty Retail 191.3;
•    Hotel 161.8;
•    Grocery 153.3;
•    Mass Merchants 124.8;
•    Gaming 106.0;
•    Dept. Stores 92.8;
•    Drug Stores 73.9;
•    Fuel/Convenience 51.2;
•    Restaurant 13.7;
•    Car Rental 10.7;
•    Cruises 10.7;
•    Other 127.9.

Colloquy is a provider of loyalty marketing publishing, education and research. Its 2009 census is based on information from its own archives, program Web sites, sponsor-company press releases, annual report filings, third party publications and research reports.

Source: Csnews.com

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