MarketWatch - February 16, 2011
Loyalty programs are working

As the traditional levers of promotion and marketing are proving a less-than-stellar means for attracting and retaining customers, companies are using loyalty program, and their perks, as a lure.

Some 52% of respondents said they opted in to loyalty programs in 2010, compared with 45% in 2009. And the percentage of consumers who stayed with their loyalty program climbed to 54% from 49% among retail consumers, to 53% from 45% among those with wireless-service providers, and to 51% from 49% among people in hotel programs.

Loyalty programs, it turns out, generate loyalty. If you've been building miles on your credit card or accumulating points for a free hotel stay, you're not likely to give that up because you have to deal with customer-service agents who can't solve your problem, according to the Accenture study.

However, it could also mean that when you opted in, you unwittingly locked yourself into a longer relationship with the provider than you might have wanted.

But here's the good news for consumers: loyalty programs are more tailored toward individual needs and wants than ever before. Companies realize customers are in fact individuals who want to be treated uniquely, Wollan said. "Loyalty and loyalty programs have emerged as something that companies can really look to leverage," he said.

"Every consumer wants something different," he said, "but every consumer wants something."

Jennifer Waters is a MarketWatch reporter, based in Chicago.

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