Loyalty Marketing Has Been Reborn in Silicon Valley (Sunnyvale, CA)
In a relevant demonstration that everything old is new again, there is renewed interest in loyalty marketing. Loyalty marketing is the process of retaining customers and growing sales from them by offering incentives to purchase.
Some of the oldest loyalty marketing programs are Betty Crocker coupons (initiated in 1929, discontinued in 2006), S&H Green Stamps (initiated in the 1930s and discontinued in the 1960s) and American Airlines AAdvantage frequent flyer program (initiated in 1981 and still ongoing).
, which began as a model for conducting business, has expanded into a marketing and advertising strategy that not only rewards existing customers for loyalty, but also encourages those customers to refer others. The success of loyalty marketing rests on the ability of the organization to deliver a quality product or service that so completely satisfies customers that they become loyal to the brand.
This positive experience then becomes the basis for consumer advocacy – when satisfied customers refer others.
Word-of-mouth has been the traditional method customers have used for their advocacy; viral marketing is a more recent method.