In recent years, customers have fallen out of love with loyalty programs. There are several reasons why, but chief among them is the fact that they tend to be so fragmented. Often, consumers belong to a multitude of programs, but carry only the card from their favorite supermarket – for the simple reason that they fail to extract much value from the vast majority. It’s as if they have to manage many currencies at the same time. And most loyalty currencies are not very useful. One for the supermarket, another for the local coffee shop, and another when buying flights for a business trip. What if there was a way to exchange these fragmented loyalty currencies in order to better manage and utilize the value that customers have accrued?

We exchange fiat currencies all the why not loyalty currencies?

Imagine you live in London and travel to Paris on a business trip. If you returned home with a couple of hundred euros in your wallet and weren’t planning on going back to the eurozone for a few months, you’d probably change the currency back to sterling. When we travel abroad we change currencies all the time. This is normal. But it isn’t currently the case with loyalty currencies. We cannot exchange points from one brand’s program to another and simply have to wait until we are next in that store. This unnecessary practice greatly limits consumers’ interest in collecting so many loyalty currencies. And it certainly limits their willingness to engage (which is a great loss for the merchant).

At the moment, some brands think that it is enough that customers are part of their loyalty program. That this means their members must be loyal.

It doesn’t.

Recent studies have suggested that while customers might still sign up to loyalty programs, albeit in fewer numbers, their opinions of the value of the program tend to be quite negative. Activity-based metrics are meaningful, not membership metrics.

While some high spending customers can reach interesting rewards, the vast majority of customers have to wait a very long time and still often are not able to redeem for something of interest. Imagine how much more favorably customers would view your brand if you told them that the value they had accrued on their loyalty account could also be exchanged and used elsewhere.

Put the customer first and they will reward you

It is understandable that at first it might sound counter intuitive to allow your customers to exchange their loyalty points accrued at your store to spend elsewhere. The key, however, is to think long-term. For many years now, customers have been desperate for brands to modify their loyalty programs by offering the customer something really useful. To improve their service. By allowing them more opportunities to redeem their points (possibly at a value below your cost), you would be doing just that. And, if your brand is valued, customers would convert other loyalty currencies into yours!

At Currency Alliance we believe strongly in the idea that merchants must be the first to give and that those who don’t necessarily expect anything back in return will gain in the long-run. The brand-customer relationship has changed greatly in recent years and the balance of power has shifted. This thinking persuaded us to set up a universal loyalty currency called comcoin, and to offer an exchange marketplace capability for existing loyalty currencies. Only by offering customers better value can you expect their ongoing engagement, and ultimately, their loyalty.

Now is the perfect time to learn from the mistakes of ‘loyalty programs gone by’ and get ahead of the curve toward a more liquid points ecosystem that delivers real value to your customers. Inability to accrue value from fragmented loyalty programs breeds frustration among consumers. Let’s encourage different feelings from them so they look favorably upon your brand.

If you would like to talk further, have any comments, or would like information about exchange marketplace capabilities and our universal loyalty currency, comcoin, please get in touch with us.