Loyalty for royalties

Loyalty is all the rage.

This week, Myer revealed sweeping changes to its loyalty program in a bid to match David Jones’ recent Qantas partnership, a gambit which delivered 50,000 new members hungry for  frequent flyer points.

It’s part of a commerce landscape awash with loyalty programs. You can barely buy an item on the Australian high street without being prompted to scan a loyalty card, or being asked if you’re a member. Mecca’s Beauty Loop has become such a feature of local culture, it should arguably be a subject of the Victorian government’s inquiry into cults.

There are two interesting questions here.

The first - do loyalty programs work? Well, kinda. It’s an $8bn industry, after all, with 87% of Aussies being part of a program, and the average consumer having eight (8) memberships. But loyalty programs are also open to the same dopamine-addicted cultural trends as everything else, with almost two thirds of consumers saying they quickly lose interest if the program doesn’t give them something new or valuable.

The second - are they a good thing? That depends on your perspective. On the one hand, they give hard-up punters additional value. Alternatively, they may be using gamification tactics to make customers spend more, data analysis to implement surveillance pricing, and AI to more effectively target you with personalised offers.

It turns out loyalty programs are less about loyalty, and more about an individual and societal judgement on value exchange. If the benefits on offer are worth it, we’re happy to throw any and all of our data at the feet of our favourite company. If not, we’ll quickly switch off and turn away. 

Which at least helps explain the manic determination of many to reach Mecca Beauty Loop Level 4. Just imagine what’s in that box.