The Importance of a Loyalty Program

A few brand aficionados and people I respect greatly, in particular Byron Sharp, argue looking at the Ehrenberg Bass data that the most essential brands are those which have the most customers. They argue that loyalty is actually a mistake because you're concentrating discounts on people who would be heavy customers of yours anyway. That doesn't mean, however, that you can't create differential value in many service industries for the people who buy from you most frequently. And so understanding that frequent customers occasionally have a different need set to infrequent customers is really, really important.