Alot of great insight from a white paper from Colloquy. Many retailers are using Loyalty Programs to try and attract and hold on to customers. Colloquy’s white paper shines some light on the effectiveness of these programs and one has to wonder are they worth what is going into them?
I believe CVS has the most sophisticated loyalty program in existence at retail, and the only one that is truly national in its scope. But if you look at their performance, they trend behind Wal-Mart and Walgreens which have no such programs.
Is the consumer getting it’s money’s worth? Is CVS? I don’t think so. I think there is tremendous effort being thrown against a program that costs too much and delivers marginal benefits to the targeted audience. Redemption rates continue to lag and the program is largely under utilized.
So where is the benefit? If the consumer’s not winning and the retailer isn’t either, what’s the point?
