As we near the 11th edition of the Customer Loyalty Summit in Mumbai, the key question doing the rounds is – is it the end of the road for Customer Loyalty Programs ?

The data says NO, customer loyalty is actually growing with a more than healthy rate of growth as reported in the soon to be released ‘State of Customer Loyalty in India’ paper that we will release at the Summit – look out for the report on our site ( )shortly, in case you are not attending the summit.

So here are the myth busters which will help you ensure your loyalty program meets your strategic requirements in today’s changing times:

  1. Customer loyalty cards can be replaced by mobile numbers and email ids – Its true that customer cards can be replaced by mobile numbers and email ids, however customer loyalty Cards are only the manifestation or tool by which customers were recognised, while the mobile number can replace the card it cannot replace creation of loyal customers. The mobile number and email id must be the initiator for customer engagement and recognition.
  2. Rewards create loyalty – Rewards are a significant component of a loyalty program but not the only component. Rewards coupled with Recognition and Relevance help build customer loyalty. So while its true that the rewards industry has grown leaps and bounds and digital has resolved the fulfillment challenges, program rewards meets the requirement of rewarding the customer for their past behaviour and thank him or her for their custom.
  3. Digital and Customer engagement is possible without a loyalty program – yes that is true and Customer engagement was true even before digital. Making the customer a stakeholder in the relationship needs a good loyalty program. A good loyalty program can engage with good insight and intelligence, i.e recognition and relevant conversations.
  4. Data is available without a loyalty program – However good data is achieved only when the customer becomes a stakeholder in ensuring the data is validated and updated. Today the issues of privacy will restrict brands from communicating with customers unless explicit permission is provided.
  5. Gamification replaces Loyalty – the nearest of the myths that is more true than any other myth, and here I must add the caveat that gamification does work if the audience are millennials and tech friendly customers. It enrolls, it engages, it recognises and rewards and it provides data & insights.

Like most strategy issues, the secret of successful loyalty programs is in the implementation, partial or poor implementation of good design will lead to wrong conclusions of the program not working. Good program design coupled with great program implementation make even bigger success stories.

So what are the opportunities for the loyalty industry – the 2 biggest opportunities are in developing value propositions beyond only rewards i.e recognition and benefits that members receive, the second one being the development of the “correct use” of insight and reports to identify potential future value, prioritisation of spends and relevant communication and engagement.