Wednesday, July 16, 2008

Customer Loyalty Programs

This article in Advertising Age discusses the role of loyalty during economic downturns. Hilton Hotel’s senior VP of customer loyalty discussed how the members of the Hilton Honors program are responsible for the current success of Hilton and the chains ability to maintain business. While many view customer loyalty programs an important part of business during economic hardships, some corporations think about cultivating these loyal customers only during troubled times. This blog post raises the interesting point, that there is never a “best” time to encourage engagement in loyalty programs, instead it is important for companies to be constantly conscious of this need. The author of the post made this statement

Let’s consider a simple loyalty lifecycle: (1) Engage customers, (2) build loyalty, (3) reinforce loyal activities. Downturns are the worst time for (1) and (2) because there are fewer customers. It’s the time to really hone in on (3). So if you just start thinking about loyalty during a downturn, it’s too late.

What is your view on customer loyalty programs? Do you think that corporations have not been responsible enough in terms of cultivating consumer loyalty when they don’t have a pressing need for it?

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