Loyalty Programs: Then and Now
In ancient Egypt, money hadn’t been invented yet. But ancient Egyptians did have something very similar to today’s loyalty programs: commodity tokens.
Citizens, workers, and slaves all earned these tokens for completed work and temple time; the most common tokens were for beer and bread. Those in higher-authority positions were often awarded double-tokens—not dissimilar to elite flyers in most frequent-flyer programs. They could then be redeemed for items other than bread or beer. Just like how a loyalty program may offer rewards for flights, but also iPads or magazine subscriptions in addition to travel.
Centuries later, what we know as customer loyalty programs began to take shape. In the late 18th century, American retailers began to give customers copper tokens with purchases that could be later applied to future buys.
But all this copper eventually became cost-prohibitive. It got replaced with stamps.
In 1896, the Sperry & Hutchinson Co., or S&H, created the S&H Green Stamp Program. Customers earned stamps when they purchased things from participating merchants, stuck them onto pages of booklets, and exchanged full booklets for reward products from catalogs or select S&H centers.
By the 1960s, S&H was the largest purchaser of consumer products. There were three times as many Green Stamps issued as U.S. Postal Service stamps.
Also: Anyone remember collecting box tops from cereal boxes? Box tops were coupons that were printed directly onto a product’s packaging. They had various point values and could be later redeemed for rewards. The Betty Crocker Box Top program introduced their program in 1929, and it ran until 2006. Each box of Betty Crocker products had a point value; families could collect the tops of boxes and send them in for kitchen and dining items they’d choose from a catalog.
(By the way, box tops haven’t entirely gone away; they’ve served as a loyalty program of sorts for schools. For the past 23 years, General Mills has used them to support their “Box Tops for Education” program, which helps schools earn cash to buy books, computers, playground equipment, and more.)
But one of the most well-known and long-running loyalty programs is frequent-flyer. American Airlines launched AAdvantage in 1981. This was quickly followed by United, Delta, Air Canada, and British Airways; now just about any passenger airline around the world has a loyalty program.
A discussion of loyalty program history wouldn’t be complete without mentioning the business membership program. Take Costco, for example, which gives its members (who pay an annual fee for membership) the opportunity to purchase items either only available at the store, or in larger quantities at comparatively lower prices.
Really, any store, from tiny food truck to global conglomerate can provide a loyalty program—from punch cards to international flights. With the rise of ecommerce and digital payments, having a brick-and-mortar shop isn’t at all necessary. From ancient times to today’s markets, businesses have needed to develop new ways to reach out to customers to promote long-term relationships.
So now that we’ve examined what’s already happened, let's think about what’s next.
The future of loyalty programs goes way beyond points. Loyalty is a destination, a mindset, a goal, and a customer experience. Loyalty changes behavior—and what better way to influence that behavior by allowing your customer to invest? Make loyalty rewards empowering to the customer: Help them become a shareholder.
As we've said before, by becoming a part owner in a business that means something to them, they too become invested—literally. Receiving stock when they make a purchase is not only brand loyalty; it’s giving your customers a stake in a business they support.
It’s an authentic customer experience that also makes financial sense—for the customer as well as the business.
Want to learn more about the next generation of loyalty programs? Check out Bumped for brands to get in touch with us!