Experience is the source of value which is the source of brand loyalty. That’s why if you look at the top 10 most beloved brands, virtually none (okay, 2) offer points or other such inducements to their customers. But the elephant in the room is really understanding what experiences should be delivered to what customers.

Not all customers are equal – some spend more than others, some evangelize about the brand more than others, some complain more than others, yet few traditional loyalty programs make that distinction when dishing out their rewards. What loyalty programs don’t yet consider is how to reward their profitable loyal customers – so that the experiences delivered and monies spent in support of those experiences actually keep more profitable customers in the tent.

With the “r” word looming on the horizon, now more than ever, loyalty strategies must deliver the “p” word – profits. For more of my views on this check out my white paper: Loyalty 2.0.

Also see Bruce Temkin on Experience-based Differentiation