The Catalyst Code Blog takes our two-sided platform concepts to heart by bringing together contributors and readers to deliver thought-provoking fodder in the payments, web 2.0, loyalty, advertising, mobile and social networking spaces. We hope you’ll join the conversation.

To learn more, visit



Subscribe (RSS-feed)

Or subscribe via email:




    Related Publications

  • Defining Loyalty

    By: Karen Webster on June 18th, 2008

    Quick, someone grab a Websters.

    Because I want to talk about the crux of my current conundrum with loyalty programs (as they are now architected). What are these programs trying to achieve anyway? My economist friends say that they are all about the “lock in” – so reeling in customers with the promise that sometime in the future they will get something of value that can be had in exchange for the points that are accrued. (check out Loyalty Cards and Polymorphic Equilibria). And yes, I looked it up to be sure what it meant too.

    But for most people today, that payoff is “too little too late” – with many soured by the experience of trying to redeem air miles. But these sorts of programs are relatively easy to architect and are being positioned as “table stakes” for most retailers today. So at what point do participants start to feel like hostages instead of happily rewarded consumers?

    More difficult but more necessary – at least in my view – is creating a customer experience that people value enough to make them want to tell their friends and the kind of loyalty that will make them want to stick with that retailer for life. Wal-Mart does not have a formal loyalty program, yet the consistent experience they deliver to customers who seek EDLP keeps people coming back on a regular basis (so much so that they are and have been the world’s largest company since 2001). Apple has no formal loyalty program, but their reputation for innovative products with cool designs keeps people buying their product (including a $700 iPhone) and packing the Apple stores. Neiman Marcus (whose innovative loyalty program is really the gold standard) does not rely on it to keep customers loyal, but rather to create the feeling of being a member of a really exclusive club—a club that’s hard to get into and that once you’re in, you never want to leave.

    And, speaking of Wal-Mart, Colloquy’s recently published Retail Loyalty Index ranked Wal-Mart as the most dominant retailer for shopping frequency in all categories (including department store) but at or near the bottom when it came to customer loyalty. So, I have to say that I am admittedly a little perplexed over what is meant by “customer loyalty.” Colloquy’s report was compiled after surveying 3,000 consumers across 6 demographic segments to determine the brands to which consumers are most loyal. Results are presented in the aggregate (e.g. overall loyalty across all consumer segments) and by merchant type (e.g. personal care, department store, mass merchant, grocery).

    To quote the survey takeaway: “The survey results demonstrate that, while everyday low price tactics successfully build sales through frequency, this success comes at a cost. With the traditional marketing mix taking a back seat to a relentless focus on price, a marketing strategy focused solely on sale prices and promotions not only faces a diminishing return but can also actually breed disloyal customers. … Simply having twice the number of locations of your competition, it seems, does not guarantee loyalty.”

    This is where I get lost. People shop at Wal-Mart more often than the stores that they feel most loyal to? Sort of makes you wonder what loyalty means to those folks. The survey asked respondents to define it as a willingness to recommend a retailer to your friends. A look at Wal-Mart’s annual revenues suggests that an awful lot of those people are suggesting it to their friends. The notion that “marketing strategies based on sale prices and promotions” breed disloyal customers rings sort of hollow when (a) most loyalty programs are really price discrimination schemes anyway and (b) Wal-Mart overshadows the second largest US retailer by a factor of 4. It’s hard for me to understand what price Wal-Mart is paying as a result of having created these so-called “disloyal” customers.

    I know, I’ve talked about this before. But it’s worth the revisit: There is a loyalty frenzy going on today that has perhaps lost sight of the real reason that customer loyalty is such an important business objective. Keeping customers loyal is critical to the overall vitality and tenure of a business. Loyalty programs that simply operate as a business veneer don’t do much to further achieve those objectives.

    Just ask Wal-Mart.

    8 Responses to “Defining Loyalty ”

    1. 1 acciscivy

      chatsite met vreemden

    2. 2 expecyadelync

    3. 3 agencja reklamowa lubin

      Please let me know if you’re looking for a writer for your weblog. You have some really good articles and I believe I would be a good asset. If you ever want to take some of the load off, I’d absolutely love to write
      some material for your blog in exchange for a link back to mine.
      Please send me an e-mail if interested. Regards!

    4. 4 poigoulge

      Качественные прогоны Хрумером
      Доброго времени суток, уважаемые господа,
      предлагаю вам свои услуги по прогону ваших проектов
      программным комплексом Xrumer 7.7.40* Elite по профилям,блогам,форумам базы свежие и постоянно обновляются.
      База содержит ресурсы разной тематики.
      Стоимость услуги: от 10 wmz
      Срок выполнения: до 3-х дней (оговаривается во время заказа)
      Информация в этом сообщении всегда актуальна ( почти всегда онлайн )
      Так же можно заказать: SEO продвижение в топ 10 ,качественно-НЕ ДОРОГО ( только белые методы )
      Как заказать:
      ICQ – 718158
      или Skype: iver-ruslan

    5. 5 ElellppfleNT

      100K facebook account password

      Additional tags:

      fb hack password, hack facebook accounts

    6. 6 Impamslobilia

      Con SafetyMon podra bloquear MSN Messenger, Facebook, Youtube, Paginas deadultos, software P2P,o cualquier otro software, pagina web, busquedaweb, o carpeta que ud desee.

      ?Que clase de sitios puedo bloquear con SafetyMon?

      Con SafetyMon es posible bloquear toda clase de sitios, programas o busquedas web. Usted solo necesita conocer el nombre de la pagina o programa como aparece en la Barra de Titulo de su respectiva ventana e ingresarlo a la base de datos de SafetyMon. Por ejemplo, puede bloquear msn messenger, web messenger, facebook, busquedas de porno en google, kazaa, torrents, el panel de control, solitario, el administrador de tareas, lo que usted desee.

      ?Como funciona SafetyMon?

      Es importante anotar que SafetyMon no funciona como lo hace un firewall, es decir, SFM no bloquea puertos especificos de Internet, por el contrario, bloquea las aplicaciones por sus caracteristicas propias, lo cual lo hace muchisimo mas efectivo, veamos un ejemplo:
      Si quisiera bloquear el software MSN Messenger, lo unico que debe hacer es activar la casilla “messenger” (si no esta activa ya) dentro del panel de control, y de tal manera bloqueara no solo el Live Messenger, sino el MSN Messenger, el web Messenger, las busquedas de Messenger en Google, etc; es altamente efectivo.

      Dado que no funciona como un firewall, tambien puede bloquear por ejemplo el acceso al panel de control, al panel de servicios de Windows, al administrador de tareas, o cualquier panel o software que no funcione bajo internet.

      Si aparece una nueva pagina o software que quiera bloquear, simplemente acceda al panel de configuracion, y agreguela, por ejemplo “facebook”. Y listo, ya no podra ingresar a facebook.

      ?Se puede administrar desde un unico equipo servidor ?

      Si, se puede instalar desde un equipo servidor para que controle otros equipos cliente,de tal manera, si se cambia la lista de sitios o aplicaciones a bloquear en el server, automaticamente cambia la configuracion en los terminales configurados como equipos SFM clientes.

      Facebook accounts

    7. 7 reklama

      Do you mind if I quote a few of your posts as
      long as I provide credit and sources back to your webpage?

      My blog is in the exact same area of interest as yours and my users would really benefit
      from a lot of the information you present here.
      Please let me know if this ok with you. Regards!

    8. 8 spanish jokes one liners

      Thanks foor a marvelous posting! I definitely enjoyed reading it, you are
      a great author.I will make certain to bookmark your blog and definitely will come back someday.
      Iwant to encourage continue your grteat work, have a nice day!

      Look at my blog post: spanish jokes one liners

    Leave a Reply