Near the end of Jason Reitman’s 2009 film Up In The Air, corporate downsizer Ryan Bingham, played by George Clooney, achieves a nearly unprecedented status: ten million frequent flyer miles. To celebrate, the chief pilot of the airline joins him mid-flight and they share a toast. The chief, played by The Big Lebowski’s Sam Elliott, offers Ryan simple congratulations, “We value your loyalty.” But do they? Do they even know how to value it?
If you spend a day shopping, you’ll repeatedly hear the question, “Are you a member of our loyalty program?” Loyalty programs are expanding, which is not surprising given that today’s highly competitive marketplace has made having one a no-brainer. Most, even the most ill-conceived, tend to produce small, single-digit gains which, at scale can add up to hundreds of millions of dollars. Of course, loyalty can mean different things to different people. To industry insiders, loyalty largely means how often consumers visit and how much they spend. But loyalty is also an emotional state, one that is earned (not bought), and based on real world experiences.