Nearly Four Billion Customers in Loyalty Programs

July 5, 2017         By: Steven Anderson

The loyalty program is easily one of the greatest marketing moves around, and has joined up with the mobile payments concept like a hand in a glove. Whether it’s a game-style event like McDonald’s Monopoly game or just a straight quid-pro-quo like at Starbucks, whether integrated in an app or not, it’s become almost table stakes to offer a loyalty program. Word from the 2017 COLLOQUY Loyalty Census study shows how big this field is getting, with 3.8 billion total memberships in loyalty programs recorded so far in the United States alone.

Given that there are only around 326 million people and change in the US right now, that’s quite a feat. It means, in fact, that the average person is currently enrolled in around 13 separate loyalty programs. Despite this staggering figure, loyalty program growth is actually on the decline. In 2015, there were 3.3 billion memberships, and it was on the plus side of a 26 percent growth rate. The gains since then, meanwhile, have slowed, reaching just a 15 percent rate.

Study author and LoyaltyOne Global Solutions partner Melissa Fruend noted “The membership growth slowdown signals the U.S. loyalty market is maturing, and retailers need to up their game on how to attract and retain members within their loyalty programs. In order to improve loyalty marketing, brands must optimize the overall experience by creating more personalized and relevant experiences for their best customers.”

It’s worthwhile to say that it’s just growth saturation; no market can grow forever, as eventually everyone has everything they want and new growth is fairly minimal. That happens in a mature market routinely. By like token, what Melissa Fruend pointed out applies; in a mature market, companies have to innovate to create new classes of products to get interest sparked back up.

When the average American is enrolled in 13 different loyalty programs, it’s clear that the loyalty program has saturated the market. The growth of mobile-based loyalty programs and loyalty programs tied into apps has likely been a huge help here, and will continue to be for some time. But the programs are full up right now, which means greater innovation is required to get any significant growth or attention here.