I have seen the few loyalty programs I am aware of trying to increase user participation. I wonder if this is because they are dropping off in effectiveness?

For example, the one grocery story loyalty card that I use recently redeveloped their program entirely, and partnered with a different set of gasoline stations. They also added a lot of other 'partners' that I can gain points by using. And, they started spamming my email with tons of messages - they didn't formerly have my email address, but it is now mandatory for the new loyalty program. I never use their partners, rarely use the connected gas station (I don't buy much gas) and I never open the emails. In fact, I do just what I have always done: shop at the store and show them the card at the checkout. I get all the same benefits as before - reduced prices on some items. That is what I want. I do not want to spend time on email or considering their partners, I just want groceries. Did they recreate this program because it was declining in effectiveness for them?

Example Two: I have two credit cards, one for in-budget things like gasoline and groceries, the other (at a different bank) for out of budget purchases like dining out or buying gifts. So, the in-budget one gets all of my regular expenses except for rent and utilities (which are on auto-pay). I cannot possibly use the card 'more' than I do. Yet they give me a cent or two for every dollar I spend. And I do not ever run a balance so they are not getting any interest from me. They are paying me to use their card. What are they hoping to achieve?

Do these programs keep getting more aggressive because they are working or because they are not working? The grocery one was irritating, especially the required email 'opt-in'.

  • I'm not really sure this is a User Experience problem here. Can you expand on the UX angle here? This may not be the correct site for such a question. – JonW Sep 19 '17 at 15:48
  • @JonW well, it is about my experience, and I am a user. There are similar questions for this tag on this site. Migrate it if it doesn't belong here I guess. It seems like "are these programs getting more effective or less" is pretty objective. – user67695 Sep 19 '17 at 23:09

Why does a drive to increase user participation, imply that effectiveness might be dropping off? If the programs were ineffective, management might cancel them altogether - and if they proved successful, maybe that becomes an impetus to further expand their offerings and grab a bigger customer base.

Grocery Store card with partner offers and email

This might well be the US chain Safeway, which iirc has tied up with Chevron to offer some Gas Rewards program. Firstly, note that you aren't really getting reduced prices with these cards, its just a ploy to force you into using them by otherwise grossly marking up prices. Note that other places like Walmart or Target will have similar pricing without needing a 'loyalty' card.

What do these program changes you described mean for the store chain?

  • Many US states have privacy laws restricting the selling of user data. However, established business relationships can use loopholes in these rules. So, declaring 'offer partners' allows the chain to monetize user data legally.
  • Email has far less costs to run a mass marketing campaign. So they can promote themselves and also get paid for promoting 'partners'
  • Signing up with a gas station chain gives them prominent signage at their stations, and is also good for the chain as a cross promotion opportunity.

You might not use much gas, but remember these are one-size-fits-all programs that want to cast a wide net where possible. So being an outlier on a statistic doesn't mean you get exempted from their marketing spam :(

Credit Card rebate programs

These similarly want to entice you into always having that card in your wallet, and using it as your primary CC. They might actually lose money on a tiny minority of fiscally conservative shoppers who only use it for the biggest discounts, and switch cards based on retailers. But its more than made up by those who use it for other purchases with less reward rates as well.

Note: I think these questions are more suited to Money.SE as they're not really suited to UX.

  • Ok, well, there is a Marketing tag with 70 questions, so I thought I would ask. – user67695 Sep 19 '17 at 11:15

In response to your 2nd example: They are hoping to achieve a loyal user by ways of using the 'Reciprocity Principle'. It is a technique used by people and marketers that is based on human behavior. Essentially, they will give you something for free, and in turn, you will (psychologically) feel obligated to give something back to them (your money, trust, etc.).

Read this for more info: http://www.senseimarketing.com/the-principle-of-reciprocity-and-influence-marketing/

  • I think of the credit card like cash. I never feel an urge "give back" to the Treasury for creating money as a medium of exchange. Similarly, I don't think about helping the water system or the electric company, improving the roads, assisting the police... those are their jobs, they are already getting paid to do those things. I do my job, they never rush in to help me. So, negative score on reciprocity there. – user67695 Sep 18 '17 at 17:30