The Hoops Customers Jump Through For Loyalty

Blogger Dani Austin of Dallas, Texas, logged into her Southwest Airlines account a few days before the end of 2019.

Shortly after, she and her husband, Jordan Joseph Ramirez, flew to Las Vegas (and back home) in less than 72 hours.

The spontaneous trip was part of a last-ditch attempt to try to earn the Southwest Companion Pass, a benefit of the Southwest Rapid Rewards program that allows pass holders to bring one companion on flights for at least a full calendar year free of airline charges (not including taxes and fees).

But consumers jump through hoops for more than airline rewards.

My brother-in-law is a die-hard shopper at American Eagle Outfitters. He recently purchased a jacket and jeans from the clothing store for just $2.69.

He’s no extreme couponer, but he leveraged his loyalty arsenal: his store credit card, AEO Connected Rewards account and a coupon.

So what’s the secret? When consumers are devoted to a particular brand, they can cash in.

WHAT’S IN A REWARDS PROGRAM?

Rewards, or loyalty, programs favor repeat customers. That often takes the form of discounts, coupons or free products. Consumers generally create an account and earn points or perks after making purchases.

The more you spend or the more points you rack up, the greater your payoff.

While saving money may be the obvious benefit, status is also an important draw, whether it’s sitting at the front or standing in a special VIP line.

These structured programs often include experiential rewards, according to Emily Rugaber, head of marketing at Thanx, a digital engagement platform. At a restaurant, that may equate to skipping the wait or tasting a special menu item first.

“It feels good to be treated differently,” says Jonah Berger, a marketing professor at the Wharton School at the University of Pennsylvania and author of “Contagious: Why Things Catch On.”

WHAT’S IN IT FOR RETAILERS?

Retailers are banking on the fact that increased customer loyalty will aid in customer retention — and translate into more transactions. Holding onto existing customers… READ MORE