Then, towards the end of the year, it hit me. I fell just a few flights short of getting status on United. So what was the point of taking all those flights on United? Giving one brand my loyalty throughout the year ended like a reverse jackpot. It’s incredibly disappointing and de-motivating to come up empty on recognition for that level of investment.

This all-or-none loyalty framework certainly isn’t unique to United. Many loyalty programs demand you save up points for long periods before they give you any token of preference or thanks. Until then it’s a steady parade of confirmation and survey emails, the latter again asking for me to fill out a form in the hope of winning a ton of points.

So why are loyalty programs turning more people off than on?

Christmas Clubs are Dead

Thinking about how all of these loyalty programs work, I wondered when they started. Very unscientifically, it feels like they came into being during the 1980’s (or that was the first time I remember them). This was in the last decade that Christmas Clubs were popular. And Christmas Clubs depended on an American culture that values putting a little bit in every week to enjoy something big, like a vacation or a big Christmas at the end of a long wait.

But our culture doesn’t work like this anymore. My colleague John Kenny likes to quote a statistic where, as a nation, we like to gamble about 20 billion dollars more than we save each year. We don’t want to defer gratification. We want an immediate result. Micro-lending is on the rise, and layaway is making a big comeback. These are both very focused and shorter-term investment or redemption schemes.

Make the Park Instead

Surely, no loyalty manager wants to think that their program tiers are only encouraging brand use among people who are already in its core, and discouraging anyone who is in the beginning of their relationship with that brand.

To achieve this conversion, I think it’s useful to use the park or central town square metaphor Dennis Schleicher introduced me to a while back. You want people to come into your square and make it a frequent destination: for hanging out, for the people that you meet there, or just go to watch.

But think about what makes a public park that people love: all the little things: the playground, the fountains and benches, the landscaping, the location, the bands or movies you invite to play there. And the ultimate test of the public space, as Dennis rightly suggested: that you see the occasional couple kissing.

In an era where we see Tripit, Mint, and Kayak make real ripples through industries by giving users something visual and valuable with every deposit of people’s time and effort, loyalty programs have the opportunity to become popular parks again with feedback and recognition at every point in the relationship.

To make a place so comfortable that you could even facilitate private moments that matter. Like Twitter’s Direct Messages, or Facebook private messaging and groups. These are the information equivalent of a couple kissing as they walk through, or sitting on a bench off to the side.

If loyalty doesn’t move more towards the model of making a pleasing community space that rewards and recognizes with every step, the “young audience not adopting” today will be the long lost brand equity of tomorrow.

What do you think? Please add your perspective here in the comments or @mleis.

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To me, this may be what social media does best for a brand. Though it’s important not to forget email and your traditional direct channels, here are a few ideas I’ve been considering:

Closed Social Networks

Especially for destinations, hospitality, and service-based companies. Give people a reason to extend the experience and share ideas with groups larger than one other person, but smaller than your whole friend group. All those photos and good time you really want to keep talking about, without being indexed by google, spied by your potential employer, or your mom.

Semi-closed Relationships

Working with a beer brand, I’ve found that it can be a tough but interesting dynamic to enable certain people to join a private group on Facebook, while allowing them to broadcast types of activities back to their stream. So you’d have age or account validation and exclusivity, while allowing things like upgrades or recaps to go out to everyone and gain impressions.

Lower Barriers to Database Entry

One of the tough parts about getting involvement in CRM is the cumbersome form filling. By bringing APIs into the mix, brands can auto-fill the social network profile information, and speed the process. By the same token, you can now keep in touch with those people on the social network of their choice, and bring the activity that happens in those social networks back to your CRM home as social proof and introducing people who have your brand in common to each other.

If you’re looking for more strategic insight on Social and CRM loyalty integration, I’m happy to help.

What do you think? Curious on your take as this seems to be nascent but building. Leave a comment below or talk to me on Twitter @mleis

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