Rewards are becoming a currency, and the loyalty industry is headed toward an open economy – as revealed in a new white paper published by Swift Exchange and COLLOQUY, “An Open Economy: The Evolution of Loyalty in the United States.”
“Consumer demand and new technologies are driving an exploding mobile and payments market,” says Richard Postrel, CEO and founder of Swift Exchange. “In turn, this is fueling the evolution toward a far more open economy than ever seen before. The result will be a consumer–centric world in which consumers, merchants and reward providers all benefit.”
An analysis of the three of the largest reward verticals, travel, hospitality and financial services, revealed that the industry has evolved a long way since the days of “earn rewards here, burn rewards here.” Eighty-eight percent of eight top airlines and 91 percent of 11 top hotel programs allow use of their reward currencies in other programs in different industries. In financial services, 33 percent of 12 top programs enable their reward currencies to be used like cash directly with at least one merchant online.
“We define the ultimate open economy as a consumer-centric marketplace in which loyalty rewards currencies function as a flexible, fungible currency in commerce transactions,” adds Nancy Gordon, COO of Swift Exchange. “This means consumers are getting closer to using their rewards for what they want, where they want, and when they want.”
But the advantages go beyond the consumer. Reward providers benefit from increased engagement, improved customer satisfaction and reduced costs for set-up and delivery. Merchants see increased traffic and sales and suddenly have access to the $48 billion in perceived value of new rewards issued each year. (This is based on the total perceived value of points and miles issued in 2010 in the U.S. for consumer-oriented rewards according to the 2011 Forecast of U.S. Consumer Loyalty Program Points Value, the outcome of a collaboration between Swift Exchange and COLLOQUY.)
“This new era can be a tremendous evolution for everyone but we must all remember the basic fundamentals of a successful loyalty program.” points out Kelly Hlavinka, managing director of COLLOQUY. “Brand integrity is key, as is ‘encouraging the dream’ for the consumer.” Hlavinka goes on to say that controlling costs will continue to be critical.
The advent of new tools and technologies is allowing the loyalty industry to stay focused on and improve these basic fundamentals while continuing the evolution to a truly open economy. Postrel sees this evolution as mirroring what happened in the trading industry years ago, adding, “An open economy combined with Swift technologies let us all stop fighting for pieces of the pie and instead, expand the overall size of the pie.” In a follow-up article entitled “The Solution for Marketers to Thrive in an Open Loyalty Economy,” Postrel provides valuable lessons from his days as a trader that can be applied beneficially to the loyalty industry
A webinar discussing the research, findings and methods to take advantage of this new open economy will take place on November 8, 2012 at 1PM. Registration can be found at http://www.colloquy.com/webinar_register.asp. Click to access “An Open Economy: The Evolution of Loyalty in the United States” free of charge. Click to access “The Solution for Marketers to Thrive in an Open Loyalty Economy” free of charge.
About Swift Exchange: A pioneer in global commerce, Swift Exchange has developed a first-of-its kind, loyalty operating system utilizing its patent-protected technology to make point and miles from different reward programs as easy to spend as cash, online or in-stores. Reward providers better manage their costs while dramatically increasing collaboration with merchants, systematically. Merchants receive new traffic and tap into the $48billion in rewards currency issued each year in the U.S. alone. Founded by CEO Richard Postrel, Swift Exhange is owned and operated by Signature Systems LLC. For more information, visit www.swiftexchange.com or call (305) 865-7000.
About COLLOQUY: COLLOQUY comprises a collection of publishing, education and research resources devoted to the global loyalty-marketing industry. Owned by LoyaltyOne, COLLOQUY has served the loyalty-marketing industry since 1990, with over 40,000 global subscribers to its magazine and www.colloquy.com, the most comprehensive loyalty web site in the world. COLLOQUY’s research division develops research studies and white papers, including industry-specific reports, sizing studies and insights into the drivers of consumer behavior. COLLOQUY also provides educational services through workshops, webinars and speeches at events throughout the world and is a loyalty-marketing partner of both the Direct Marketing Association and the Canadian Marketing Association and a content provider to the American Marketing Association. COLLOQUY also operates the COLLOQUY Network, a global consortium of practitioners certified in COLLOQUY’s proprietary methodology. COLLOQUY magazine subscriptions are available at no cost to qualified persons at www.colloquy.com or by calling (513) 248-9184.
SOURCE: Swift Exchange
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