Loyalty program participation low: Colloquy report

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While membership in loyalty rewards programs has reached 1.3 billion, the average number of active participants in these programs is just 39.5 percent, according to a new report from loyalty marketing consultancy Colloquy.

The average U.S. household belongs to 12 loyalty programs, researchers found. Only 4.7 of those yield active participation, however.

While marketers may try to boost their loyalty program membership roles to look good, it is active participation that really counts, Colloquy said.

Cincinnati-based Colloquy's first Loyalty Census is based on an analysis of a several business sectors, including airlines, financial services, hotel, restaurant, gaming, grocery, retail fuel, specialty retail, drug and discount stores, department stores and the Internet.

The 2007 report is being released today.

The report also found that four business sectors - airline, financial services, grocery and specialty retail - account for 57 percent of total loyalty program membership.

Frequent-flyer membership and activity continue to experience moderate growth compared to other industries.

Financial services loyalty programs have experienced 164 percent growth since 2000, fueled by credit cards with rewards.

Grocery chains, which are fighting a perception of loyalty-program ubiquity and sameness, will adopt loyalty models that allow for richer customer segmentation funded largely by packaged goods manufacturers.

Hotel loyalty programs will enjoy modest growth as consumers purged from airline frequent-flyer roles migrate to hotel programs.

Gaming companies' healthy profits will allow them to incubate the best loyalty practices in the coming years, the report said.

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