Most “loyalty/rewards” programs are bribes to increase the frequency of purchase or visitation. An example of this is points, discounts or bonus offers to all members. This type of offer rewards consumers for more frequent purchases, not for necessarily being loyal. This is a re-skin of a “coupon program” as a “loyalty program”. Buying frequency over the long term can be an expensive proposition.

There has been a lot of research into loyalty and most agree that only 10% of consumers will be completely loyal and those that are, are mostly light users – they represent the 80% that’s delivering 20% of your business.

It makes much more sense to devote your dollars and your energy to the 20% of consumers that contribute 80% of your business.

The notion of creating consumer loyalty, is more about 'experience' and 'relationships', and less about frequency. Loyalty is not always about points; its about relevance and connection.

Put simply, frequency programs are about inclusion, and loyalty programs are about exclusion.

But make no mistake, frequency programs and the consumer relationship are - or ought to be - joined at the hip.

The key is to mine your consumer database, which can contain purchase histories, lifestyle and household characteristics and begin to manage online consumer relationships on a tiered basis. Find your highest value consumer and create a relationship with them. That’s loyalty building. From an ROI perspective, your program should be a cost effective way to maintain your brand’s relationship with your best consumers. Delivering awareness, engagement, new product information, research, testing, and, at times, rewards.

The fickle and bottom tiers of consumers should receive less, or no, investment. Some might even have to be discarded if the company is to concentrate its resources on retaining profitable consumers.

Dr. Martha Rogers, noted loyalty consultant and co-author of the ground-breaking book 'The One-to-One Future: Building Relationships One Customer At A Time', has stated that the real goal of frequency marketing programs is not to create higher loyalty levels but to obtain and contribute customer data that can be used for programs and processes that lead to higher loyalty. Brian Woolf of the Retail Strategy Center concurs. He has said: "The growth in loyalty marketing is slowing. The emphasis is changing from launching and mastering a program to effectively using the information."

Breakfast Central is one of OSL’s most successful loyalty programs.