The loyalty program that rewards everyone except loyal customers.

The premise of a loyalty program is sound. Customers who return repeatedly are worth more than customers who appear once and vanish. Rewarding them makes sense as both a thank-you and an incentive. Simple math, sound logic.

What happened between the premise and the execution is one of the more complete bait-and-switches in modern marketing. The contemporary loyalty program is, in most cases, a data collection mechanism wearing a thank-you note as a costume. The points are real in the sense that they exist in a database. They're not real in the sense that they can be exchanged for anything you'd actually want without years of accumulation. The reward that requires 47,000 points for a free appetizer isn't a joke. It's a calibration. The math was done. The number was chosen because most people won't reach it. Or will reach it, find the redemption process inconvenient, and let the points expire. Which they do. On a schedule disclosed in the terms and conditions nobody reads.

Meanwhile, here's my own loyalty resume, offered as a case study. I've been an Apple user since 1987, when I bought one of the first Apple IIgs machines. I was an early adopter of Adobe Illustrator 88, the boxed version, back when software came in a box and the box, I'd note, opened properly. At one point my agency ran thirteen seats of the full Adobe suite, back when every product was individually licensed and the invoice was a genuine event. I've been through every Apple platform transition, every price increase, every port change that turned a drawer full of perfectly good cables into a drawer full of nostalgia. I still pay the Adobe subscription every month.

Neither company has ever reached out to acknowledge any of it. Not once. Not a word. I'm not sour about this. I keep buying their products because they've been worth it, and at their scale, my thirty-eight years of history is invisible to anyone who could act on it. But I do find it a little absurd when these same companies publish earnest thought leadership about customer experience and loyalty.

The loyalty program is how that belief gets operationalized. And the loyalty program, as we've established, can't tell the difference between me and someone who signed up three weeks ago for the welcome discount and hasn't purchased since.

We're both "members." The loyalty program became an acquisition tool that calls itself a retention tool, because retention sounds more valuable to the CFO. The welcome discount is the actual function. The data collection is the actual product. Loyalty, in the original sense, was something a company earned. The program uses the word to describe something a customer signs up for.

Here's why it matters now. For most of those thirty-eight years, the question of my loyalty was academic. Where else was I going to go? But for the first time, that answer isn't obvious. A generation of AI creative tools is moving faster than Adobe is. The loyalty they never bothered to cultivate is precisely the asset they'll wish they had when the switching costs finish collapsing. Which is happening, roughly, now.

— Gary Hopkins

Founder and principal of Method, a strategic marketing practice.