Generally, customer behavior drives market trends, but during an economic depression, the customer keeps a check on their spending. Nevertheless, customers stop spending; they just become choosy. Customers choose the brands they love, follow or feel connected to. In such times, loyalty programs are a win-win strategy for customers and brands. Nearly 73% of US customers believe loyalty programs are part of their plan during tough times.
The past economic fluctuations have actionable insights into what helped brands offset the impact of the market. For example, more than 62% of businesses agree that loyalty programs helped them engage customers during the pandemic.
Let’s find out what enabled brands to continue growing despite economic depressions.
- The great depression of 1929
During the great depression, which erupted due to the stock market crash, a famous loyalty program called “Box Tops” was introduced by Betty Crocker. Redeemable box tops were put on every package, and once customers collected a certain number of box tops, they could use the same for discounts on the next purchase. The success of this program led to many brands starting their loyalty program.
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The recession of the 1980s
Before the internet revolution, American Airlines started the loyalty program during the worst economic downturn of the 1980s. Customers could join the loyalty program only when they shared their names and other details. Today, its’ simplified AAdvantage loyalty program gives members many ways to earn statuses, such as by flying, using an AAdvantage credit card, or spending on everyday activities with an AAdvantage partner.
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The economic crisis of 2007-09
The economic depression of 2007 was sudden and quick. To achieve stability and sustainability at the same time, Starbucks started its loyalty program in April 2008. The change in leadership extended this loyalty program to gather customer feedback making users a central part of their strategy. Starbucks has 27.4 million loyalty program members growing consistently, contributing to more than 50% of its in-store revenue.
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The COVID pandemic
The most unexpected and globally spread economic misery came during the 2020 pandemic. Still, Panera Bread’s loyalty program “MyPanera” got around 600,000 new members with its subscription-based model. The loyalty program was started in 2020 and continues to be the most successful strategy for Panera Bread.
