[2] Premiums are items that a retail customer can receive by redeeming proofs of purchase from a specific product or store.
[citation needed] In 1793, a U.S. merchant started giving out copper tokens which could be collected by the consumer and exchanged for items in the store.
[citation needed] But in 1909, Kelloggs changed the book give-away to a premium mail-in offer for the cost of a dime.
The early sponsor of Captain Midnight was Skelly Oil, and parents could get forms to mail-in for radio premiums at the gas stations.
Wills in 1888, were the first tobacco companies to print advertisements and, a couple of years later, lithograph pictures on the cards with an encyclopedic variety of topics from nature to war to sports — subjects that appealed to men who smoked.
The marketing strategy that he established has produced thousands of different cereal box prizes that have been distributed by the tens of billions.
Besides being the current owner of Cracker Jack, the U.S. popcorn confection brand known for the "Prize Inside",[20] Frito-Lay also regularly includes tazos and tattoos in packages of Lay's chips worldwide.
In parts of Latin America, Frito-Lay has even introduced a brand called Cheetos Sorpresa (English: Surprise), which includes a licensed prize (from movies, television, and video games) in every 29–gram bag.
[22] Mail order pioneer Aaron Montgomery Ward knew that by using the technique of selling product directly to the consumer at appealing prices could, if executed effectively and efficiently, revolutionize the market industry and therefore be used as an innovative model for marketing products and creating customer loyalty.
Wunderman — considered to be the father of contemporary direct marketing — is behind the creation of the toll-free 1-800 number[22] and numerous mail order based loyalty marketing programs including the Columbia Record Club, the magazine subscription card, and the American Express Customer Rewards program.
[24] On May 1, 1981 American Airlines launched the AAdvantage frequent flyer program,[25] which accumulated “reward miles” that a customer could later redeem for free travel.
[26] In 1996, Ahold Inc launched a frequent-shopper rewards program in 4 of its US based grocery chains, Finast Friendly Markets, Maple Heights, Ohio.
CLOs have been implemented by American Express[28] and Groupon[29] and CLO technology has been developed by companies such as Strands, Meniga,[30] Smart Engine,[31] Cartera Commerce,[32] Womply,[33] Cardlytics, Linkable Networks, Birdback, Clovr Media,[34] and Offermatic.
[35] In order to receive and use CLOs, consumers must willingly opt into a CLO program and provide their credit/debit card information.
[36] When consumers see relevant CLO-enabled advertisements and product offers while browsing online, using a mobile device, watching TV, reading a newspaper or magazine or listening to the radio they can click, text or scan a QR code to link the CLO-enabled ad directly to their credit/debit card.
[37] Many consumers in the US and Europe have become quite accustomed to the rewards and incentives they receive by being a "card carrying" member of an airline, hotel or car rental program.
In addition, research from Chris X. Moloney shows that nearly half of all credit card users in the US utilize a points-based rewards program.
[citation needed] In his book, Loyalty Rules!, Fred Reichheld details the value to customer referral on the growth and financial performance of dozens of leading US firms.
Similarly, Chris X. Moloney has presented new findings (Loyalty World London 2006) that showed a magnetic value to a company to promote and measure customer referrals and advocacy via research and marketing.
[39] These statistics demonstrate the importance and effectiveness of having positive relationships with consumers as well as offering programs and rewards that encourage loyalty.
Hallmark did this through devising a program that directly rewarded customers not only for buying merchandise and utilizing Hallmark.com, but gaining additional benefits through referring their friends.
[43] Customer loyalty is decreasing due to consumers being able to quickly access product reviews and find cheaper options.
Consistent delivery on expectations can make a brand's reputation one of quality and trust which are big factors in forming relationships with customers.